Helix BBQ: Contract Law-Performance, Breach, and Discharge - Discharge of Duties with Explanations

Which of the following best characterizes a mutual rescission?

A. It involves an agreement to surrender rights and terminate all obligations.

Solution: The correct answer is A.

Answer option A is correct. A mutual rescission is an agreement by all parties to surrender their rights and terminate their contractual obligations.

At what point does an accord extinguish an earlier obligation?

A.Once performance under the accord is fully performed.

Solution: The correct answer is A.

Answer option A is correct. An accord discharges the prior obligation when its duties have been performed.

Which of the following issues would be most important in evaluating whether frustration of purpose, impossibility, or impracticability might discharge a party’s contractual obligation?

C.Whether one of the parties accepted the risk of the unexpected event.

Solution: The correct answer is C.

Answer option C is correct. If the contract language or circumstances indicate that the parties contemplated the risk and allocated it to the party seeking discharge, that will serve as a defense to discharge.

Which type of party is most likely to use frustration of purpose as a defense?

C.Buyers.

Solution: The correct answer is C.

Answer option C is correct. Ordinarily, it is buyers who rely on the doctrine of frustration of purpose.

Under the UCC, when (if ever) can increased expenses discharge a party’s contractual obligations based on impracticability?

C.When the increase was caused by an unforeseen contingency altering the essential nature of the performance.

Solution: The correct answer is C.

Answer option C is correct. Under the UCC standard of commercial impracticability, an increase in the cost of performance will discharge a party’s duty only if the cost is due to an unforeseen contingency that alters the essential nature of the performance.