Question 1

The Doctrine of Frustration

Accepted Answer

A)  can be applied in cases where the subject matter did not exist at the time of the agreement. 
B)  only applies where there is a Frustrated Contracts Act. 
C)  is a practical and reasonable solution to be imposed by a court under extreme circumstances that were not contemplated by the contracting parties. 
D)  If not applied, discharges the plaintiff from her contractual obligations. 
E)  could be applied successfully as a defense in a case where honoring contractual obligations would bring hardship upon the promisor. 
A)  can be applied in cases where the subject matter did not exist at the time of the agreement. 
B)  only applies where there is a Frustrated Contracts Act. 
C)  is a practical and reasonable solution to be imposed by a court under extreme circumstances that were not contemplated by the contracting parties. 
D)  If not applied, discharges the plaintiff from her contractual obligations. 
E)  could be applied successfully as a defense in a case where honoring contractual obligations would bring hardship upon the promisor.

Question 2

To discharge a contract means to

Accepted Answer

A)  place it into remission. 
B)  remove it from consideration. 
C)  make it null and inoperative. 
D)  execute it immediately. 
E)  reject its legal obligation. 
A)  place it into remission. 
B)  remove it from consideration. 
C)  make it null and inoperative. 
D)  execute it immediately. 
E)  reject its legal obligation.

Question 3

Where a creditor refuses to accept legal tender as payment any subsequent action to recover the money will be at the expense of the debtor.

Accepted Answer

A) True 
 B)False

Question 4

Contracts can be discharged by agreement. Name and describe three examples of contracts discharge by agreement.

Accepted Answer

Examples of discharge of a contract by a

Question 5

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?

Accepted Answer

A)  No, since there is an obvious conflict of interest. 
B)  No, since quantum merit should apply in this situation. 
C)  Yes, since this is the way things are done in the trade. 
D)  Yes, because both parties agreed to this arrangement in the contract. 
E)  No, but any dispute can be settled based on fairness and equity. 
A)  No, since there is an obvious conflict of interest. 
B)  No, since quantum merit should apply in this situation. 
C)  Yes, since this is the way things are done in the trade. 
D)  Yes, because both parties agreed to this arrangement in the contract. 
E)  No, but any dispute can be settled based on fairness and equity.

Question 6

A frustrating event is one that cannot bring contractual obligations to an end.

Accepted Answer

A) True 
 B)False

Question 7

A unilateral contract is discharged by performance when

Accepted Answer

A)  a term of the contract specifies an event which must occur before the contract will proceed and that event does not occur. 
B)  an act of God occurs after the contract is entered into. 
C)  both parties perform all their obligations under the contract. 
D)  both parties attempt tender of performance. 
E)  performance is genuinely attempted by both parties even if one party's performance is incomplete. 
A)  a term of the contract specifies an event which must occur before the contract will proceed and that event does not occur. 
B)  an act of God occurs after the contract is entered into. 
C)  both parties perform all their obligations under the contract. 
D)  both parties attempt tender of performance. 
E)  performance is genuinely attempted by both parties even if one party's performance is incomplete.

Question 8

Julie was told by ComputerLand that if she would purchase ten or more Zip cartridges, she would receive a free cartridge carrying case in the mail. However, shortly thereafter, the supplier of such carrying cases went out of business and could no longer fill orders. Then Julie sued ComputerLand, who used "frustration" in its defense. Which of the following is true?

Accepted Answer

A)  Since Julie did not specify the source, the agreement is not frustrated. 
B)  Iomega, the manufacture of Zip drives and cartridges, would be liable. 
C)  Frustration is impossible because it is too late for rescission. 
D)  Since the source is destroyed, the agreement is frustrated. 
E)  Since the carrying case is free, this agreement lacks consideration. 
A)  Since Julie did not specify the source, the agreement is not frustrated. 
B)  Iomega, the manufacture of Zip drives and cartridges, would be liable. 
C)  Frustration is impossible because it is too late for rescission. 
D)  Since the source is destroyed, the agreement is frustrated. 
E)  Since the carrying case is free, this agreement lacks consideration.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A and B enter into a contract whereby A agrees to supply B with 10,000 tins of tuna at the rate of 1000 tins per month from his tuna factory in Bayport, Nova Scotia, and B agrees to pay A $2 per tin. A supplies 1000 tins of tuna and before he can collect, his factory is destroyed by fire. If the contract is discharged by frustration, which of the following statements is correct?

