TX Bar Contracts 4

Question 1

A lease agreement states: 'This lease is contingent upon the tenant obtaining financing by March 1.' The tenant cannot obtain financing by that date.
What type of condition is this, and what is the legal effect?

Accepted Answer

Condition precedent; the tenant's duty to perform the lease never arises

Answer

Condition subsequent; the lease continues unless affirmatively terminated

Answer

Constructive condition; the landlord must perform first

Answer

Implied condition; the tenant may waive it unilaterally without consequence

Question 2

A condition in a contract benefits only one party. That party, without consideration, orally communicates that it will not insist on the condition. Later, before the other party detrimentally relies, the first party tries to reinstate the condition. Under contract law, may it do so?

Accepted Answer

Yes, a condition can generally be retracted before the other party detrimentally relies on the waiver

Answer

No, once waived a condition can never be reinstated

Answer

No, a waiver requires consideration to be valid

Answer

Yes, only if the waiver was in writing

Question 3

After a dispute arises over the amount owed under a contract, the parties agree that the debtor will pay $800 in full satisfaction of a genuinely disputed $1,200 claim, and the creditor accepts. Is this agreement enforceable even though the creditor gave up $400?

Accepted Answer

Yes, because accord and satisfaction of a genuinely disputed claim is enforceable — the compromise itself is consideration

Answer

No, because the creditor received less than owed and there was no consideration

Answer

No, because modifications to payment terms require a writing under the Statute of Frauds

Answer

Yes, but only if the debtor pays the additional $400 within a reasonable time

Question 4

A developer contracts with a city to build a stadium. Later, a new law is enacted making the specific type of structure illegal to build. Which doctrine most likely discharges the developer's contractual duty?

Accepted Answer

Supervening illegality as a form of impossibility/impracticability

Answer

Frustration of purpose

Answer

Novation

Answer

Anticipatory repudiation

Question 5

A company contracted to sell corn from a specific harvest. The harvest was destroyed by an unexpected flood. The seller claims it is discharged from the contract. Which best describes the applicable doctrine?

Accepted Answer

Impossibility due to destruction of the specific subject matter of the contract

Answer

Frustration of purpose — the buyer's purpose is frustrated

Answer

Mutual mistake — both parties assumed the crop would survive

Answer

Accord and satisfaction — the seller offers substitute goods

Question 6

A company leased a building near a planned parade route, paying a premium rent. The government later cancelled all public events, making the building's location worthless for the planned purpose. Which doctrine best describes the company's defense against paying rent?

Accepted Answer

Frustration of purpose — an unforeseen event destroyed the principal purpose of the contract

Answer

Impossibility — performance of paying rent is objectively impossible

Answer

Mutual mistake — both parties were wrong about future events

Answer

Commercial impracticability — rent payment has become more expensive

Question 7

Under the common law, a contract modification generally requires consideration. However, under the UCC, a modification to a sales contract requires:

Accepted Answer

Good faith, but no new consideration is required

Answer

New consideration and a writing in all cases

Answer

Mutual assent in writing only if the original contract was written

Answer

Notarization and acknowledgment by both parties