Chapter 10. Performance And Non-Performance (231- 260) Flashcards
A, a shipowner, promises to carry B’s cargo on his ship. B promises to pay A the stipulated freight. They exchange these promises in the expectation that there will be a subsequent exchange of those performances. A fails to carry B’s cargo, and B thereupon refuses to pay the freight. Does A have a claim against B?
A’s carrying the cargo and B’s paying the freight are to be exchanged under the exchange of promises. Therefore, under the rule stated in § 237, A has no claim against B. Restatement 2d of Contracts § 231(b)
In return for A’s promise to deliver a machine, B promises to pay A $10,000 within 30 days. They exchange these promises in the expectation that there will be a subsequent exchange of those performances. A fails to deliver the machine, and B thereupon refuses to pay any part of the $10,000. Does A have a claim against B?
A’s delivery of the machine and B’s payment of the $10,000 are to be exchanged under the exchange of promises. Therefore, under the rule stated in § 237, A has no claim against B. Restatement 2d of Contracts § 231(b)
In return for A’s promise to deliver a machine priced at $10,000, B pays A $5,000 as a down payment and promises to pay A the $5,000 balance within 30 days after delivery of the machine. They exchange these promises in the expectation that delivery of the machine will be exchanged, at least in part, for the $5,000 balance and that the $5,000 balance will be exchanged for the machine. A fails to deliver the machine, and B thereupon refuses to pay the $5,000 balance. Does A have a claim against B? B against A?
A’s delivery of the machine and B’s payment of the $5,000 balance within 30 days are to be exchanged under the exchange of promises. Therefore, under the rule stated in § 237, A has no claim against B. B is entitled to restitution of the $5,000 he paid (see §§ 370-77) in addition to his claim against A for damages for breach (§ 243). Restatement 2d of Contracts § 231(c)
A promises to sell and B to buy a food freezer priced at $1,200 to be paid for in monthly installments over an eighteen-month period. A also promises to sell B frozen food at greatly reduced prices, and B promises to buy an initial quantity, deliverable at the same time as the freezer, for $200, with additional quantities to be available in the future at B’s option. Although two separate writings are executed, one entitled “Freezer Contract” and, the other, entitled “Food Contract,” the promises are made as part of the same bargain, and payment for the freezer, for example, is to be exchanged at least in part for the delivery of the food. A tenders the freezer but fails to supply the food although B tenders the $200. B thereupon refuses to take the freezer or to pay anything. Does A have a claim against B?
The performances promised in the two writings, A’s delivery of the freezer and the food and B’s payment for the freezer and the food, are to be exchanged under a single exchange of promises. Therefore, under the rule stated in § 238, A has no claim against B. Restatement 2d of Contracts § 231(d)
A, the owner of a small publishing business, makes a written contract with B, a large publishing company, to sell A’s business to B in exchange for 10,000 shares of B’s stock, having a market price equal to the fair value of A’s business. At the same time, A and B execute a separate writing under which A is to work for B for 5 years, subject to renewal at B’s option, at a salary of $30,000 a year plus a bonus based on sales. B unjustifiably discharges A after one month, and A thereupon refuses to complete the transfer of his business to B. Does A have a claim against B? B against A? What might a court determine?
Whether or not A’s refusal to complete the exchange is a breach depends on whether, under the bargain of the parties, there are two contracts or only one contract. If the court determines that the promise of A to work for B is no part of the consideration for B’s promise to buy A’s business, and that the promise of B to employ A is no part of the consideration for A’s promise to sell his business, there are two separate exchanges of promises. The performance promised in the one writing and the performance promised in the other cannot then be performances to be exchanged under a single exchange of promises. B then has a claim against A for damages for breach of the contract to sell A’s business to B, and A has a claim against B for damages for breach of the contract to employ A (§ 243). If, however, the court determines that each of the promises is at least part of the consideration for the other, there is only one exchange of promises. Under the rule stated in § 232 all of the performances of each party taken collectively are treated as performances to be exchanged under that exchange of promises. Under the rule stated in § 238, B then has no claim against A for damages for A’s refusal to complete the transfer of his business to B, but A has a claim against B for damages because of his unjustifiable discharge of A (§ 243). Restatement 2d of Contracts § 231(d)
A, a wholesaler, promises to sell and B, a retailer, promises to buy goods together with related advertising material, payment to be made within 30 days of delivery. A also promises not to sell similar advertising material to any other retailer in B’s city. A sells similar advertising material to another retailer in B’s city, and B thereupon refuses to take or pay for the goods. Does A have a claim against B?
