Ellis Agreed to Paint Lee's House for a Price of $1,500

question 135

Multiple Choice

Ellis agreed to paint Lee's house for a price of $1,500. A month before the performance was due, Lee called and told Ellis that she had changed her mind and was going to have her house restuccoed instead. Ellis insisted that they had a contract and that he was going to paint the house anyway. Lee repeated that she was not going to go through with it, but Ellis insisted the contract was still on. Before further steps could be taken by either party, Lee's house was destroyed by a freak airplane accident. Which one of the following statements describes the law applicable to these facts?

• A) Lee could have accepted Ellis's conduct as an anticipatory breach.
• B) Ellis's conduct amounted to repudiation, and Lee could have sued for breach of contract immediately after the phone call.
• C) The contract has been discharged by frustration.
• D) Lee's conduct did not amount to a breach since she told him a month before performance was due that she didn't want the house painted.
• E) Ellis will be able to successfully claim as damages the amount that he would have made if the contract had been performed.

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Definitions:

Extinguishing

The act of putting an end to something, such as extinguishing a debt, a legal obligation, or a fire.

Dissolution

Dissolution is the process of formally ending the existence of a legal entity such as a company or partnership.

Winding Up

The process of dissolving a company by selling its assets, paying off creditors, and distributing the remaining assets to shareholders.

Liquidation

The process of closing a business and distributing its assets to claimants.