- What is the likely outcome of the manufacturer's lawsuit? Select one.
Answer: The manufacturer will lose, because the temporary impossibility discharged the contract entirely as performance after the delay would be materially more burdensome to the buyer.
The correct answer is B. A temporary impossibility or impracticability suspends the duty to perform but does not discharge it. However, if performance after the delay would be materially different or more burdensome for either party, the duty is discharged. Here, the 180-day embargo caused a significant delay, and the facts state the buyer's need for the parts had passed. This makes the delayed performance materially different from what was bargained for, discharging the buyer's duty to accept and pay. A is incorrect because it ignores the exception for material burdensomeness. C is incorrect because the manufacturer's notification was a statement of its inability to perform due to a supervening event, not a repudiation. D is incorrect as such an embargo is not typically considered a foreseeable, assumed risk unless specific circumstances suggest otherwise.
- Is the events company's duty to pay the remainder of the rental fee discharged? Select one.
Answer: Yes, because the new law made the contract's performance legally impossible.
The correct answer is A. Performance of a contract is discharged if it becomes objectively impossible due to a supervening governmental law or regulation that makes the performance illegal. The new law prohibiting large gatherings directly forbids the contracted-for event, making the contract legally impossible to perform. B is also a strong argument, but impossibility is the more direct and precise defense when the performance itself is outlawed. C is incorrect as parties are not generally held to assume the risk of all future regulatory changes unless specified in the contract or foreseeable. D is incorrect because the company is not required to seek a waiver or fundamentally alter the nature of its performance (a 20,000-person festival vs. a 500-person gathering) to avoid discharge.
- Will the U.S. company be excused from performance? Select one.
Answer: No, because the force majeure clause did not specifically list strikes, and its list will be interpreted as exhaustive.
The correct answer is C. When a contract includes a specific force majeure clause, courts often interpret the list of excusing events as exclusive. Under the interpretive canon expressio unius est exclusio alterius (the expression of one thing is the exclusion of another), by listing specific events like war and flood but omitting strikes, the parties are presumed to have allocated the risk of a strike to the performing party. A is incorrect because the presence of a specific force majeure clause preempts the general common law or UCC defense of impracticability; the contract itself allocates the risk. B is incorrect because a strike is a human-caused event and is not analogous to a natural disaster or act of God. D is a plausible real-world argument, but C is the better legal answer based on contract interpretation principles.
- What is the legal status of the engineering firm's obligation to the city? Select one.
Answer: The firm's duty is fully discharged by impossibility, and it has no further obligation to the city.
The correct answer is A. The contract was for the personal services of a specific, named engineer. His death makes performance of the contract as written impossible. Because the engineer was essential and unique, his death discharges the firm's duty to perform. B is incorrect because while a corporation's existence continues, the performance of a personal services contract that depends on a specific individual is discharged by that individual's death. C is incorrect because the facts state the engineer was paid for the work he completed, so there is likely no unjust enrichment for the city to recover via restitution. D is incorrect because the duty is discharged entirely, not just suspended or modified; a comparable engineer with the same 'unique vision' does not exist.
- Which of the following is the French company's strongest defense? Select one.
Answer: Impossibility, because the specific person designated to perform the service is no longer available to the company.
The correct answer is A. This scenario is analogous to the death or incapacity of a person essential to performance. The contract specifically required performance by a named individual whose skills were unique. When that person becomes unavailable through no fault of the party seeking discharge (here, the French company), performance becomes objectively impossible. The company cannot force the cooper to work for them. B is less accurate; the core issue is the absolute inability to provide the specified performance, which is impossibility, not just a matter of increased difficulty or cost. C is incorrect as the purpose is not frustrated; performance itself is impossible. D is incorrect because while a company is generally responsible for its employees, it cannot be held in breach for being unable to perform an act that has become truly impossible due to the departure of a unique, named service provider.
- If the shipping company refuses to transport the ore via the longer route at the contract price, and the mining corporation sues, what is the shipping company's best defense? Select one.
