Chapter_17_Answers_to_Problems

Chapter_17_Answers_to_Problems - C HAPTER17 PERFORMANCE...

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CHAPTER 17 PERFORMANCE, BREACH AND  DISCHARGE 1 ANSWERS TO PROBLEMS CHAPTER 17 1. A–1 Roofing Co. entered into a written contract with Jaffe to put a new roof on the latter’s residence for $1,800, using a specified type of roofing, and to complete the job without unreasonable delay. A–1 undertook the work within a week thereafter, but when all the roofing material was at the site and the labor 50 percent completed, the premises were totally destroyed by fire caused by lightning. A–1 submitted a bill to Jaffe for $1,200 for materials furnished and labor performed up to the time of the destruction of the premises. Jaffe refused to pay the bill, and A–1 now seeks payment from Jaffe. Should A-1 prevail? Explain. Answer: Impossibility . Decision for A-1 Roofing Co. As a general rule, and in the absence of a provision to the contrary in the contract, if the act to be performed is necessarily dependent upon the continued existence of a specific thing, its destruction before the time of performance, without the fault of the promisor, will excuse nonperformance of the contract, unless such destruction could have been reasonably anticipated. The rule is based on an implied condition of the continued existence of a particular thing. However, the out-of-pocket expenses present a question as to whether restitution is appropriate. In the United States, courts have generally taken the view that when a contract is discharged by impossibility or frustration the parties must make restitution for the benefits conferred upon them. Sometimes, the concept of "benefit" is stretched to include expenses incurred in preparation for performance. There is increasing recognition that restitution, when employed to unwind a contract that cannot be performed, is concerned with equitable readjustment of the gains and losses sustained by the parties and not merely the redressing of unjust enrichment. 2. By contract dated January 5, Rebecca agreed to sell to Nancy, and Nancy agreed to buy from Rebecca, a certain parcel of land then zoned commercial. The specific intent of Nancy, which was known to Rebecca, was to erect a storage plant on the land; and the contract stated that the agreement was conditioned upon Nancy’s ability to construct such a plant upon the land. The closing date for the transaction was set for April 1. On February 15, the city council rezoned the land from commercial to residential, which precluded the erection of the storage plant. As the closing date drew near, Nancy made it known to Rebecca that she did not intend to go through with the purchase because the land could no longer be used as intended. On April 1, Rebecca tendered the deed to Nancy, who refused to pay Rebecca the agreed purchase price. Rebecca brought an action against Nancy for breach of their contract. Can Rebecca enforce the contract?
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