Contract Law - How Contracts End

Contract Law -

How Contracts End

​By the end of this lesson students will have an understanding of how contracts come to an end.

Contracts are Discharged by:

1. Performance - when both parties fulfill terms of contract

2. Agreement - contract is terminated by mutual agreement

3. Impossibility of Performance - contract is legally impossible to fulfill (death, destruction, becomes illegal)

4. Operation of the Law​ - wrongful act discharges contract (wrongful alteration, statute of limitations, bankruptcy)

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NOTE: If the contract is still valid and active - it has not yet been discharged 

Multiple Choice

Jake agreed to sell his truck to Matt for $20,000. Jake wrecks the truck the day before Matt receives it. How is the contract discharged?

• Discharge by Performance

• Discharge by Agreement

• Discharge by Impossibility of Performance

• Discharge by Operation of the Law

• The contract is still valid and active; it has not yet been discharged

Multiple Choice

Tim agreed to sell his home to the Jones family for $150,000 on February 1, 2022. The two parties have agreed upon a closing date of July 1, 2022. How is the contract discharged?

• Discharge by Performance

• Discharge by Agreement

• Discharge by Impossibility of Performance

• Discharge by Operation of the Law

• The contract is still valid and active; it has not yet been discharged

Multiple Choice

Jack borrows $1000 from Bobbi and agrees to repay in one year. Bobbi doesn't receive payment from Jack after one year has passed. 8 years later, Bobbi decides she wants her money back and wants to sue Jack. She learns that the statute of limitations is four years and she is unable to sue. How is the contract discharged?

• Discharge by Performance

• Discharge by Agreement

• Discharge by Impossibility of Performance

• Discharge by Operation of the Law

• The contract is still valid and active; it has not yet been discharged

Multiple Choice

Katie pays $200 to the catering company for food for her graduation party. The caterer delivers the food as agreed upon. How is the contract discharged?

• Discharge by Performance

• Discharge by Agreement

• Discharge by Impossibility of Performance

• Discharge by Operation of the Law

• he contract is still valid and active; it has not yet been discharged

Multiple Choice

Beckett agrees in writing to purchase a tv from Sara for $50. When he goes to exchange money for the tv he discovers the contract price has been changed to $150 and refuses to pay. How is the contract discharged?

• Discharge by Performance

• Discharge by Agreement

• Discharge by Impossibility of Performance

• Discharge by Operation of the Law

• The contract is still valid and active; it has not yet been discharged

Multiple Choice

Zach agrees to repair damages to the Smith house sustained in the derecho. 18 months later the work has still not been completed and the Smiths ask Zach when he will get the work done. Zach states it will be another 12 months before he can begin. Zach and the Smiths agree to terminate their agreement. How is the contract discharged?

• Discharge by Performance

• Discharge by Agreement

• Discharge by Impossibility of Performance

• Discharge by Operation of the Law

• The contract is still valid and active; it has not yet been discharged

Multiple Choice

On May 1, 2022, Kate and her three best friends sign a one-year lease agreement for an apartment in Iowa City beginning on August 1, 2022. How is the contract discharged?

• Discharge by Performance

• Discharge by Agreement

• Discharge by Impossibility of Performance

• Discharge by Operation of the Law

• The contract is still valid and active; it has not yet been discharged

Multiple Choice

Clark hires Jasper to build a website for his business and pays him $500 to do so. It turns out that Jasper is inexperienced and the website doesn't work. How is the contract discharged?

• Discharge by Performance

• Discharge by Agreement

• Discharge by Impossibility of Performance

• Discharge by Operation of the Law

• The contract is still valid and active; it has not yet been discharged