Performance Flashcards

A famous portrait artist dies after being paid a deposit but before painting a commissioned portrait. What is the effect on the contract?

Answer: The duty is discharged by impossibility because personal services of a unique party were required

Death of a party whose personal performance is essential discharges the duty by impossibility, though the deposit is typically returned in restitution.

A concert hall burns down without fault of either party before a scheduled performance. The rental contract says nothing about fire. What is the likely result?

Answer: Both parties are discharged because destruction of the essential subject matter makes performance impossible

Destruction of a thing essential to performance, without fault, discharges both parties' remaining duties under impossibility doctrine.

A company hires a tour operator for a parade viewing, but the parade is canceled. The venue is still available and usable. Which doctrine best supports discharging the customer's duty to pay?

Answer: Frustration of purpose

Frustration of purpose applies when performance remains possible but an unforeseen event destroys the principal purpose both parties knew underlay the contract.

A supplier claims discharge because raw material prices unexpectedly rose 30%, making the contract unprofitable. Under impracticability doctrine, what result?

Answer: No discharge, because mere increased cost or lost profit rarely constitutes impracticability

Ordinary market fluctuations and increased expense are foreseeable business risks and generally do not rise to commercial impracticability.

Parties to a disputed debt agree that the debtor will deliver a car instead of paying $10,000, and the creditor accepts the car. What discharges the original duty to pay?

Answer: Execution of the accord through satisfaction

An accord suspends the original duty, and only performance of the accord — the satisfaction — discharges the underlying obligation.

A landlord, tenant, and replacement tenant all agree the replacement will assume the lease and the original tenant is released. What has occurred?

Answer: A novation discharging the original tenant

A novation substitutes a new party with the obligee's assent to release the original obligor, fully discharging the original tenant.

Both parties to a wholly executory contract agree to call the deal off before either performs. What discharges their duties?

Answer: Mutual rescission, with each party's surrender of rights serving as consideration

Mutual rescission of an executory contract is enforceable because each side's giving up its contractual rights supplies consideration.