Exam 12: The Discharge of Contracts

Clyde entered into a contract with Lucy Produce to supply eight tons of tomatoes.A flood destroyed the field where Clyde was growing his tomatoes,so he refused to supply the tomatoes.What legal grounds could Clyde advance for not supplying the tomatoes? What is Lucy Produce's best defence? What is the likely outcome of an action commenced by Lucy Produce for breach of contract?

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

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

Performance for the purpose of discharge by performance can take any number of different forms,depending on the contract.

For a contract to be fully discharged,one party must complete performance.

A truck slides off a mountain road in a snow storm.The contents,Nike shoes,are spread all over a ravine far below.Explain how the seller of the goods,who retained title,might use frustration in his defence.

A clause entitling an employer to dismiss an employee by giving notice of termination is an agreement to discharge a contract often referred to as an option to terminate.

A contract that is discharged by performance is one in which the respective legal obligations of the parties have been fulfilled.

Munson Fixtures Inc.has contracted with Weibe Installations to provide faucets for a major building project.The contract specifies that 400 Munson 6LS faucets shall be delivered on June 8.Similar faucets are made by other manufacturers.Which of the following is the only situation where the contract might be discharged by frustration?

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.

Julie was told by ComputerLand that if she were to purchase 10 or more USB keys,she would receive a free USB hub in the mail.However,shortly thereafter,the supplier of such hubs went out of business and could no longer fill orders.Then Julie sued ComputerLand,who used "frustration" in its defence.Which of the following is TRUE?

L contracted with M for the supply and installation of building materials and the renovation of M's property.L made certain payments,but refused to pay the balance because of defects in the workmanship.Evidence indicated that M had substantially completed the contract.In this case

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

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

A company that installs heavy equipment is to be paid upon the completion of each stage in the tooling of a new factory.Yet it is the factory owner's own chief engineer who does the inspection and makes the approval of each stage.Will the courts enforce this arrangement as a condition precedent?

A agrees to build a machine for B by September 1 for $3000.00.On August 15,both A and B agree not to proceed with the contract.In this situation

A agrees in writing to sell to B two printing presses by September 1 for $5000.00.B gives a deposit of $1000.00.Due to a tornado,A's production facility is destroyed on August 25,so A cannot deliver the printing presses to B.In a lawsuit by B for the return of the deposit,the court will say at common law

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

Leaving aside frustration or the operation of law as a means of discharging a contract,what is it that the other forms of discharge have in common with each other and what does this really mean?

S contracted to build a machine for F for a price of $8800.00.F paid $1000.00 on account.When the machine was nearly completed,S refused to do more unless F paid another $3000.00.F sued to recover the $1000.00 and for other compensation,and S counterclaimed for the contract price.Expert evidence indicated that the machine was not substantially completed at the time of F's refusal to do more.In this situation at common law