First Principles of Business Law
Performance and breach of contract

4. Establishing a breach of contract

4.10. The effect of a breach on contractual obligations

 

 

 

Read the facts and the question and then choose the best answer.

A agrees to sell her LCD TV and DVD player to her friend B for $1,000. She hands over the two machines and B promises to pay her at the end of the same week at the very latest. But B fails to pay any of the promised money to A.

Is it true to say that, because B has failed to perform her obligation to pay, there is no longer a contract and A can get the LCD TV and DVD player back?

(a) Yes, because if B can't pay, the contract comes to an end and A can get back the things she sold to B.

(b) No. B's failure to pay is a breach of contract but she remains legally bound by her promise, which can be enforced in the courts.

 

 

 

 

 

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