A’s selling B goods together with advertising material and not selling others similar advertising material, taken collectively, and B’s payment are to be exchanged under the exchange of promises. Therefore, under the rule stated in § 237, if A’s failure of performance is material, A has no claim against B. Restatement 2d of Contracts § 232(a)
A promises to sell to B a lot in a subdivision for $8,000. B promises to pay in four annual installments of $2,000 each, beginning one year after execution of the contract. A promises to begin to make improvements and pave the streets within 60 days and to complete work within a reasonable time and promises to deliver a deed at the time of the final payment. A fails to pave the streets, and B thereupon refuses to pay any installments. Does A have a claim against B?
A’s making improvements, paving streets, and delivering a deed, taken collectively, and B’s paying installments are to be exchanged under the exchange of promises. Therefore, under the rule stated in § 237, if A’s failure of performance is material, A has no claim against B. Restatement 2d of Contracts § 232(a)
A employs B under a five-year employment contract, which contains a valid covenant under which B promises not to engage in the same business in a designated area for two years after the termination of the employment. It expressly provides that “this covenant is independent of any other provision in this agreement.” After B has begun work, A unjustifiably discharges him, and B thereupon engages in business in violation of the covenant. What would a court need to determine for A to have a claim against B?
A’s employing B and B’s working for A are to be exchanged under the exchange of promises. The quoted words indicate an intention that A’s employing B is not to be exchanged for B’s refraining from engaging in the same business. If the court concludes that this intention is clearly manifested, A has a claim against B for damages for breach of his promise not to compete. Restatement 2d of Contracts § 232(a)
A contracts to sell and B to buy a machine, to be delivered immediately, for $10,000. As part of the same bargain, B gives A his negotiable promissory note for $10,000 to A’s order, payable in 90 days, but the note makes no reference to the transaction out of which it arises. A fails to deliver the machine. Does A have a claim against B?
A’s delivering the machine and B’s paying the note are to be exchanged under the exchange of promises. Therefore, under the rule stated in § 237, A has no claim on the note or the contract against B. See Uniform Commercial Code §§ 3-306, 3-408, and 3-307(3). Restatement 2d of Contracts § 232(a)
A, an insurance company, issues to B a group health insurance policy covering B’s employees for one year beginning January 1 in return for B’s promise to pay the premium on February 1. During the month of January A unjustifiably rejects proper claims filed by B’s employees under the policy. B refuses to pay the premium on February 1. Does A have a claim against B? Why?
A’s paying proper claims of B’s employees and B’s paying the premium are to be exchanged under the exchange of promises. Therefore, under the rule stated in § 237, if A’s breach is material, A has no claim against B. Restatement 2d of Contracts § 232(c)
A contracts to sell and B to buy ten identical carloads of coal for $100,000. Assuming no additional terms, is the delivery of the ten carloads divisible?
Delivery by A of all ten carloads is due in a single lot. Restatement 2d of Contracts § 233(a)
A contracts to sell and B to buy ten identical carloads of coal for $100,000. It is known by both A and B that only one carload of coal will be available at a time. Assuming no additional terms, is the delivery of the ten carloads divisible?
A may deliver one carload at a time. Restatement 2d of Contracts § 233(a)
A contracts to sell and B to buy ten identical carloads of coal for $100,000. It is known by both A and B that only one carload of coal will be available at a time. Assuming no additional terms, is the payment for each of the ten carloads divisible?
