Question 1

In material alteration

Accepted Answer

A) the parties are directly concerned with the discharge of an existing contract. 
B) the parties are basically preoccupied with the new arrangement,and the discharge of the old contract is incidental. 
C) a replacement of one of the parties discharges the original contract and substitutes a new one. 
D) there is an agreement not to proceed with performance of a contract already in existence. 
E) none of the above 
A) the parties are directly concerned with the discharge of an existing contract. 
B) the parties are basically preoccupied with the new arrangement,and the discharge of the old contract is incidental. 
C) a replacement of one of the parties discharges the original contract and substitutes a new one. 
D) there is an agreement not to proceed with performance of a contract already in existence. 
E) none of the above

Question 2

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.

Accepted Answer

The contract is impossible to

Question 3

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?

Accepted Answer

Although the contrac

Question 4

Accord and satisfaction is an agreement not to proceed with the performance of a contract already in existence.

Accepted Answer

A) True 
 B)False

Question 5

Where an event makes performance of a contract more difficult or may mean that it may take a little longer,the event is still a frustrating event.

Accepted Answer

A) True 
 B)False

Question 6

A party to a contract might forego the defence of frustration by

Accepted Answer

A) making it a condition precedent. 
B) being in a province that has its own Frustrated Contracts Act. 
C) placing an exemption clause on everything. 
D) making it a condition subsequent. 
E) an express promise worded in such an absolute and unconditional way as to rule out any reservation for the party's benefit. 
A) making it a condition precedent. 
B) being in a province that has its own Frustrated Contracts Act. 
C) placing an exemption clause on everything. 
D) making it a condition subsequent. 
E) an express promise worded in such an absolute and unconditional way as to rule out any reservation for the party's benefit.

Question 7

Four partners own the used car dealership Square Deal Ltd.The company needed more working capital,so the partners went to the bank officer for a loan.The bank officer stipulated that she would approve the loan application if each of the owners signed a personal guarantee on the loan.This was agreed to by the four,but when it came time for signing,one of the partners was on an extended trip to Asia and couldn't be reached.The other three signed the document.Based on the three guarantees,the bank decided to go ahead with the loan to Square Deal Ltd.Are the guarantees enforceable against the three partners?

Accepted Answer

A) Yes,they are,since the bank extended the loan without objection from the partners. 
B) No,they are not,because the partner in Asia had the "deep pockets." 
C) Yes,they are,since there was good consideration given. 
D) No,they are not,since the condition precedent was never met. 
E) No,they are not,because there was a definite lack of consideration. 
A) Yes,they are,since the bank extended the loan without objection from the partners. 
B) No,they are not,because the partner in Asia had the "deep pockets." 
C) Yes,they are,since there was good consideration given. 
D) No,they are not,since the condition precedent was never met. 
E) No,they are not,because there was a definite lack of consideration.

Question 8

Because frustration is only available for unanticipated or unforeseen events,and because the rules are arbitrary,what can contracting parties do to better manage the legal risks?

Accepted Answer

It is important prior to finalizing the

Question 9

Bulldog Logging Co.agreed to clear 40 hectares of land for Palmer Construction Corp.,who had paid in advance for this service.Later,Palmer realized that they only needed 35 hectares cleared and released Bulldog Logging from the contract after they had cleared just 35 hectares.What should take place in order for the original contract to be legally discharged?

Accepted Answer

A) Pay back an appropriate amount of the advanced payment thereby establishing the gratuitous promise. 
B) Do nothing,but be prepared to clear the five remaining hectares if requested. 
C) The parties should place this waiver in writing and under seal. 
D) The remaining five hectares will have to be cleared,otherwise a new contract will need to be negotiated. 
E) Offer a tender of performance to Palmer Construction. 
A) Pay back an appropriate amount of the advanced payment thereby establishing the gratuitous promise. 
B) Do nothing,but be prepared to clear the five remaining hectares if requested. 
C) The parties should place this waiver in writing and under seal. 
D) The remaining five hectares will have to be cleared,otherwise a new contract will need to be negotiated. 
E) Offer a tender of performance to Palmer Construction.

Question 10

Each province in Canada has a Limitations Act.Which of the following statements correctly describes what happens to a contract after the time set forth in the Act has expired?

Accepted Answer

A) The contract is discharged by the courts. 
B) The defendant cannot raise equitable defences to a breach of contract action. 
C) The contract can no longer be enforced unless the plaintiff agrees to forfeit his or her rights. 
D) Contractual obligations become "statute barred." 
E) The party to the contract who is entitled to collect money will be required to ask for a ruling by the court. 
A) The contract is discharged by the courts. 
B) The defendant cannot raise equitable defences to a breach of contract action. 
C) The contract can no longer be enforced unless the plaintiff agrees to forfeit his or her rights. 
D) Contractual obligations become "statute barred." 
E) The party to the contract who is entitled to collect money will be required to ask for a ruling by the court.

Question 11

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?

Accepted Answer

a.The contract would be discharged becau

Question 12

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?

Accepted Answer

A) The parol evidence rule will not allow the oral stipulation to be enforced by the courts. 
B) The oral part is a condition precedent and therefore renders the contract void. 
C) The oral part is a condition subsequent and is effective for three years. 
D) The oral part is a condition precedent and therefore enforceable. 
E) The contract is in effect regardless of the oral stipulation. 
A) The parol evidence rule will not allow the oral stipulation to be enforced by the courts. 
B) The oral part is a condition precedent and therefore renders the contract void. 
C) The oral part is a condition subsequent and is effective for three years. 
D) The oral part is a condition precedent and therefore enforceable. 
E) The contract is in effect regardless of the oral stipulation.

