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Performance Task (Preliminary)

The document discusses various contract and fraud scenarios involving the sale and delivery of goods. It analyzes whether parties have fulfilled their obligations or committed breach of contract or fraud. Remedies are also examined, such as specific performance, damages, and rescission of agreements due to fraudulent actions.

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26 views

Performance Task (Preliminary)

The document discusses various contract and fraud scenarios involving the sale and delivery of goods. It analyzes whether parties have fulfilled their obligations or committed breach of contract or fraud. Remedies are also examined, such as specific performance, damages, and rescission of agreements due to fraudulent actions.

Uploaded by

007.ellaaaaaaa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Business Law (Obligations and Contracts)

Performance Task
1. S sold to B a specific SUV which S agreed to deliver no later than July 31, 2024. S did not
deliver the SUV on the said date.
a. Is S guilty of legal delay and, therefore, liable for damages? Why or Why not?
S is guilty of legal delay and liable for damages for failing to deliver the SUV to B by the
agreed upon date of July 31, 2024. When a seller agrees to deliver goods by a certain date
and fails to do so, this constitutes a breach of contract. The delivery date was a material term
of the sales agreement between S and B. By not delivering the SUV by July 31st, S did not
uphold their end of the contract and is now liable for any damages that B faced due to not
receiving the SUV on time. The law provides that B can recover damages from S for this
delay.

b. If demand is made upon S by B on August 5, 2024, and S fails to deliver the SUV,
when is S considered to be in default?
S would be considered in default beginning on August 6, 2024 if demand was made by B
for the SUV on August 5th and S still failed to deliver. When B made a demand on August
5th for S to deliver the SUV per their original agreement, this put S on notice that they
needed to promptly deliver to avoid defaulting. S would have a reasonable time period to
fulfill this new demand made by B. Assuming one day is a reasonable time period for S to
respond to the demand, then if S still did not deliver the SUV on August 6th, they would be
considered in default at that point. The original breach of contract occurred on July 31st
when S failed to meet the initial delivery date. But S would not be in full default until failing
to deliver within a reasonable time after B's subsequent demand.

c. If an action for specific performance is filed by B on August 10, 2024, when does the
payment of damages for the default commence?

If B files an action for specific performance against S on August 10, 2024, the payment
of damages would commence from the date that S originally defaulted by failing to deliver
the SUV. Even though the legal action was not filed until August 10th, the damages began
accruing on August 6th when S failed to deliver the SUV within a reasonable time after B's
demand. The damages start from the initial date of default, not the date the lawsuit is filed.
So in this case, B could claim damages starting from August 6, 2024 onwards until S delivers
the SUV. The filing of the lawsuit on August 10th does not impact or reset the timeline for
when damages commenced. The damages began on the default date and would continue
accumulating until S cures the default by delivering the SUV to B.

d. What is the effect of the absence of evidence as to such extrajudicial demand?


The absence of evidence of an extrajudicial demand by B would have the effect of delaying
the date that S is considered in default. Without evidence that B made a demand for S to deliver
the SUV after the initial breach, there is no clear date for when S should have reasonably
delivered the SUV to avoid default. Since there was no subsequent demand made after July 31st,
S would not be considered fully in default until B took legal action by filing the lawsuit on
August 10, 2024. Without the extrajudicial demand, the court has no basis to find S was in
default earlier than the filing of the lawsuit. The lack of evidence of a demand means damages
would only accumulate starting August 10th rather than from the earlier August 6th date. Thus,
the absence of evidence of B's extrajudicial demand limits the period that B can claim damages
for S's default.
2. S promised to deliver a female horse named Jane to B on January 28, 2025. Jane gave
birth to a colt on January 25, 2025.
a. What are S's obligations?
S is still obligated to deliver the female horse named Jane to B by the agreed upon date of
January 28, 2025, despite Jane giving birth to a colt on January 25th. The sales agreement
between S and B was for delivery of the specifically named female horse Jane. The fact that Jane
subsequently gave birth does not change what was promised in the original contract. Unless the
contract provided otherwise, the birth of the colt does not discharge S's duty to deliver Jane. S is
not suddenly obligated to deliver both Jane and the colt, since B only contracted for Jane. The
colt was not part of their sales agreement. Therefore, S must still deliver the female horse Jane to
B by January 28, 2025 to fulfill their contractual obligations. The birth of Jane's colt does not
alter the terms or discharge the duty owed by S to B.
b. Who has the right to the colt? Why?
S has the right to the colt because ownership of the mother animal generally includes
ownership of her offspring. When an animal gives birth, the owner of the mother at the time of
birth is the owner of the offspring as well. Since S was still the owner of Jane when she gave
birth to the colt on January 25th, S has the right to ownership of the colt. The sales contract was
only for Jane herself, not any future offspring. So the colt would not be included in the sale to B.
Unless expressly agreed otherwise, the ownership rights over Jane's offspring remain with S.
Therefore, S maintains the right to the colt born to Jane while still in S's possession, even though
Jane was promised to B in the future. The colt is S's property and is not part of the sale.
3. S obliged himself to deliver 50 bottles of wine to B of a particular brand. Subsequently, S
delivered 50 bottles of wine, knowing they were of the cheaper variant.
a. What kind of fraud was committed by S, and what is B's remedy?
S committed fraud of substitution when he delivered 50 bottles of a cheaper wine variant,
knowing it was different than the particular brand promised to B. When a seller is aware they are
delivering goods that do not conform to the sales agreement, substituting inferior or different
goods constitutes fraud. Since S knowingly provided a cheaper substitute instead of the specific
wine brand in their contract with B, this is fraudulent substitution. B's remedy is to reject the
cheaper bottles and demand delivery of the specified wine brand per their agreement. If S still
fails to deliver the proper wine, B can rescind the contract and recover damages from S for his
fraudulent actions. B is also entitled to keep the cheaper wine bottles as partial compensation
while awaiting full performance by S. Overall, S's intentional delivery of inferior substitution
goods was a fraudulent act, entitling B to reject the shipment and sue for damages if S does not
cure the breach.
b. If B bought the 50 bottles of wine on the false representation of S that the wine is as
represented by the labels, what kind of fraud was committed by S, and what is B's
remedy?
If S falsely represented to B that the 50 bottles of wine were the brand indicated on the
labels, when in fact they were an inferior and cheaper variant, this would constitute fraudulent
misrepresentation. S made false statements about the quality and branding of the wine, inducing
B to purchase the bottles based on deception rather than delivering what was promised. When a
seller makes intentional false claims about goods to persuade the buyer's consent, this is
fraudulent misrepresentation. B's remedy is to reject the fraudulent wine shipment, notify S of
rescission of the contract, and demand a full refund of the purchase price. B may also sue S for
damages caused by the fraudulent misrepresentation. Even if S believed the false statements
about the wine were true, it is still considered fraudulent misrepresentation. B gave consent
under the false impression created by S's misrepresentations. Therefore, B is entitled to rescind
the agreement and recover damages due to S’s fraudulent inducement if S does not refund B.

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