BUS311_chapter_06

This means that it must be impossible for anyone not

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Unformatted text preview: Performance If, after the parties have made the contract, a reasonably unforeseeable event occurs that makes it objectively impossibly to perform the contract, the contract is discharged. This means that it must be impossible for anyone, not just the contracting party, to perform. Example 6.11. Simon contracts to sell his original Picasso painting to Bianca for $10 million. The painting is destroyed in a house fire. Simon is discharged and will not be liable to Bianca. Example 6.12. Finley contracts to sell 100 bushels of corn to Bryan. Finley’s corn crop is destroyed by an unusually violent storm. Finley is not discharged, because someone else could deliver 100 bushels of corn, so there is no objective impossibility. Contracts for personal services are generally discharged by death of either party, while contracts for goods or real estate are not. For example, if Peter contracts to paint Harry’s portrait, and either one of them dies before the portrait is painted, the contract is discharged. But if Peter contracts to sell Harry his house, the contract can still be performed by the estate, if one of them dies, and so it is not discharged. Illegality obviously discharges a contract, since the law would not punish someone for obeying it! If Gina contracts to employ Oliver as manager of her casino, and then the state outlaws gambling, Oliver is out of a job. Commercial Impracticability Members of Missouri Task Force One search-and-rescue team work at a tornado-damaged Home Depot store in May of 2011 in Joplin. A large tornado moved through much of the city, damaging a hospital and hundreds of homes and businesses. Where such a catastrophic event occurs, it is likely that any number of contracts may be discharged due to impossibility of performance. What if the unforeseen event simply makes it more difficult to perform? Whether the contract is discharged is mainly a question of degree. For example, if Omega Oil Company contracts to supply Alpha Airlines with jet fuel at a set price for the next two years, and then the price of fuel goes up 35 percent, is Omega discharged?...
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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.

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