Question 1

Briefly describe three ways in which a contract may be discharged by operation of law.

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Question 2

Thelonius agreed to purchase an antique piano from Ruby.He was required to pay the purchase price of $100 000 by cheque on June 1, and she was required to deliver the instrument on June 15.On June 1, Thelonius appeared at Ruby's place of business with a cheque for $100 000.However, because she was having second thoughts about actually delivering the piano to Thelonius, Ruby refused to accept his cheque.Explain the consequences of that refusal in terms of Thelonius's obligation to make payment.

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Question 3

As a result of her independent work as a research scientist, Zoe had confidential information concerning a new process for manufacturing light bulbs.She entered into a contract under which she promised to sell her information exclusively to Lampadina Inc, a light bulb manufacturer.Under the terms of that agreement, she was to provide the information on June 1 and Lampadina was to pay $250 000 within six weeks after that.On March 31, however, Zoe fell in love with Hans, the president of Gluhlampe Inc, another light bulb manufacturer.Two weeks later, she disclosed her confidential information to Hans.She then told Lampadina that since she could no longer provide "confidential information," their contract was at an end and she no longer owed any obligations to them.Is she correct? Explain your answer.

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Question 4

Explain why a breach of contract supports the right of discharge in some situations, but not others.

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Question 5

Identify two policy reasons why contractual rights may become unenforceable under a statute of limitation.

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Question 6

Describe the process of novation.Explain whether or not the process requires consideration.If so, explain how consideration is provided.

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Question 7

Pierette entered into a contract with Hugo.She agreed to deliver a shipment of gold to his jewellery store each week for a year.He agreed to pay a specific price.The contract also said: "The buyer shall have the right to terminate this contract in the event of a substantial change in the market price of gold." After delivering gold to Hugo for several months, Pierette refused to go on with the contract.Her decision to do so was based on the fact that while her contract with Hugo contained a specific price, the market value of gold had suddenly increased a substantial amount.Consequently, she realized that her contract with Hugo no longer made good financial sense from her perspective.Would a court accept that argument from Pierette? Explain your answer.

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Question 8

Gretchen, who lived in Calgary, entered into a contract with Matt, who lives in Edmonton.He paid $2500 to her at the outset and she promised that she would edit a book that he was in the process of writing.After completing slightly more than half of the job, however, Gretchen received an offer to act in a play on Broadway.Since acting had always been her dream, she pleaded with Matt to let her go to New York without finishing her project with him.She also pleaded with him to retain the $2500 that she had received from him because she needed a great deal of money to make the move.Since he was fond of Gretchen, Matt agreed.She then sold almost all of her belongings, including her computer, and moved to New York.A week later, however, Matt changed his mind when he learned that Gretchen was acting in Cats, a Broadway production that he disliked very much.He therefore now insists that she must fulfill the rest of her contractual obligations.Is he correct? Explain your answer.

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Question 9

Harlan received a bill for $500 from Oxford Power Inc, with which he had a contract for the supply of electricity.The amount of the bill, which was much larger than Harlan expected, was attributable to the fact that Oxford's own costs had recently increased.Although Harlan initially refused to pay anything, he was eventually convinced by Oxford's representative that he was contractually liable for the entire $5000.As a sign of protest, he collected $500 in pennies, placed them in a large wheelbarrow, and proceeded to Oxford's main office to make payment.Oxford, however, refused payment.Was it entitled to do so? Explain your answer.

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Question 10

Ichiro and Emily discussed the possibility that he might buy a painting from her at a price of $100 000.Both parties wanted the sale to occur, and both were confident that Ichiro would be able to secure bank financing for the transaction.However, the parties also agreed that neither should have any obligations unless and until such financing was arranged.Explain how Ichiro and Emily can best achieve that result.

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Question 11

Identify a situation in which a party is entitled to have a contract discharged on the basis of performance, even though that performance constitutes a breach of the contract.

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Question 12

Explain the difference between a "condition," a "condition subsequent," a "condition precedent," and a "true condition precedent" as those terms have been used in this chapter.Which of those types of conditions can be breached? Explain your answer.

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Question 13

"Even if the parties did not agree to such an arrangement when they created their contract, they may agree to bring their contract to an early end without relying upon consideration." Identify two situations in which is true.

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Question 14

Woogles Inc manufactured widgets in Winnipeg.It contractually agreed to sell 5000 widgets to Peja in Halifax for a price of $100 000.Because the Province of Manitoba is concerned about the export of widgets, it requires all such sales to be licenced.Such licences are easily obtained if the seller fills out a simple application form.Because of that requirement, the contract between Woogles and Peja contained a clause that said, "Performance of this agreement is conditional upon the acquisition of an export licence." Shortly after entering into its contract with Peja, Woogles received an offer from another buyer, who was located within Manitoba, to pay $125 000 for 5000 widgets.Woogles accepted that offer, even though it only had a total of 5000 widgets to sell.It then simply refused to apply for the export licence that was necessary for its contract with Peja.Can Woogles escape all responsibility to Peja in that way? Explain your answer.

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Question 15

"If a contract is discharged for breach, it no longer has any effect." Is that statement correct? Explain your answer.

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Quiz 11: Discharge and Breach