[Ninja20]

Can some one please explain why this cant be 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.

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.

Incorrect 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.

. The correct answer is A.

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.

[Meeekks]

Seems like one of those questions that's hard to decipher.

It says Alpha's obligation (to purchase the parcel) are subject (dependent upon) the parcel being rezoned by that date. In other words, Alpha is only obliged to buy that parcel if it is rezoned by that date. So if it's worded like that, A would be the correct answer. B would be in breach of contract because Alpha has an obligation if it is rezoned.

I hope my explanation is right. Not doing too hot in REG. 🙁

[Author]

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