Answer: Impracticability, because the alternative route is so much longer and more expensive as to alter the essential nature of the performance.
The correct answer is B. This is a classic impracticability case. While performance (transporting the ore) is not literally impossible, the prescribed method of performance has become impossible, and the only alternative is so fundamentally different and more expensive (40% cost increase) that it rises to the level of commercial impracticability. The closure of the canal was a supervening event, the non-occurrence of which was a basic assumption of the contract. A is incorrect because transport is still possible, just much more burdensome. C is incorrect because the purpose of the contract (transporting ore) is not frustrated; it is the means of performance that has become impracticable. D is incorrect because a 40% cost increase, coupled with a fundamental change in the route, is significantly more than a 'mere' increase in cost and is sufficient to support an impracticability defense.
- If the patient sues the surgeon for the return of the $40,000 fee, what is the likely result? Select one.
Answer: The patient will win, because even if the contract was discharged by impossibility, the patient is entitled to restitution for the benefit conferred on the surgeon.
The correct answer is C. The surgeon's duty to perform is discharged by impossibility due to her permanent incapacity. However, discharge of a contract does not eliminate the right to restitution. A party who has rendered part performance or paid a deposit before the discharge is entitled to recover the value of the benefit conferred on the other party to prevent unjust enrichment. Here, the surgeon has been paid but has not performed, so the patient is entitled to a refund of the $40,000. A is incorrect because the duty to make restitution is not discharged. B is incorrect because a 'non-refundable' clause is typically unenforceable when performance becomes impossible through no fault of the paying party. D is incorrect because the surgeon's incapacity is an excuse for non-performance, not a breach.
- Will the battery company succeed in its claim that its duty to perform is discharged? Select one.
Answer: No, because market fluctuations, even if extreme, are a risk allocated to the parties in a fixed-price contract.
The correct answer is C. The core purpose of a fixed-price contract is to allocate the risk of market fluctuations. One party bets the price will go up (the buyer), and the other bets it will go down (the seller). A change in the market price, even a dramatic one, that simply makes the contract a bad deal for one party is not a basis for an impracticability defense. It is the very risk the parties contracted to allocate. A and B are incorrect for this reason. D is incorrect as a general statement; while rare, a buyer's duty to pay could theoretically be discharged (e.g., if a new law makes payment illegal), but not because of market changes.
- What is the owner's best argument against the buyer's suit? Select one.
Answer: The owner has no valid defense based on impossibility, impracticability, or frustration of purpose.
The correct answer is D. The doctrines of impossibility, impracticability, and frustration of purpose require an external, supervening event that was not the fault of the party seeking discharge. A party's own financial inability to perform is considered subjective impossibility, which is not a valid defense. The event must make performance objectively impossible or impracticable. B and C are incorrect for the same reason; the owner's personal financial hardship, while unfortunate, does not constitute legal impracticability or frustration of the contract's central purpose from a legal standpoint. The purpose of the contract is the sale of the business, which is still possible. A and B are incorrect because financial difficulty, even if severe, does not excuse performance under these doctrines.
- The research institute sues the ship owner for breach. Which doctrine provides the owner with the strongest, though not necessarily successful, defense? Select one.
Answer: The ship owner has no defense because the non-performance was caused by the voluntary acts of its employees.
The correct answer is D. While the departure of the crew makes performance very difficult, the defenses of impossibility and impracticability generally do not apply when the supervening event is caused by or related to the party's own employees or agents. The ship owner assumed the business risk of retaining its essential crew. A is incorrect because the unavailability is due to the owner's own employment situation, not an external event like death or illness. This is closer to subjective impossibility. C is incorrect for the same reason. B is incorrect because frustration applies to the value of the other party's performance, not one's own. The owner bore the risk of its crew resigning, and this failure to perform is a breach.
- In the hotel's suit against the supplier, what is the supplier's best defense? Select one.