Payment of $10,000 by B is due at the same time that A delivers each carload of coal. Restatement 2d of Contracts § 233(b)
A promises to sell land to B, delivery of the deed to be on July 1. B promises to pay A $50,000, payment to be made on July 1. Assuming no additional terms, when is the delivery of the deed and payment of the price due?
Delivery of the deed and payment of the price are due simultaneously. Restatement 2d of Contracts § 234(b)
A promises to sell land to B, the deed to be delivered on July 1. B promises to pay A $50,000, no provision being made for the time of payment. Assuming no additional terms, when must performance of the delivery of the deed and payment of the price occur?
Delivery of the deed and payment of the price are due simultaneously. Restatement 2d of Contracts § 234(b)
A promises to sell land to B and B promises to pay A $50,000, no provision being made for the time either of delivery of the deed or of payment. Assuming no additional terms, when is the delivery of the deed and payment of the price due?
Delivery of the deed and payment of the price are due simultaneously. Restatement 2d of Contracts § 234(b)
A promises to sell land to B, delivery of the deed to be on or before July 1. B promises to pay A $50,000, payment to be on or before July 1. Assuming no additional terms, when is the delivery of the deed and payment of the price due?
Delivery of the deed and payment of the price are due simultaneously. Restatement 2d of Contracts § 234(b)
A promises to sell land to B, delivery of the deed to be on or before July 1. B promises to pay A $50,000, payment to be on or before August 1. Assuming no additional terms, when is the delivery of the deed and payment of the price due?
Delivery of the deed and payment of the prices are not due simultaneously. Restatement 2d of Contracts § 234(b)
A promises to sell land to B, delivery of the deed to be four years from the following July 1. B promises to pay A $50,000 in installments of $10,000 on each July 1 for five years. Assuming no additional terms, when is the delivery of the deed and payment of the last installment due?
Delivery of the deed and payment of the last installment are due simultaneously. Restatement 2d of Contracts § 234(c)
A promises to sell land to B, delivery of the deed to be one year from July 1. B promises to pay A $50,000 in installments of $10,000 on each July 1 for five years. Assuming no additional terms, when is the delivery of the deed and payment of the second installment due?
Delivery of the deed and payment of the second installment are due simultaneously. Restatement 2d of Contracts § 234(c)
A promises to sell land to B, delivery of the deed to be four years from the following July 1. B promises to pay A $50,000 in installments of $10,000 on each July 1 for five years. B duly pays the first three installments, but unjustifiably does not pay the fourth until the fifth is due. Is there a breach? When will the delivery of the deed and payment of the forth and fifth installments due?
If B’s failure to pay the fourth installment discharges A’s remaining duties of performance under the rule stated in § 237, A has a claim for damages for total breach (§ 243(1)), and no further performance is due from either party. Otherwise B’s failure to pay the fourth installment gives rise to only a claim for damages for partial breach because of the delay, and, unless circumstances make it appropriate for A to require B to pay the fourth installment first, delivery of the deed and payment of the fourth and fifth installments are then due simultaneously. Restatement 2d of Contracts § 234(d)
A contracts to do the concrete work on a building being constructed by B for $10 a cubic yard. When is payment by B due?
In the absence of language or circumstances indicating the contrary, payment by B is not due until A has finished the concrete work. Restatement 2d of Contracts § 234(f)
A contracts to do the concrete work on a building being constructed by B for $10 a cubic yard. B promises to furnish a bond to secure his payment. No provision is made as to the time for furnishing the bond. When is performance by A due?
No performance by A is due until B has furnished the bond. Although the doing of the concrete work by A requires a period of time and the furnishing of the bond by B does not, the circumstance that the bond is required to secure payment by B indicates that B must furnish the bond first. Restatement 2d of Contracts § 234(f)
A contracts to make alterations in B’s home for $5,000. $500 is to be paid on the signing of the contract, $1,500 on the starting of work, $2,000 on the completion of rough carpentry and rough plumbing, and $1,000 on the completion of the job. When is payment by B due?
Payment by B is due as the work progresses according to the terms of the contract. Restatement 2d of Contracts § 234(f)