Question 1

Most contracts are discharged by rescission.

Accepted Answer

A) True 
 B)False  False

Question 2

Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000. Eastside fails to go through with the deal on the agreed date, when the market price of the land is $17,000. If DA cannot recover the land, DA may recover in damages

Accepted Answer

A)  $17,000. 
B)  $15,000. 
C)  $2,000. 
D)  $0. 
A)  $17,000. 
B)  $15,000. 
C)  $2,000. 
D)  $0. C

Question 3

Fact Pattern 12-2 
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1. One month before the term begins, Bell is underbid by a competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire Chris.
-Refer to Fact Pattern 12-2. With respect to Chris's obligations, Bell's repudiation most likely

Accepted Answer

A)  discharges Chris from the contract. 
B)  has no effect on Chris's obligations. 
C)  increases Chris's obligations under the contract. 
D)  suspends Chris's obligation to perform. 
A)  discharges Chris from the contract. 
B)  has no effect on Chris's obligations. 
C)  increases Chris's obligations under the contract. 
D)  suspends Chris's obligation to perform. A

Question 4

Damages compensate a party for harm suffered as a result of another's wrongful act.

Accepted Answer

A) True 
 B)False

Question 5

Damages are designed to punish a breaching party and deter others from similar conduct.

Accepted Answer

A) True 
 B)False

Question 6

Misrepresentation of a material fact is an element of fraud.

Accepted Answer

A) True 
 B)False

Question 7

Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity's shareholders. When Faye's schedule conflicts, she asks Gudren to serve Faye's coffee and pastries at the meeting. This transfer of duties is

Accepted Answer

A)  a delegation. 
B)  an assignment. 
C)  a third party beneficiary contract. 
D)  prohibited under the doctrine of privity of contract. 
A)  a delegation. 
B)  an assignment. 
C)  a third party beneficiary contract. 
D)  prohibited under the doctrine of privity of contract.

Question 8

A contract entered into under undue influence is voidable.

Accepted Answer

A) True 
 B)False

Question 9

An event must be certain to occur to constitute a contractual condition.

Accepted Answer

A) True 
 B)False

Question 10

On a breach of contract, compensatory damages compensate the nonbreaching party for the loss of a bargain.

Accepted Answer

A) True 
 B)False

Question 11

Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment. When Ira sends her the rest of the price, Jane refuses to ship Ira the collection. Ira should seek

Accepted Answer

A)  damages. 
B)  reformation. 
C)  rescission. 
D)  specific performance. 
A)  damages. 
B)  reformation. 
C)  rescission. 
D)  specific performance.

Question 12

Fact Pattern 12-1 
Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up! Restaurant. BRI completes most of the work promised in the contract.
-Refer to Fact Pattern 12-1. Casual Dining is entitled to

Accepted Answer

A)  damages. 
B)  nothing. 
C)  reformation. 
D)  specific performance. 
A)  damages. 
B)  nothing. 
C)  reformation. 
D)  specific performance.

Question 13

Erté holds 1,000 pounds of perishable fruit in storage for Fresh Stuff Corporation. Fresh Stuff does not pay for the storage. Erté sells the fruit to Green Grocers, Inc. This sale represents café

Accepted Answer

A)  a breach of contract. 
B)  a mitigation of damages. 
C)  rescission and restitution. 
D)  specific performance. 
A)  a breach of contract. 
B)  a mitigation of damages. 
C)  rescission and restitution. 
D)  specific performance.

Question 14

Jahna and Ike contract for the sale of Jahna's horse for $1,000. Unknown to either party, the horse has died. Ike is

Accepted Answer

A)  entitled to another horse of equivalent value. 
B)  not required to pay due to the mutual mistake. 
C)  not required to pay due to the unilateral mistake. 
D)  required to pay because he assumed the risk the horse might die. 
A)  entitled to another horse of equivalent value. 
B)  not required to pay due to the mutual mistake. 
C)  not required to pay due to the unilateral mistake. 
D)  required to pay because he assumed the risk the horse might die.

Question 15

Gina induces Hu to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents a number of material features. When Hu discovers the truth, Hu can

Accepted Answer

A)  not cancel the contract. 
B)  cancel the contract on the basis of fraud. 
C)  cancel the contract on the basis of mistake. 
D)  cancel the contract on the basis of undue influence. 
A)  not cancel the contract. 
B)  cancel the contract on the basis of fraud. 
C)  cancel the contract on the basis of mistake. 
D)  cancel the contract on the basis of undue influence.

