chapter 7 condition Flashcards
Which of the following statements regarding conditions in a contract of purchase and sale are TRUE?
a. A condition is a promise which is not fundamental to the contract.
b. In most cases, the breach of a condition permits the innocent party to terminate the contract.
c. A “time is of the essence” clause indicates that timely performance is a condition of the contract.
d. If a term is not a condition, then a breach of that term will not result in any remedies for the innocent party.
- A and C only
- A and D only
- C and D only
- B and C only
Correct Answer: 4
The terms of a contract will be either conditions or warranties. A condition is a term which goes to the very heart or root of the contract.
A warranty is merely a promise which is not fundamental to the contract. A breach of a condition permits the innocent party to terminate the contract and sue for damages, or to continue the contract and sue for specific performance.
When a clause includes the phrase “time is of the essence”, this indicates that timely performance is a condition of the contract.
Which of the following statements regarding the remedy of specific performance is TRUE?
- Whenever a condition of a contract is breached, the innocent party has a right to specific performance.
- Specific performance is a statutory remedy granted at the discretion of the court.
- Specific performance is often an appropriate remedy when a contract respecting land is breached, if the land is unique.
- Judges choose the remedy of specific performance rather than damages in order to punish the party who is in breach of the contract.
Correct Answer: 3
Specific performance is an equitable remedy that will be awarded at the court’s discretion in circumstances where the legal remedy of damages would be inadequate. Specific performance is intended to enforce a contract rather than to punish persons in breach.
Specific performance is often an appropriate remedy when a contract respecting land is breached if the subject property is unique, and a reasonable substitute for it is not readily available.
