Question 1

Quinn contracts to provide ten tons of scrap steel at $500 per ton to Rendered Materials, Inc. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Quinn to fulfill the contract for less than $5,000 per ton. Quinn's best defense against performing the contract would be that
A) ​performance of the contract is commercially impracticable.
B) ​procuring the steel would force Quinn into bankruptcy.
C) ​the law has rendered performance of the contract illegal.
D) ​the specific subject matter of the contract has been destroyed.

Accepted Answer

Quinn's best defense against performing the contract would be that performance of the contract is commercially impracticable. This defense is based on the doctrine of commercial impracticability, which allows a party to be excused from performance under a contract when an unforeseen event occurs that makes performance impracticable from an economic standpoint. In this case, the unforeseen shortage of scrap steel would make it economically impracticable for Quinn to fulfill the contract for the agreed-upon price.

Question 2

Omar and Penn want to discharge their contract by executing a new agreement with performance different from what they originally promised. They can best accomplish this by
A) ​a mutual agreement to rescind.
B) ​an accord and satisfaction.
C) ​a novation.
D) ​an alteration of the original contract.

Accepted Answer

An accord and satisfaction is a legal contract whereby two parties agree to discharge a tort claim, contract, or other liability for an amount based on terms that differ from the original amount of the contract or claim.

Question 3

Floors n' More, Inc., hires Gordon to renovate Floors n' Mores showroom. Gordon submits plans that Floors n' More approves. Gordon completes the major reconstruction, paints the interior, and buys the fixtures and furnishings. Floors n' More rejects some of these items because they do not match the plans, and subsequently refuses to allow Gordon to finish the work or to collect payment. Could Gordon sue successfully for payment for the entire contract?

Accepted Answer

The answer of Floors n' More, Inc., hires Gordon to...

Question 4

Fact Pattern 18-2
Flora, who owns and operates Garden Fresh Organic Farms, agrees to sell Harvesters Grocery a minimum quantity of fresh fruits and vegetables every week for three months.
-Refer to Fact Pattern 18-2. If bad weather destroys Flora's crops, the obligation to deliver produce to Harvesters is
A) ​breached.
B) ​discharged.
C) ​not affected.
D) ​suspended.

Accepted Answer

The obligation is discharged due to impossibility of performance caused by the destruction of the crops, which is beyond Flora's control.

Question 5

Fact Pattern 18-2
Flora, who owns and operates Garden Fresh Organic Farms, agrees to sell Harvesters Grocery a minimum quantity of fresh fruits and vegetables every week for three months.
-Refer to Fact Pattern 18-2. If a strike delays delivery of the produce beyond the time for performance, Flora's contract with Harvesters is
A) ​breached.
B) ​discharged.
C) ​not affected.
D) ​suspended.

Accepted Answer

In this situation, Flora's contract with Harvesters would be suspended due to the strike delaying delivery of the produce. This means that the parties are temporarily excused from performing their obligations under the contract, and performance will resume once the strike is over.

Question 6

Ralph agrees to lease an apartment from Susan for one day to see Thomas, the president of the United States, deliver a speech in the street below. The speech is canceled three days before its scheduled date. The contract is
A) ​discharged.
B) ​not affected in terms of Ralph's obligation to pay Susan.
C) ​postponed until another event is scheduled.
D) ​breached.

Accepted Answer

The contract is discharged because the purpose for leasing the apartment was to see the president's speech, which is now canceled. Therefore, the purpose of the contract cannot be fulfilled and the contract is discharged. Ralph is not obligated to pay Susan because the lease agreement was conditional on the event happening.

Question 7

Quest Resources, Inc., contracts with Ring Communications Corporation (RCC) for RCC to design and build an all-weather communications system for Quest's field operations. RCC builds the system, but it functions effectively only in good weather. Is this a breach of the contract? If so, what remedies does Quest have?

Accepted Answer

The answer of Quest Resources, Inc., contracts with Ring Communications...

