Question 1

Fact Pattern 11-1 
Mutual Company enters into a contract to employ Neil as an investment manager for two years.During the first year,Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.
-Refer to Fact Pattern 11-1.With respect to Mutual's duties,Neil's performance most likely

Accepted Answer

The answer of Fact Pattern 11-1 
Mutual Company enters into...

Question 2

Farley agrees to lease an apart?ment from Gena for one day to see Hugh,the president of the United States,deliver a speech in the street below.The speech is can?celed ten days before its date.Farley's con?tract with Gena

Accepted Answer

The purpose of the lease was for Farley to see the speech, which is now canceled. Therefore, the purpose of the contract is frustrated, and it is discharged.

Question 3

Roy and Sheila are parties to a contract.They subse?quently agree that Tony should take Roy's place and assume all of his rights and duties under the contract.This is

Accepted Answer

Novation occurs when a new party is substituted for an original party, and they assume all the rights and obligations of the original party under the contract. In this scenario, Tony is taking over Roy's place and assuming all of his rights and duties under the contract, indicating that a novation has taken place.

Question 4

Fact Pattern 11-2 
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1.One month before the term begins,Bell is underbid by a competitor and loses a major client,Delta Hospital Center.Bell now refuses to hire Chris.
-Refer to Fact Pattern 11-2.Under the circumstances,with respect to damages,Chris can

Accepted Answer

Chris can bring an action immediately because Bell has breached the contract by refusing to hire Chris. Chris may be entitled to damages resulting from the breach, such as lost wages and benefits.

Question 5

Felipe agrees to work as Gary's personal accountant for one year but dies in the sixth month of the contract.Felipe's estate

Accepted Answer

In the case of the death of one party in a contract for personal services, the contract is discharged as it is impossible to perform. Thus, Felipe's estate is discharged from any contractual liability.

Question 6

Fact Pattern 11-2 
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1.One month before the term begins,Bell is underbid by a competitor and loses a major client,Delta Hospital Center.Bell now refuses to hire Chris.
-Refer to Fact Pattern 11-2.Bell's repudiation is most likely

Accepted Answer

Bell's refusal to hire Chris one month before the contract starts is a material breach because it goes to the heart of the contract and deprives Chris of the entire benefit of the contract.

Question 7

Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest.Later,the state legislature passes a law lowering the maximum permissible rate of interest from 15 per?cent.Diners' best argument for avoiding payment to Eagle is that

Accepted Answer

The state legislature has passed a law lowering the maximum permissible rate of interest to 15 percent. This makes the performance of the contract illegal as it violates the law. Therefore, Diners' best argument for avoiding payment to Eagle is that the contract has been rendered illegal by the new law.

Question 8

Red operates a scrap metal business and contracts to provide ten tons of scrap steel at $50 per ton to be delivered to Sabin in six months.An un?fore?seen shortage of scrap steel suddenly develops,making it impossible for Red to fulfill his contract for less than $500 per ton.Red's best de?fense against performing the contract would be

Accepted Answer

Red can argue commercial impracticability as a defense because an unforeseen shortage of scrap steel has made it impossible for him to fulfill the contract for less than $500 per ton. This defense allows him to be excused from performance under the contract due to unforeseen and uncontrollable circumstances that make performance commercially impracticable.

Question 9

Fact Pattern 11-1 
Mutual Company enters into a contract to employ Neil as an investment manager for two years.During the first year,Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.
-Refer to Fact Pattern 11-1.Neil's performance is most likely

Accepted Answer

Neil's frequent unexplained absences and inadequate management of Mutual's investments would likely be considered a material breach of the contract, given that his role as an investment manager is a fundamental aspect of his employment.

Question 10

Elin contracts to buy six cases of vintage Fertile Valley wine from Grapes & Vines Winery for $1,200.The contract states that delivery is to be made at Elin's residence "on or before May 1,to be used for daughter's wedding reception on May 2." On May 1,Grapes & Vines's delivery van is involved in an accident,and no wine is delivered that day.On the morning of May 2,Elin buys the wine from Happy Hill Winery.That afternoon,just before the reception,Grapes & Vines tenders delivery of the wine at Elin's residence.Elin refuses tender.Grapes & Vines sues Elin for breach of contract.How is the court most likely to rule?

Accepted Answer

The answer of Elin contracts to buy six cases of...

Question 11

Pam borrows $5,000 from Quality Auto Sales to buy a car.When Pam does not pay the loan or return the car,Quality wants to transfers the right to the payment to Rapid Collection Agency.Rapid agrees to pay Quality for this right,but for a price that is less than the amount owed.Can Quality transfer this right to Rapid without Pam's consent? If so,and Quality committed fraud in the deal with Pam,could Pam legiti?mately refuse to pay Rapid? Explain.

Accepted Answer

The answer of Pam borrows $5,000 from Quality Auto Sales...

Quiz 11: Third Party Rights and Discharge

Farley agrees to lease an apart?ment from Gena for one day to see Hugh,the president of the United States,deliver a speech in the street below.The speech is can?celed ten days before its date.Farley's con?tract with Gena

Roy and Sheila are parties to a contract.They subse?quently agree that Tony should take Roy's place and assume all of his rights and duties under the contract.This is

Felipe agrees to work as Gary's personal accountant for one year but dies in the sixth month of the contract.Felipe's estate

Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest.Later,the state legislature passes a law lowering the maximum permissible rate of interest from 15 per?cent.Diners' best argument for avoiding payment to Eagle is that