Answer: The supplier has no defense if the contract did not specify that the towels had to be made at that particular factory.
The correct answer is C. Unless the contract specifies that the goods must be produced at a particular location, the destruction of a seller's factory is generally not a defense. The seller's duty is to provide the goods, and if its own factory is destroyed, it is expected to arrange for performance by other means (e.g., outsourcing to another manufacturer). This is a form of subjective impossibility. A and B fail for this reason. D is also incorrect because while a fire caused by lightning is an 'Act of God,' it does not discharge the duty to supply non-unique goods unless the contract identified that specific factory as the sole source of production.
- Is the gallery's duty to deliver the sculpture discharged? Select one.
Answer: Yes, because the destruction of the unique subject matter of the contract rendered performance impossible.
The correct answer is A. The doctrine of impossibility discharges a contractual duty when the specific subject matter of the contract is destroyed or ceases to exist without the fault of the party seeking discharge. Here, the contract was for a specific, unique sculpture. Its destruction makes performance objectively impossible. The gallery was not negligent, so the destruction was not its fault. B is incorrect because under UCC § 2-613, if goods identified when the contract is made are destroyed without fault of either party before the risk of loss passes, the contract is avoided. The gallery, as a merchant, would typically bear the risk of loss, but this rule provides for discharge in cases of casualty to identified goods. C is incorrect as there is no such rule of strict liability. D is incorrect because impossibility is the more direct and appropriate defense when the subject matter is destroyed.
- What is the promoter's best defense to the violinist's claim? Select one.
Answer: Impossibility, because the specific subject matter of the contract, the concert hall, was destroyed without fault of the promoter.
The correct answer is A. The doctrine of impossibility discharges contractual duties when performance has been rendered objectively impossible by a supervening event, the non-occurrence of which was a basic assumption of the contract, and the party seeking discharge was not at fault. Here, the destruction of the unique concert hall, which was essential to the performance, makes the promoter's duty to provide the venue for the concert objectively impossible. B is incorrect because while securing another venue might be impracticable, the stronger and more direct defense is that the specific, named subject matter of the contract was destroyed, rendering performance impossible. C is incorrect because frustration of purpose applies when performance is still possible but has become valueless to one party. Here, the promoter's core performance—providing the specified venue—is itself impossible. D is incorrect because anticipatory repudiation is a breach of contract, not a defense to it.
- Is the corporation's duty to pay rent discharged by the doctrine of frustration of purpose? Select one.
Answer: No, because the risk of new construction in a city is a foreseeable event that the corporation implicitly assumed.
The correct answer is D. For frustration of purpose to apply, the non-occurrence of the frustrating event must have been a basic assumption on which the contract was made. The risk of new construction in a dense urban environment is generally considered foreseeable. Therefore, a party leasing property typically assumes the risk that views may be obstructed in the future unless the lease specifically protects against it. C is also a strong argument, as one could argue that having an office to conduct business was the primary purpose and impressing clients with a view was merely an ancillary benefit. However, D provides a more definitive reason for the defense to fail: the foreseeability of the event places the risk on the lessee.
- What is the contractor's best defense for its inability to complete the project by August 1 at the original price? Select one.
Answer: Impracticability, because the supervening government regulation made timely performance and performance at the original cost impracticable.
The correct answer is C. A supervening government regulation that does not make performance illegal but makes it significantly more difficult or expensive can support a defense of impracticability. The new sprinkler requirement makes the original timeline and budget impracticable. B is incorrect because it is not impossible to build the library; it is just more expensive and time-consuming due to the new legal requirement. The original design can be modified to comply. A is incorrect because the purpose of the contract (building a library) is not frustrated. D is incorrect because the change in law provides a valid defense, at least regarding the delay and increased cost.
- Which of the following provides the tech company with a complete defense to the lawsuit? Select one.
Answer: The expert's death or incapacity rendered performance of a personal services contract impossible.
