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Exam 19: Discharge of Contracts

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Question 1

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

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Question 2

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A homeowner who supplies the specifications for poured cement walls can hold a contractor liable for damages when the walls that are poured in exact compliance with those specifications prove defective.

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A person who substantially performs a contract is liable for damages to the other party.

For the parties to enter into an accord and satisfaction that discharges the original obligation, there must be a bona fide dispute.

When a building contractor has substantially performed a contract to construct a building, the contractor is entitled to recover the full contract price.

The phrase "time is of the essence" means that:

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

The death or disability of a party to a contract discharges the contract when:

If a debtor 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; therefore, if a debtor specifies that a payment is to be made for a current purchase, the creditor may not apply the payment to an older balance.

A Federal Trade Commission regulation gives a buyer three (3) business days in which to cancel a home-solicited sale of goods or services costing more than:

A change of law discharges a contract if the new law:

If the parties to a contract agree to undo the agreement and return any consideration involved, the contract is discharged by:

If no time period for performance is specified in a contract:

In most bilateral contracts, the performances of the parties are __________.

The doctrine of substantial performance is concerned with the issue of whether an imperfect performance will be considered adequate to discharge one's responsibilities under a contract.

In a case of the sale of property, time is not regarded as of the essence when there has not been any appreciable change in the market value or condition of the property and when the person who delayed does not appear to have done so for the purpose of speculating on a change in market price.

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

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?

Bankruptcy results in a discharge of contractual obligations by __________.

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 mill was destroyed by fire. For two months thereafter, Kentucky Lumber and MillWork Company supplied Rommell with mill work purchased by it from a third party. The Kentucky mill did not wish to continue this plan and declared that the contract was ended. Rommell brought an action against Kentucky Company to enforce the contract. How will the court decide?