Question 13

A novation agreement respecting a party or parties is only effective if

Accepted Answer

A) the new party introduced by novation consents in writing. 
B) the creditor serves notice in writing on the debtor. 
C) the parties to the original contract and the new party introduced by novation all give their consent. 
D) all parties to the agreement have already performed their obligations under the agreement. 
E) the replacement contract contains a clear condition precedent. 
A) the new party introduced by novation consents in writing. 
B) the creditor serves notice in writing on the debtor. 
C) the parties to the original contract and the new party introduced by novation all give their consent. 
D) all parties to the agreement have already performed their obligations under the agreement. 
E) the replacement contract contains a clear condition precedent.

Question 14

A contract might be discharged by the doctrine of frustration if

Accepted Answer

A) the frustrating event is contemplated by the contract. 
B) the contract becomes purposeless after it was entered into. 
C) the contract is expressly absolute. 
D) the frustrating event is self-induced. 
E) the contract was impossible to perform at the time it was entered into. 
A) the frustrating event is contemplated by the contract. 
B) the contract becomes purposeless after it was entered into. 
C) the contract is expressly absolute. 
D) the frustrating event is self-induced. 
E) the contract was impossible to perform at the time it was entered into.

Question 15

Interlake Shipping Co.transports grain in large barges across Lake Michigan.In March,one of its barges was caught in an ice flow,where it "jammed," with the resultant destruction of its cargo.The carrier's property insurance refused to pay because the hazard was not covered under the policy.And the owner of the cargo had no insurance.Does this occurrence fall under the doctrine of frustration for the carrier?

Accepted Answer

A) Yes,it does,since it was an act of God. 
B) Yes,it does,because it involved the perishing of the goods. 
C) No,it doesn't,because the event was preventable. 
D) Yes,it does,because Interlake had no insurance to cover its property. 
E) No,it doesn't,since the event was due to carelessness. 
A) Yes,it does,since it was an act of God. 
B) Yes,it does,because it involved the perishing of the goods. 
C) No,it doesn't,because the event was preventable. 
D) Yes,it does,because Interlake had no insurance to cover its property. 
E) No,it doesn't,since the event was due to carelessness.

Question 16

Give an example of self-induced frustration.What is the legal result?

Accepted Answer

The text gives the example of

Question 17

Since any possible frustrating event can be made a term of the contract,why do we need the doctrine of frustration?

Accepted Answer

To have any frustrating event be part of

Question 18

While travelling in the U.S.A.,Joey bought some items at Payless Drug Store.The store refused to take in payment either Joey's Canadian currency or his personal cheque-saying they wanted U.S.cash or a major bankcard.Here we have a contractual issue of

Accepted Answer

A) payment using credit. 
B) tender of performance. 
C) discrimination against Canadians. 
D) exchange rates and value of currency. 
E) discharge by performance. 
A) payment using credit. 
B) tender of performance. 
C) discrimination against Canadians. 
D) exchange rates and value of currency. 
E) discharge by performance.

Question 19

A and B agree in writing that A will sell to B $5000 in widgets by September 1.On August 28th,B tenders payment of the $5000.00 on A,who refuses to accept it and later refuses to deliver the widgets to B because their value went up after the contract was entered into.In this case,if A sues B for breach of contract and B successfully counterclaims for specific performance

Accepted Answer

A) A is in breach of contract and B will only have to pay the $5000.00,but no interest or costs. 
B) by not continuously trying to ensure that A accepts the $5000.00,B is in breach of contract. 
C) A is in breach of contract and B is not bound to do anything more. 
D) the contract is at an end. 
E) none of the above 
A) A is in breach of contract and B will only have to pay the $5000.00,but no interest or costs. 
B) by not continuously trying to ensure that A accepts the $5000.00,B is in breach of contract. 
C) A is in breach of contract and B is not bound to do anything more. 
D) the contract is at an end. 
E) none of the above

Question 20

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?

Accepted Answer

A) Yes,they would agree,since it is no longer a profitable business. 
B) Yes,they would agree,since the license fee is a cost of doing business that was not contemplated by Jerry. 
C) Yes,they would agree,because the town intended the by-law to restrict door-to-door selling. 
D) No,they would not agree,because this is "self-induced" frustration. 
E) No,they would not agree,because the by-law was beyond Jerry's control. 
A) Yes,they would agree,since it is no longer a profitable business. 
B) Yes,they would agree,since the license fee is a cost of doing business that was not contemplated by Jerry. 
C) Yes,they would agree,because the town intended the by-law to restrict door-to-door selling. 
D) No,they would not agree,because this is "self-induced" frustration. 
E) No,they would not agree,because the by-law was beyond Jerry's control.

Exam 12: The Discharge of Contracts

In material alteration

Accord and satisfaction is an agreement not to proceed with the performance of a contract already in existence.

Where an event makes performance of a contract more difficult or may mean that it may take a little longer,the event is still a frustrating event.

A party to a contract might forego the defence of frustration by

Because frustration is only available for unanticipated or unforeseen events,and because the rules are arbitrary,what can contracting parties do to better manage the legal risks?

Each province in Canada has a Limitations Act.Which of the following statements correctly describes what happens to a contract after the time set forth in the Act has expired?

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?

A novation agreement respecting a party or parties is only effective if

A contract might be discharged by the doctrine of frustration if

Give an example of self-induced frustration.What is the legal result?

Since any possible frustrating event can be made a term of the contract,why do we need the doctrine of frustration?

While travelling in the U.S.A.,Joey bought some items at Payless Drug Store.The store refused to take in payment either Joey's Canadian currency or his personal cheque-saying they wanted U.S.cash or a major bankcard.Here we have a contractual issue of

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?

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

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