Question

Max Tax Service offers to do Rebecca's home business taxes for $5,000. By midnight on April 15th (the day taxes are due to be filed with the government), Max has only completed half of her tax return. Which of the following will the court most likely decide?

a.This is a material breach but Rebecca must still pay $2,500 to Max.
b.This is substantial performance. Rebecca must pay $2,500 to Max.
c.This is a material breach. Rebecca doesn't have to pay Max anything.
d.This is substantial performance. Rebecca must allow Max to finish her taxes.

Answer 1

The court is likely to determine that Max Tax Service committing a material breach by only completing half of Rebecca's taxes by the due date, which potentially absolves Rebecca from the obligation to pay for the incomplete service.

Step-by-step explanation:

When evaluating whether Max Tax Service's failure to complete Rebecca's tax return is a material breach, it's crucial to understand the nature of the contract and the consequences of the unfinished work. A material breach occurs when the failure to perform a contract is so substantial that it defeats the purpose of the agreement, giving the non-breaching party the right to terminate the contract and sue for damages. In this case, completing only half of Rebecca's home business taxes could be considered a material breach because the service is not fully provided by the critical deadline. Therefore, the court will most likely decide that this is a material breach, as the taxes were not fully prepared by the due date of April 15th, and Rebecca may not be obligated to pay Max anything.