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Unformatted text preview: the courts may discharge a contract for frustration of purpose.
Example 6.14. Juan pays Jacob $500 to paint his car, and makes an appointment to take the car to his shop three days later. The next day, a severe
storm causes a tree to fall on Juan’s car, causing damage far in excess of the
car’s market value. The contract is discharged, since its purpose has been
frustrated by an unforeseen intervening event (the damage caused by the
storm). Jacob could still paint the car, and may even wish to do so; but to
allow this contract to be carried out would be wasteful and unreasonable.
Example 6.15. Julia contracts to rent Paul’s balcony, which overlooks the
planned parade route for the upcoming royal wedding procession of Prince
Boris and Lady Sophia, for $500. Unfortunately, the wedding is called off
when Lady Sophia discovers Prince Boris’s infidelities. Julia’s contract
with Paul is discharged due to frustration. She can still rent the balcony,
but it would be silly to do so now! Discharge by New Agreement
A contract is an agreement, and the parties are free to agree to do something else if they
wish to. For example, sometimes the parties simply agree they do not want to go through
with the deal. This is a rescission, or cancellation, of the contract. Sometimes they might
agree to change the consideration, which is an accord and satisfaction.
Example 6.16. Commercial Realty (CR) is a company that owns and rents
to others commercial property. CR has contracted to rent the property at rog80328_06_c06_111-133.indd 122 10/26/12 5:37 PM Section 6.3 Remedies for Breach CHAPTER 6 100 Elm Street to Bright Boutique on a five-year lease. Now CR decides it
would really like to sell 100 Elm, and so it offers Bright another property,
66 Oak Avenue, at a reduced rent. Bright agrees, and moves into the Oak
Avenue property. The previous lease is discharged.
Suppose in the previous situation, CR instead offered Bright $1,000 in consideration if
Bright would simply let CR out of the Elm Street lease, and Bright accepts. This illustrates
a valid release, which discharges the previous contract. Or if Bright wanted to get out
of the lease and found Antiques Unlimited as a substitute tenant for CR, and CR agreed
to accept Antiques and...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.
- Spring '10
- Business Law