The correct answer is A. The death or incapacity of a person necessary to perform a personal services contract renders the performance impossible and discharges the contract. The contract was with a specific, world-renowned expert whose unique skills were essential. The expert's long-term coma makes it objectively impossible for him to perform. B is incorrect because while the situation creates practical difficulties for the company, the more precise legal doctrine is impossibility due to the personal nature of the services. C is incorrect for a similar reason; while the purpose is frustrated, the direct cause is the impossibility of the expert's performance. D is incorrect because anticipatory repudiation requires a voluntary act or statement indicating an intent not to perform, not an involuntary incapacity.
- If the landowner sues the construction company for breach for failing to complete the home with the specified marble, which doctrine provides the company its strongest defense? Select one.
Answer: Impracticability, because a supervening event has made performance extraordinarily more expensive, and the non-occurrence of the event was a basic assumption of the contract.
The correct answer is B. Commercial impracticability discharges performance when a supervening event, the non-occurrence of which was a basic assumption of the contract, makes performance extremely and unreasonably difficult or expensive. The coup and export ban were unforeseen, and the resulting $750,000 cost increase makes performance far more burdensome than anticipated. A is incorrect because performance (building the house) is not objectively impossible; a substitute marble could be used. The issue is the extreme cost, which is the hallmark of impracticability. C is incorrect because this doctrine would be a defense for the landowner, not the construction company, and it is not the best fit as the house can still be built. D is incorrect because mistake applies to an erroneous belief about facts existing at the time the contract was formed, not to subsequent events.
- What is the vendor's best defense against the city's claim? Select one.
Answer: Frustration of purpose, because the principal purpose of the lease was substantially frustrated by an event the non-occurrence of which was a basic assumption.
The correct answer is C. Frustration of purpose occurs when a supervening event, not the fault of the party seeking discharge, destroys the essential purpose of the contract for that party. The non-occurrence of the event must have been a basic assumption of the contract. Here, the sole purpose of the lease, explicitly stated, was to sell memorabilia for the race. Rerouting the race finish line completely destroyed this purpose, even though it was still possible for the vendor to occupy the kiosk and pay rent. A is incorrect because performance (paying rent) is not impossible. B is incorrect because while operating would cause a loss, the core issue isn't the difficulty of performance but its pointlessness, which is frustration. D is incorrect because there is no indication the city agreed to rescind the contract.
- Will the farmer's defense of impossibility or impracticability succeed? Select one.
Answer: No, because the contract was for generic goods and the farmer could have obtained the corn from another source.
The correct answer is C. When a contract is for the sale of generic goods (like 'Grade A corn') rather than the output of a specific piece of land, the seller's duty is not discharged if their personal supply is destroyed. The seller is expected to cover by purchasing conforming goods on the market to fulfill the contract. The destruction of the farmer's specific crop only makes his intended method of performance impossible (subjective impossibility), not the performance itself (objective impossibility). A is therefore incorrect. B is incorrect because a 20% price increase is generally not considered extreme enough to rise to the level of commercial impracticability. D is plausible but C is the more direct reason for the failure of the defense; the nature of the goods contracted for is the key issue, not the absence of a specific clause.
- What is the utility company's strongest defense? Select one.
Answer: Impracticability, because the unforeseen bedrock makes performance at the contract price nearly ten times more expensive.
The correct answer is B. The doctrine of impracticability applies when performance is possible but becomes extremely and unreasonably expensive due to an unforeseen event, the non-occurrence of which was a basic assumption. Discovering the granite bedrock, which increases the cost nearly tenfold, is a classic example of such an event. A is a plausible alternative, as this could also be analyzed as a mutual mistake about a basic assumption of fact existing at the time of the contract. However, when the issue is the extreme cost of performance due to the discovery, impracticability is the more commonly applied and direct defense. C is incorrect because performance is not impossible, just extremely costly. D is incorrect because frustration applies when the value of the other party's performance is destroyed, not when one's own performance becomes more expensive.