Accepted Answer

A)  All obligations under the contract are discharged, A and B's obligations are both discharged, and B does not have to pay A the sum of $2,000. 
B)  B will not have to pay A the sum of $2,000 because there is no longer a contract. 
C)  Only future obligations are discharged and B must pay A the sum of $2,000. 
D)  A must obtain the tuna from another source to satisfy the contract. 
E)  B will have to pay A the sum of $2,000 because there was no deposit. 
A)  All obligations under the contract are discharged, A and B's obligations are both discharged, and B does not have to pay A the sum of $2,000. 
B)  B will not have to pay A the sum of $2,000 because there is no longer a contract. 
C)  Only future obligations are discharged and B must pay A the sum of $2,000. 
D)  A must obtain the tuna from another source to satisfy the contract. 
E)  B will have to pay A the sum of $2,000 because there was no deposit.

Question 12

A novation agreement is only effective if

Accepted Answer

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

Question 13

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 3 inches deep before the contract was operative. Which is the applicable legal concept?

Accepted Answer

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

Question 14

While traveling in the U.S., 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)  exchange rates and value of currency. 
B)  discrimination against Canadians. 
C)  tender of performance. 
D)  payment using credit. 
E)  discharge by performance. 
A)  exchange rates and value of currency. 
B)  discrimination against Canadians. 
C)  tender of performance. 
D)  payment using credit. 
E)  discharge by performance.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The Frustrated Contracts Act determines:

Accepted Answer

A)  how expenses incurred prior to frustration should be allocated 
B)  who is liable if there is frustration of contract 
C)  when risk passes under a contract 
D)  how to calculate damages in the event of frustration 
E)  all of the above 
A)  how expenses incurred prior to frustration should be allocated 
B)  who is liable if there is frustration of contract 
C)  when risk passes under a contract 
D)  how to calculate damages in the event of frustration 
E)  all of the above

Question 17

Albert receives a bill from Revenue Canada for $68 in late payment charges on his tax installments. He decides to pay Revenue Canada in dimes so he delivered them a bag full of dimes. Has he discharged his obligation to Revenue Canada? Explain.

Accepted Answer

The obligation to Revenue Cana

Question 18

Jack gives a mortgage over his home to the Bank of Montreal. The mortgage contract is signed on June 3, 2003. After it is signed, Jack, upon reviewing the terms notices that there is a provision that states that he is to procure fire insurance coverage for the home. This kind of provision is known as a condition precedent.

Accepted Answer

A) True 
 B)False

Question 19

For frustration of contract to occur, there must be:

Accepted Answer

A)  a natural disaster 
B)  an event after the contract was entered into 
C)  an event that makes performance more onerous 
D)  an Act of God 
E)  an event before the contract was entered into 
A)  a natural disaster 
B)  an event after the contract was entered into 
C)  an event that makes performance more onerous 
D)  an Act of God 
E)  an event before the contract was entered into

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 13: The Discharge of Contracts

The Doctrine of Frustration

To discharge a contract means to

Where a creditor refuses to accept legal tender as payment any subsequent action to recover the money will be at the expense of the debtor.

Contracts can be discharged by agreement. Name and describe three examples of contracts discharge by agreement.

A frustrating event is one that cannot bring contractual obligations to an end.

A unilateral contract is discharged by performance when

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

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

A novation agreement is only effective if

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 3 inches deep before the contract was operative. Which is the applicable legal concept?

While traveling in the U.S., 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

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

The Frustrated Contracts Act determines:

Albert receives a bill from Revenue Canada for $68 in late payment charges on his tax installments. He decides to pay Revenue Canada in dimes so he delivered them a bag full of dimes. Has he discharged his obligation to Revenue Canada? Explain.

For frustration of contract to occur, there must be:

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

Law and Society

The Machinery of Justice

The Law of Torts

Professional Liability

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration, and Intention to Create Legal Relations

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

Grounds Upon Which a Contract May Be Impeached: Mistake

Grounds Upon Which a Contract May Be Impeached: Misrepresentation, Undue Influence, and Duress

The Requirement of Writing

The Interpretation of Contracts

Privity of Contract and the Assignment of Contractual Rights

The Effect of Breach

Remedies for Breach

Sale of Goods

Leasing and Bailment

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

The Internal Affairs of Corporations

The External Responsibilities of a Corporation

Secured Transactions

Creditors Rights

Government Regulation of Business

International Business Transactions

Electronic Commerce

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