Exam 19: Discharge of Contracts

Contracts may be discharged by the joint action of both contracting parties or,in some cases,by the action of one party alone.

Sales of goods transactions are subject to a statute of limitations period of:

The federal Consumer Credit Protection Act gives the debtor the right to rescind a credit transaction within three (3)business days when the transaction would impose a lien on the debtor's home.

When performance is impeded due to the occurrence of an event whose nonoccurrence was a basic assumption of the contract,the contract may be discharged on the grounds of:

The time for performance is typically essential in a contract for the sale of perishable property.

A house-painting contract is discharged if continual rain makes it impossible to complete the painting by the time specified in the contract.

Kentucky Lumber and Millwork Company contracted to supply Rommell Company millwork for use in the construction of a school building.While the work was in progress,the Kentucky Lumber mill was destroyed by fire.For two months thereafter,Kentucky Lumber and Millwork supplied Rommell with millwork purchased from a third party.Kentucky Lumber and Millwork did not wish to continue this plan and declared that the contract was ended.Rommell brought an action against Kentucky Lumber and Millwork to enforce the contract.How will the court decide?

Ordinarily,a temporary impossibility __________ the duty to perform.

An art collector commissioned an artist to create a sculpture for the collector.The artist wanted a substantial amount of money for the sculpture.This caused the collector some worry regarding possible dissatisfaction with the artwork once it was completed.To ensure that payment would be made only if the collector was satisfied with the sculpture,a condition was written into the commission contract.It required that the collector would have to be satisfied with the artwork,relying on the collector's taste and judgment,before an obligation of payment would be created. The artist never imagined that a collector could possibly refuse a creation of his and allowed the condition to be placed within the contract.At the completion of the sculpture,the collector claimed that she did not care for the artwork and therefore refused to pay.Can the artist force payment in this situation? Would it help if the artist could establish that the collector actually approves of the sculpture but has temporarily run short on funds,and that this is the true motivating factor in refusing to accept the sculpture?

If a debtor with multiple debts specifies the debt to which a payment is to be applied and the creditor accepts the money,the creditor is bound to apply the money as specified.

All courts hold that when an agreement requires satisfaction of the other party regarding the acceptance of an act,a reasonable person standard is used.

Unless a contract so provides,time is ordinarily not of the essence,and performance within a reasonable time is sufficient.

A contract to build a house is deemed performed when:

A condition precedent must occur before a party to a contract has an obligation to perform.

By operation of law,a party can be discharged in bankruptcy from debts.

A party who in good faith has provided substandard performance of a contract may sue to recover the payment specified in the contract.

In most bilateral contracts,the performances of the parties are concurrent conditions.