Question 8

Lana agrees to work as Michelle's personal assistant for one year but dies in the ninth month of the contract. Lana's estate
A) ​is discharged from any contractual liability.
B) ​must find a competent assistant to fulfill the contract.
C) ​must pay damages.
D) ​must refund any money paid to Lana on the contract.

Accepted Answer

Lana's contractual obligations ended upon her death, and her estate is discharged from any further liability under the contract.

Question 9

​Contractors LLC agrees to build a store for Discount Retail, Inc., at a specific location. Before construction begins, the local zoning law is changed to prohibit commercial buildings at that location. In this situation
A) ​Contractors is in breach of contract.
B) ​the local zoning authority is in breach of contract.
C) ​the contract is discharged.
D) ​Discount must compensate Contractors for its lost profit.

Accepted Answer

The contract is discharged due to an unforeseen intervening event (the change in zoning law), which makes it impossible for Contractors to fulfill their obligations. Neither party is at fault and thus, the contract is terminated without any liability.

Question 10

Fact Pattern 18-2
Flora, who owns and operates Garden Fresh Organic Farms, agrees to sell Harvesters Grocery a minimum quantity of fresh fruits and vegetables every week for three months.
-Refer to Fact Pattern 18-2. If the market price for organic produce exceeds the price in the contract with Harvesters, and Flora decides not to deliver the order, her contract with the grocery is
A) ​breached.
B) ​discharged.
C) ​not affected.
D) ​suspended.

Accepted Answer

Flora's failure to deliver the agreed upon quantity of fruits and vegetables would constitute a breach of her contract with Harvesters. Even if the market price for organic produce is higher, Flora is obligated to fulfill her contractual obligations.

Question 11

Rehab Center signs an agreement with Savers Bank to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 percent. Rehab's best argument for avoiding payment to Savers is that
A) ​performance of the contract is commercially impracticable.
B) ​payment of the loan would force Rehab into bankruptcy.
C) ​the law has rendered performance of the contract illegal.
D) ​the specific subject matter of the contract has been destroyed.

Accepted Answer

The law has rendered performance of the contract illegal because the state has passed a law lowering the maximum permissible rate of interest to 15 percent, and the agreement between Rehab Center and Savers Bank was for a 20 percent interest rate. Therefore, the contract cannot be enforced as it violates the state law.

Question 12

Fact Pattern 18-2
Flora, who owns and operates Garden Fresh Organic Farms, agrees to sell Harvesters Grocery a minimum quantity of fresh fruits and vegetables every week for three months.
-Refer to Fact Pattern 18-2. ​If Flora dies before the deliveries begin, her contract with Harvesters is
A) ​breached.
B) ​discharged.
C) ​not affected.
D) ​suspended.

Accepted Answer

Flora's death would discharge the contract, as she would no longer be able to perform her obligations. Her death would be considered an occurrence that is beyond her control, known as a "frustrating event," which would serve to terminate the contract.

Quiz 18: Performance and Discharge

Omar and Penn want to discharge their contract by executing a new agreement with performance different from what they originally promised. They can best accomplish this by

Ralph agrees to lease an apartment from Susan for one day to see Thomas, the president of the United States, deliver a speech in the street below. The speech is canceled three days before its scheduled date. The contract is

Lana agrees to work as Michelle's personal assistant for one year but dies in the ninth month of the contract. Lana's estate

Contractors LLC agrees to build a store for Discount Retail, Inc., at a specific location. Before construction begins, the local zoning law is changed to prohibit commercial buildings at that location. In this situation

Rehab Center signs an agreement with Savers Bank to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 percent. Rehab's best argument for avoiding payment to Savers is that

Fact Pattern 18-2 Flora, who owns and operates Garden Fresh Organic Farms, agrees to sell Harvesters Grocery a minimum quantity of fresh fruits and vegetables every week for three months. -Refer to Fact Pattern 18-2. If Flora dies before the deliveries begin, her contract with Harvesters is