Question

Commercial Construction, Inc. (CCI), contracts to build a store for Rita's Pizza Company with Rita's payment due on June 1. On June 1, Rita's bank is closed, and for this reason, Rita's claims it cannot pay on time. In this situation:a. CCI is in breach of contract.b. Rita's is in breach of contract.c. the contract is discharged.d. the contract is suspended

Answer 1

Answer:

b. Rita's is in breach of contract.

Explanation:

A breach of contract can be described as an act of breaking or not honoring the terms and conditions established in a contract either intentionally or unintentionally.

From the question, Rita's is in breach of contract because it unintentionally broke the terms of paying CCI on June 1 as set out in the contract due to closing by Rita’s bank.

Though closing of Rita’s bank was not caused by Rita’s and unintentional, Rita’s will still be considered have breached the contract for not meeting the terms and conditions on June 1 when the payment to CCI was due.

So, the correct option is b. Rita's is in breach of contract.

Answer 2

Answer:

The correct option is B, Rita's is in breach of contract.

Explanation:

Breach of contract occurs when a party or parties to a legally binding and enforceable agreement refuse to discharge their duties as stipulated in the contract.

Even though Rita's inability to pay as at when due was not intentional as Rita's bank had closed, the onus is still on the company to fulfill its obligation.

It is important that both parties find an amicable way to enforce the terms of the contract or Commercial Construction ,Inc (CCI) tries recover financial damages caused to it by the breach or in an extreme situation, they settle for lawsuit.