Question 1

Schloo offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds.Schloo and Baker signed a written purchase agreement that did not mention the fact that Schloo did not have the necessary funds in his possession.
-The proviso "if he could arrange a loan with the bank for the funds" would be a condition precedent.

Accepted Answer

A condition precedent is a condition that must be met before the parties are obligated to perform under the contract. In this case, Schloo's ability to obtain a loan from the bank is a condition that must be met before the purchase agreement is binding.

Question 2

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Jane received a long distance telephone call from Helen,in which Helen advised Jane that she had decided not sell the bicycle on her return.Jane was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Helen returned then urge her to go through with the sale.Before Helen reached home,her bicycle was stolen,and never found.
-Jane is entitled to claim damages for the difference in value between the agreed price and the price of a similar bicycle on the market.

Accepted Answer

Helen revoked her offer before Jane accepted it, so there was no binding contract. Therefore, Jane is not entitled to claim damages.

Question 3

Schloo offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds.Schloo and Baker signed a written purchase agreement that did not mention the fact that Schloo did not have the necessary funds in his possession.
-The effect of a condition precedent is that the contract does not come into effect unless the condition is satisfied.

Accepted Answer

A condition precedent is a condition that must be satisfied before a contract can come into effect. Therefore, if the condition is not satisfied, the contract will not come into effect.

Question 4

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Jane received a long distance telephone call from Helen,in which Helen advised Jane that she had decided not sell the bicycle on her return.Jane was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Helen returned then urge her to go through with the sale.Before Helen reached home,her bicycle was stolen,and never found.
-Because Helen's bicycle was stolen,Jane is entitled to demand that Helen replace the stolen bicycle with a similar one,and sell it to her.

Accepted Answer

Since Helen's bicycle was stolen, she is unable to sell it to Jane or replace it with a similar one. Therefore, Jane cannot demand that Helen replace the stolen bicycle with a similar one and sell it to her.

Question 5

Mario,a professional entertainer,entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre,and to perform nowhere else during that period of time.A week after the agreement was signed,Mario entered into another agreement with a competitor of Barnum to perform at his opera house.
-Barnum is entitled to treat Mario's actions as a breach of his contract.

Accepted Answer

Mario violated the exclusive agreement by entering into another agreement with a competitor of Barnum. This can be treated as a breach of contract by Barnum.

Question 6

Ken entered into a contract with Horst to haul gravel in his large tandem truck from Horst's gravel pit to a building site some three miles distant,at $60 per load.Before Ken was to begin performance,his truck was destroyed in a serious traffic accident.
-Because Ken is bound in contract,Horst can require Ken to purchase a new truck to perform the agreement.

Accepted Answer

Ken's performance was ultimately prevented by events beyond his control (the destruction of his truck in a serious traffic accident), which is a defense known as impossibility of performance. Therefore, Horst cannot require Ken to purchase a new truck to perform the agreement.

Question 7

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Jane received a long distance telephone call from Helen,in which Helen advised Jane that she had decided not sell the bicycle on her return.Jane was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Helen returned then urge her to go through with the sale.Before Helen reached home,her bicycle was stolen,and never found.
-Had the bicycle not been destroyed,Jane would be entitled to specific performance of the contract if Helen had refused to sell.

Accepted Answer

Since the bicycle was stolen and never found, it is impossible for specific performance of the contract to be carried out. Therefore, Jane would not be entitled to specific performance of the contract.

Question 8

Ken entered into a contract with Horst to haul gravel in his large tandem truck from Horst's gravel pit to a building site some three miles distant,at $60 per load.Before Ken was to begin performance,his truck was destroyed in a serious traffic accident.
-Ken need not perform the contract,as the contract was frustrated by the destruction of the truck.

Accepted Answer

Frustration of contract occurs when an unforeseen event occurs that makes performance of the contract impossible. In this case, the destruction of Ken's truck is an unforeseen event that makes it impossible for him to perform the contract. Therefore, he is not obligated to perform the contract.

Question 9

Derrick offered to purchase Perry's vehicle for $3,050 cash,with Perry to deliver the vehicle the next Wednesday,at which time Derrick would pay the $3,050.On the Wednesday,when Perry did not deliver,Derrick went to Perry's home,and found him in his garden.Derrick offered Perry the money,but Perry refused,saying that he had changed his mind,and did not wish to sell his automobile.
-If Perry refused the tender of the exact amount of money,Derrick would be entitled to take legal action against Perry for breach of contract.

Accepted Answer

Perry and Derrick had entered into a contract wherein Perry agreed to sell his vehicle to Derrick for $3,050 and deliver it on Wednesday. Perry's refusal to sell the vehicle and accept the money constitutes a breach of contract, and Derrick would be entitled to take legal action against him.

Question 10

Schloo offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds.Schloo and Baker signed a written purchase agreement that did not mention the fact that Schloo did not have the necessary funds in his possession.
-If the bank refused to lend Schloo the money,the contract would be enforceable against Jones.

Accepted Answer

The contract is enforceable against Schloo, not Jones. Schloo's ability to secure a loan is a condition precedent, and if he fails to obtain financing, he may be in breach of contract unless the agreement explicitly states otherwise.

Question 11

Mario,a professional entertainer,entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre,and to perform nowhere else during that period of time.A week after the agreement was signed,Mario entered into another agreement with a competitor of Barnum to perform at his opera house.
-Barnum may request the court to issue an injunction to prevent Mario from performing at the competitor's opera house.

Accepted Answer

Mario breached the exclusive performance agreement with Barnum by entering into another agreement with a competitor. Barnum can therefore request an injunction to prevent Mario from performing at the competitor's opera house.

