Crucial Exams

Multistate Bar Examination Practice Question

A contractor entered into a contract with a homeowner to renovate the homeowner's property for $50,000. Before work began, both parties decided to replace the original contract with a new agreement under which the contractor would build a guest house on the property for $60,000 instead of performing the renovation. The contractor later refused to construct the guest house. Under these facts, what is the BEST explanation of the legal effect of the new agreement?

  • The original contract was discharged because the new agreement constituted a valid substituted contract.

  • The original contract remains in effect because the new agreement was only a modification of the terms.

  • The original agreement was not discharged because there was no accord and satisfaction.

  • The original contract was discharged because the parties mutually rescinded it without replacing it.

Multistate Bar Examination
Contracts
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