Jones entered into a contract with Chan for the purchase of Chan's business. As Jones intended to expand the business and understood that such expansion was contingent on municipal approval to rezone the premises, the contract specified that if the rezoning was not approved, the contract would be terminated and the parties would be placed in their pre-contractual positions. Which of the following is true? The relevant clause is commonly referred to as a novation clause. The relevant condition to the contract is commonly referred to as a frustration clause. Frustration does not apply, as the outside event was anticipated by the parties. The relevant clause is commonly referred to as a force majeure clause. The doctrine of frustration does apply, as the outside event was not reasonably anticipated by the parties.
Jones entered into a contract with Chan for the purchase of Chan's business. As Jones intended to expand the business and understood that such expansion was contingent on municipal approval to rezone the premises, the contract specified that if the rezoning was not approved, the contract would be terminated and the parties would be placed in their pre-contractual positions. Which of the following is true?
The relevant clause is commonly referred to as a novation clause.
The relevant condition to the contract is commonly referred to as a frustration clause.
Frustration does not apply, as the outside event was anticipated by the parties.
The relevant clause is commonly referred to as a force majeure clause.
The doctrine of frustration does apply, as the outside event was not reasonably anticipated by the parties.
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