Here is another one. Why A is better answer than B?
On June 15, 20X1, Alpha, Inc., contracted with Delta Manufacturing, Inc., to buy a vacant parcel of land Delta owned. Alpha intended to build a distribution warehouse on the land because of its location near a major highway. The contract stated that “Alpha's obligations hereunder are subject to the vacant parcel being rezoned to a commercial zoning classification by July 31, 20X2.†Which of the following statements is correct?
A.
If the parcel is not rezoned by July 31, and Alpha refuses to purchase it, Alpha would not be in breach of contract.
Incorrect B.
If the parcel is rezoned by July 31, and Alpha refuses to purchase it, Delta would be able to successfully sue Alpha for specific performance.
C.
The contract is not binding on either party because Alpha's performance is conditional.
D.
If the parcel is rezoned by July 31, and Delta refuses to sell it, Delta's breach would not discharge Alpha's obligation to tender payment.
Explanation:
If the parcel is not rezoned by July 31 and Alpha refuses to purchase it, Alpha would not be in breach of contract. The contract contains a contingent clause. That clause indicates that Alpha will not be obligated to purchase the property if it is not rezoned to a commercial zoning classification
Definition of Specific Performance:
Specific performance is an equitable remedy that forces performance of the act specified in the contract when no adequate remedy at law exists, i.e., when money damages will not make the injured party whole. It is very rare and will be used only when the goods specified in the contract are unique (e.g., real property, original art, controlling interest in a business) or when circumstances inhibit the ability to cover (to procure substitute goods in the open market).
FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84
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