Question 16

Riley and Sheila enter into a contract for the sale of Riley's condominium to Sheila. Sheila transfers her right to be recorded as the owner of the property to her daughter Tricia. This transfer is

Accepted Answer

A)  a delegation. 
B)  an assignment. 
C)  an accord and satisfaction. 
D)  a negotiation. 
A)  a delegation. 
B)  an assignment. 
C)  an accord and satisfaction. 
D)  a negotiation.

Question 17

Carol pays Dick $10,000 to design an ad campaign for Carol's Coffee Stand chain. The next day, Dick tells Carol that he has accepted a job in New York and cannot design her campaign. Carol files a suit against Dick. As compensatory damages, Carol can recover

Accepted Answer

A)  $100,000. 
B)  $10,000. 
C)  $1,000. 
D)  $0. 
A)  $100,000. 
B)  $10,000. 
C)  $1,000. 
D)  $0.

Question 18

An innocent party can cancel a fraudulent contract.

Accepted Answer

A) True 
 B)False

Question 19

Outdoor Properties, Inc. (OPI), agrees to sell certain acreage to Pia. OPI repudiates the deal. Pia sues OPI and recovers damages. Pia can now obtain

Accepted Answer

A)  an amount in a quasi-contractual recovery. 
B)  damages representing restitution. 
C)  specific performance of the deal. 
D)  nothing more. 
A)  an amount in a quasi-contractual recovery. 
B)  damages representing restitution. 
C)  specific performance of the deal. 
D)  nothing more.

Question 20

An intended beneficiary can sue directly to enforce a contract.

Accepted Answer

A) True 
 B)False

Exam 12: Contract Performance, Breach, and Remedies

Most contracts are discharged by rescission.

Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000. Eastside fails to go through with the deal on the agreed date, when the market price of the land is $17,000. If DA cannot recover the land, DA may recover in damages

Damages compensate a party for harm suffered as a result of another's wrongful act.

Damages are designed to punish a breaching party and deter others from similar conduct.

Misrepresentation of a material fact is an element of fraud.

Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity's shareholders. When Faye's schedule conflicts, she asks Gudren to serve Faye's coffee and pastries at the meeting. This transfer of duties is

A contract entered into under undue influence is voidable.

An event must be certain to occur to constitute a contractual condition.

On a breach of contract, compensatory damages compensate the nonbreaching party for the loss of a bargain.

Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment. When Ira sends her the rest of the price, Jane refuses to ship Ira the collection. Ira should seek

Fact Pattern 12-1 Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up! Restaurant. BRI completes most of the work promised in the contract. -Refer to Fact Pattern 12-1. Casual Dining is entitled to

Erté holds 1,000 pounds of perishable fruit in storage for Fresh Stuff Corporation. Fresh Stuff does not pay for the storage. Erté sells the fruit to Green Grocers, Inc. This sale represents café

Jahna and Ike contract for the sale of Jahna's horse for $1,000. Unknown to either party, the horse has died. Ike is

Gina induces Hu to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents a number of material features. When Hu discovers the truth, Hu can

Riley and Sheila enter into a contract for the sale of Riley's condominium to Sheila. Sheila transfers her right to be recorded as the owner of the property to her daughter Tricia. This transfer is

Carol pays Dick $10,000 to design an ad campaign for Carol's Coffee Stand chain. The next day, Dick tells Carol that he has accepted a job in New York and cannot design her campaign. Carol files a suit against Dick. As compensatory damages, Carol can recover

An innocent party can cancel a fraudulent contract.

Outdoor Properties, Inc. (OPI), agrees to sell certain acreage to Pia. OPI repudiates the deal. Pia sues OPI and recovers damages. Pia can now obtain

An intended beneficiary can sue directly to enforce a contract.

Business and Its Legal Environment

The Courts and Alternative Dispute Resolution

Ethics and Business Decision Making

Constitutional Authority to Regulate Business

Administrative Law

Torts and Product Liability

Criminal Law and Cyber Crime

Intellectual Property and Internet Law

International Law in a Global Economy

Business Organizations

Contract Formation

Sales, Leases, and E-Contracts

Creditors Rights and Bankruptcy

Employment, Immigration, and Labor Law

Employment Discrimination

Environmental Law

Antitrust Law and Promoting Compeittion

Investor Protection and Corporate Governance

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