Derwoodand Lincoln reach an agreement. According to the terms of the agreement, on Lincoln's birthday,Derwoodpromises to cook a meal forLincoln, andLincolnpromises to giveDerwood$35.

On Lincoln's birthday,Lincolnarrives atDerwood's house with $35 in cash. He passes it toDerwood.Derwood, however,refuses to accept the money and refuses to cook a meal.

Which statement is the most accurate description of the current status of the contract?

1.Lincoln has not yet performed his duties under the contract.

Derwood's refusal to perform is excused by Lincoln's failure to actually deliver.

2.It's not clear whether Lincoln has performed his duties under the contract, subject to satisfaction of a contracting party, as he was unable to actually deliver the money into Derwood's hands.

Derwood's refusal to perform under the contract, however, may not be excused by the other party's failure to perform.

3.Lincoln has tendered performance and has therefore discharged his performance under the contract.

Derwood has refused to perform and is in material breach of the contract.

4.Lincoln has substantially performed his duties under the contract so he has discharged his performance under the contract.

Derwood's refusal to perform will become a material breach as soon as Lincoln is able to actually deliver the $35.