Exam 12: The Discharge of Contracts

The doctrine of frustration,

On October 1,Mary Miller,a world-renowned entertainer,entered into a contract with Quality Production Ltd.to perform a concert in Sudbury,Ontario,on December 15.On October 15,Quality signed a contract to rent the Centennial Hall from its owners,Business Buildings Ltd. ,for the evening of December 15.Business Bldg.was advised of the purpose for which Quality was renting the hall,and Quality paid Business Bldg.a deposit of $5000.Quality had tickets printed,advertised the concert,hired a band,and paid Mary Miller a $7500 advance.Expenses by December 10 totalled $12 500 excluding the advance to Mary Miller. a.If on December 10,the Centennial Hall burned to the ground through no fault of Business Bldg. ,would Quality be able to sue Business Bldg.for its losses,and if so,what would Quality likely recover? Explain any legal principles and defences the parties may rely upon. b.If on December 10,the above (a)did not happen but Mary Miller died,could Quality successfully sue Mary Miller's estate for damages,and if so,what would Quality likely recover? What legal principles and defences would be available to the parties?

Explain why a waiver might not be enforceable.

A and B agree in writing that A will renovate B's house for $20 000.00.A renovates the house and B pays the money.In this situation,

A debtor who makes an unsuccessful but reasonable attempt to pay will be free from further liability on interest owing on the amount.

Jack agrees to paint John's home for $500.00.Wishing to re-negotiate the deal,Jack,the night before the job,throws away his paint brushes and other equipment.The next day he tells John that thieves have stolen his equipment and so the contract will have to be cancelled.Jack's conduct is not a breach of the contract because the contract is frustrated.

A sells goods to B for $5000.00 and B gives A a deposit of $1000.00.Both A and B agree that the risk remains with the seller,A,until the shipping documents are delivered to the purchaser,B.A ships two of the goods to B and then the rest of the goods are destroyed while in A's possession at no fault of A.In this case,at common law,what would happen to B's deposit?

Where the required elements for frustration in the Sale of Goods Act are present,the Frustrated Contracts Act will not apply.

At common law,in order for a contract to be discharged by frustration,

A frustrating event is one that was not foreseeable by the parties.

Park-Lot Maintenance Corp.entered into a three-year contract with Beliis Fair Mall for snow removal.The contract was in writing,but it was agreed orally that the snow would need to be at least 10 centimetres deep before the contract was operative.Which is the applicable legal concept?

Bankruptcy does not discharge a bankrupt from all contractual obligations.

John and Sally enter into a contract for the lease of a used automobile.The term of the contract states that John can terminate the lease agreement if Sally fails to make a required lease payment within 10 days of the due date.Sally fails to make the required payment and on the eleventh day declares the contract cancelled.Will Sally be successful? Explain your answer.

Which of the following provides the best example of discharge by accord and satisfaction?

Jekyll agrees to sell Hyde a certain super-strength hair remover capsule.While it is still in Jekyll's laboratory,the only capsule is swallowed by a night-time guard dog.What will happen in this case?

A contract might be discharged by the doctrine of frustration if

Jack sells Payless Habitat 750 hats.These are yet to be produced from a new factory in Centreville,Ontario.Delivery day on the contract is in six months' time.After the contract is entered into,the town of Centreville refused a conditional land permit necessary for the building of the factory.As it turns out,Jack will have to find another piece of land for his factory.Is Jack bound by his contract to supply hats? Give reasons for your answer.

A agrees in writing to buy B's property for $20 000.00.The agreement states that A shall have five days from the date of the agreement to find mortgage financing.A is unable to find mortgage financing in five days and notifies B.In this case,

Jerry,a college business major,contracts with the Southwestern Co.to sell books door-to-door in Portsville,Ontario.Upon learning that a local by-law requires a $25 per day licence,Jerry declares the contract frustrated and goes home.Would the courts agree with Jerry's contention?

An agreement by parties to a contract not to proceed with performance is not supported by consideration.