ACCT 202 Study Guide - Summer 2018, Comprehensive Midterm Notes - Portable Document Format, Common Law, Canada
12 Oct 2018
School
Department
Course
Professor
ACCT 202
MIDTERM EXAM
STUDY GUIDE
Fall 2018
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Chapter 13: Performance of Contractual Obligations (Pages 227-240; PDF 260-273)
Chapter Objectives
• Eplai the sigifiae ad effet of tede.
• Reogize ho a otat a e dishaged othe tha pefoae.
• Eplai the sigifiae ad effect of a condition precedent.
• Reogize ad eplai the effet of a fustated otat
THE NATURE AND EXTENT OF PERFORMANCE
A contract that contains all of the essential requirements for a binding agreement, and that does not
contain an element enabling a party to avoid the agreement, must be performed by the parties in
accordance with its terms. Anything less than complete compliance with the promise would render the
party in default liable for breach of the contract and the agreement remains in effect until the promise is
fulfilled or the agreement is discharged in some other way
• Whether the performance is complete or not must be determined by comparing the promise
made with the act performed.
• When the performance of the promises of the parties is complete it’s discharged.
Tender: The act of offering to perform the promise by act of performing the contract or the offer of
payment of money due under a contract.
Figure 13.1: Obilgation links to both forms of tender (performand and payement)
Tender of Payment
performance is made when payment is offered to the seller at the required time and place fixed for
delivery under the contract. If the form of payment is not specified, then currency, or legal tender,
must be offered to the seller.
• Legal tender may not be refused when offered in payment, providing that it is the exact amount
required
• Once a proper tender of payment is made, interest ceases to run on the debt. While the debtor is not
free of the obligation to pay, the debtor need only hold the amount of the debt until the creditor
later demands payment, then pay over the money courts will penalize the creditor with costs for
causing the unnecessary litigation or action if the creditor t’s to seize debtors asset or sues debtor.
• Sale of land: When the purchaser is willing to close the transaction and was prepared to pay the
required funds they may bring the action to court if the deed to the land is not given to them and
they met up with seller on specified date to close the trans. in payment.
Tender of Performance of an Act
The seller performance is by tender of performance of act
Sale of goods: if the seller is prepared to deliver goods at set time of agreement and specifications of the
agreement and the buyer refuses to take good they are not required to deliver the goods again and the
can institute legal proceedings against the buyer for breach of the contract.
Contract concerning land: equitable remedy of specific performance may be available to the seller by
showing that they were prepared and attempted to deliver the title documents for the property to the
unwilling purchaser on set date as required under the agreement. Unless the purchaser has
lawful/legitimate reason for unwillingness the courts will order them to pay funds or accept the land
under breach of contract
• If A covenants or engages by contract to buy an estate of B, at a given price, although that contract
may be silent as to any obligation on the part of B to sell, yet as A cannot buy without B selling, the
law will imply a corresponding obligation on the part of B to sell
Breach of contract: The failure to perform a contract in accordance with its term it has the effect of
discharging the injured party from any further performance under the agreement
DISCHARGE BY MEANS OTHER THAN PERFORMANCE
find more resources at oneclass.com
find more resources at oneclass.com
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Ways to terminate a
contract:
• Law may operate to
terminate contract
• Set in contract: Parties
may by mutual agreement
terminate contract before
its performed if the contract
allows for it or in the case of
subsequent events
• Replace with Substitute
of contract: the parties may
make alterations to contact
or accord and satisfaction
i.e. the seller offers buyer
different goods in
satisfaction of the promise
and buyer accepts and takes
it instead the goods originally requested.
Termination as a Right
• Termination is a way of discharging the contract usually with a time limit notice and once it
expires the contracts ends. The right to terminate may allow a party to terminate the
agreement without liability for any loss suffered by the other. If not the agreement with
notice or option to terminate may subject them to compensate suffering of the party who
has partly performed.
External Events
Express term: Discharge by the occurrence of an event specified in the contract.
• Condition subsequent: A condition that alters the rights or duties of the parties to a contract,
or that may have the effect of terminating the contract if it should occur.
o Force majeure: A major, unforeseen, or unanticipated event that occurs and prevents
the performance of a contract. In roman law its seen as Act of God: An unanticipated
event that prevents the performance of a contract or causes damage to property.
(such as war, insurrection, or natural disasters), ut if it’s i the otat it a ot
be discharged.
• Implied term: Discharge by the occurrence of an event that by custom of the trade would
normally result in exemption from liability. Eg if package is lost or damage by an act of God
ad ats the hae o otol oe the o’t e liale, ut it does’t eept the fo
delivery if its partial damage. If the pakage is destutie the’d e padoed fo shipet
and if mislabelled by shipper they may take action against them for damages
Implied Terms and the Doctrine of Frustration
o Frustrated contract: A contract under which performance by a party is rendered
impossible due to an unexpected or unforeseen change in circumstances affecting
the agreement.
o the Sale of Goods Act in most provinces provides that the destruction of specific
goods, through no fault of parties, before the title to the goods passes to the buyer
will void the contract (codification of implied term)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Chapter 13: performance of contractual obligations (pages 227-240; pdf 260-273) Chapter objectives: e(cid:454)plai(cid:374) the sig(cid:374)ifi(cid:272)a(cid:374)(cid:272)e a(cid:374)d effe(cid:272)t of te(cid:374)de(cid:396), re(cid:272)og(cid:374)ize ho(cid:449) a (cid:272)o(cid:374)t(cid:396)a(cid:272)t (cid:373)a(cid:455) (cid:271)e dis(cid:272)ha(cid:396)ged othe(cid:396) tha(cid:374) (cid:271)(cid:455) pe(cid:396)fo(cid:396)(cid:373)a(cid:374)(cid:272)e, e(cid:454)plai(cid:374) the sig(cid:374)ifi(cid:272)a(cid:374)(cid:272)e a(cid:374)d effect of a condition precedent, re(cid:272)og(cid:374)ize a(cid:374)d e(cid:454)plai(cid:374) the effe(cid:272)t of a f(cid:396)ust(cid:396)ated (cid:272)o(cid:374)t(cid:396)a(cid:272)t. A contract that contains all of the essential requirements for a binding agreement, and that does not contain an element enabling a party to avoid the agreement, must be performed by the parties in accordance with its terms. Tender: the act of offering to perform the promise by act of performing the contract or the offer of payment of money due under a contract. Figure 13. 1: obilgation links to both forms of tender (performand and payement) Tender of payment performance is made when payment is offered to the seller at the required time and place fixed for delivery under the contract.