Question 12

Derrick offered to purchase Perry's vehicle for $3,050 cash,with Perry to deliver the vehicle the next Wednesday,at which time Derrick would pay the $3,050.On the Wednesday,when Perry did not deliver,Derrick went to Perry's home,and found him in his garden.Derrick offered Perry the money,but Perry refused,saying that he had changed his mind,and did not wish to sell his automobile.
-Perry would be entitled to reject the tender of payment if it consisted of $3,100 in cash,instead of the required $3,050 in cash.

Accepted Answer

Derrick offered to purchase Perry's vehicle for $3,050 cash, and Perry would be entitled to reject the tender of payment if it consisted of $3,100 in cash, instead of the required $3,050 in cash.

Question 13

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Jane received a long distance telephone call from Helen,in which Helen advised Jane that she had decided not sell the bicycle on her return.Jane was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Helen returned then urge her to go through with the sale.Before Helen reached home,her bicycle was stolen,and never found.
-Repudiation before the date fixed for performance is known as anticipatory breach.

Accepted Answer

Anticipatory breach occurs when one party, before the due date or time for performance, communicates to the other party unequivocally that he is not going to perform his part of the contract. In this scenario, Helen repudiated the contract before the date fixed for performance.

Question 14

Schloo offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds.Schloo and Baker signed a written purchase agreement that did not mention the fact that Schloo did not have the necessary funds in his possession.
-If Baker claimed against Schloo for breach of the contract,Schloo could raise the agreement concerning the need for a bank loan as a collateral agreement,allowing him to avoid the contract.

Accepted Answer

A collateral agreement must be separate and independent from the main contract. Since the written purchase agreement did not mention the bank loan, Schloo cannot use it as a collateral agreement to avoid the contract.

Question 15

Ken entered into a contract with Horst to haul gravel in his large tandem truck from Horst's gravel pit to a building site some three miles distant,at $60 per load.Before Ken was to begin performance,his truck was destroyed in a serious traffic accident.
-If Ken deliberately destroyed his truck,Horst can insist that he perform the agreement or compensate Horst for any loss that might result from Ken's non-performance.

Accepted Answer

If Ken deliberately destroyed his truck, it would be considered a breach of contract due to his intentional act, and Horst could seek remedies such as specific performance or compensation for losses incurred due to Ken's non-performance.

Question 16

Ken entered into a contract with Horst to haul gravel in his large tandem truck from Horst's gravel pit to a building site some three miles distant,at $60 per load.Before Ken was to begin performance,his truck was destroyed in a serious traffic accident.
-If Ken owned a fleet of trucks,and Ken had a number of spare trucks,the doctrine of frustration would not apply to the case,and Ken would be obliged to perform the contract.

Accepted Answer

The doctrine of frustration applies when an unforeseen event makes performance impossible or radically different. If Ken has spare trucks, he can still perform the contract, so frustration does not apply.

Question 17

Derrick offered to purchase Perry's vehicle for $3,050 cash,with Perry to deliver the vehicle the next Wednesday,at which time Derrick would pay the $3,050.On the Wednesday,when Perry did not deliver,Derrick went to Perry's home,and found him in his garden.Derrick offered Perry the money,but Perry refused,saying that he had changed his mind,and did not wish to sell his automobile.
-If Derrick had offered Perry exactly $3,050 in cash,he had made a valid tender of payment.

Accepted Answer

A valid tender of payment means that the offeror (Derrick) has offered the exact amount of money (in this case, $3,050) to the offeree (Perry) as payment for the subject matter of the contract (the vehicle). Since the offer was made and the exact amount was offered, it was a valid tender of payment. However, Perry refused to accept the tender and breached the contract.

Question 18

Derrick offered to purchase Perry's vehicle for $3,050 cash,with Perry to deliver the vehicle the next Wednesday,at which time Derrick would pay the $3,050.On the Wednesday,when Perry did not deliver,Derrick went to Perry's home,and found him in his garden.Derrick offered Perry the money,but Perry refused,saying that he had changed his mind,and did not wish to sell his automobile.
-If Derrick had in his possession three $1,000 bills,and one $100 bill,his tender would be invalid,even though he had cash in excess of the amount requested.

Accepted Answer

The tender is invalid because Perry refused to sell the automobile, not because of the denominations of the bills.

Question 19

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Jane received a long distance telephone call from Helen,in which Helen advised Jane that she had decided not sell the bicycle on her return.Jane was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Helen returned then urge her to go through with the sale.Before Helen reached home,her bicycle was stolen,and never found.
-Helen's decision not to proceed with the sale was an express repudiation of the contract.

Accepted Answer

Helen had offered to sell her bicycle to Jane for $200, which Jane had accepted. However, by informing Jane that she had decided not to sell the bicycle, Helen explicitly repudiated the contract between them. This meant that Jane had a right to rely on this repudiation and treat the contract as terminated. Therefore, when the bicycle was stolen before Helen could change her mind again and sell it to Jane, there was no longer a valid contract between them.

Question 20

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Jane received a long distance telephone call from Helen,in which Helen advised Jane that she had decided not sell the bicycle on her return.Jane was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Helen returned then urge her to go through with the sale.Before Helen reached home,her bicycle was stolen,and never found.
-Jane cannot recover anything from Helen for repudiation of the contract,because the contract was frustrated before the date fixed for performance.

Accepted Answer

Frustration of contract occurs when an unforeseen event occurs, making it impossible to perform the contract. In this case, Helen's bicycle was stolen before the date fixed for performance (her return from the bicycle trip), which frustrated the contract. Therefore, Jane cannot recover anything from Helen for repudiation of the contract.

Quiz 5: Performance and Breach of Contract