Question 1

A contract may include a clause stating that no damages can be recovered for a certain type of breach.

Accepted Answer

A) True 
 B)False

Question 2

General Equity Corporation enters into a contract with Honi, who agrees to create artwork for General's main office building. Honi delays and eventually refuses to perform. Meanwhile, General contracts to sell the building to Ideal Investments, Inc., but before the transaction is complete, Jewel Funds Company offers to pay a higher price. General refuses to transfer the building to Ideal. In separate suits by General against Honi and by Ideal against General, each plaintiff seeks specific performance. How might the court rule in each case, and why

Accepted Answer

Generally, the equitable remedy of speci

Question 3

On the breach of a contract, the innocent injured party has a duty to reduce the damages that he or she suffers.

Accepted Answer

A) True 
 B)False

Question 4

Reformation allows a court to rewrite a contract to reflect the parties' true intentions.

Accepted Answer

A) True 
 B)False

Question 5

Hillside Homes, Inc., and Idyll Builders, Inc., enter into a construction contract that includes si

Accepted Answer

A)  allow the parties to cancel the contract. 
B)  award damages to Hillside for the mistakes. 
C)  award damages to Idyll for the mistakes. 
D)  enforce the contract without requiring changes. 
A)  allow the parties to cancel the contract. 
B)  award damages to Hillside for the mistakes. 
C)  award damages to Idyll for the mistakes. 
D)  enforce the contract without requiring changes.

Question 6

Performance of an accord discharges an original contractual obligation.

Accepted Answer

A) True 
 B)False

Question 7

Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch. If Hollis breaches the contract, Grady's normal remedy would be

Accepted Answer

A)  damages. 
B)  quasi contract. 
C)  reformation. 
D)  specific performance. 
A)  damages. 
B)  quasi contract. 
C)  reformation. 
D)  specific performance.

Question 8

Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a Discount City store, and downloads $300 worth of digital music from e-music.com. To be enforceable, the contract that must be in writing is the purchase of

Accepted Answer

A)  the digital music, the MP3 player, and the speakers. 
B)  the digital music and the speakers only. 
C)  the speakers only. 
D)  none of these items. 
A)  the digital music, the MP3 player, and the speakers. 
B)  the digital music and the speakers only. 
C)  the speakers only. 
D)  none of these items.

Question 9

Consequential damages are foreseeable damages that arise from a party's breach of a contract.

Accepted Answer

A) True 
 B)False

Question 10

A contract between E-Debits, Inc., and First Credit Corporation includes a provision excluding liability as a result of fraud. This provision is

Accepted Answer

A)  enforceable because the parties are protected from liability. 
B)  enforceable because the parties consented to it. 
C)  enforceable if the parties have equal bargaining power. 
D)  not enforceable. 
A)  enforceable because the parties are protected from liability. 
B)  enforceable because the parties consented to it. 
C)  enforceable if the parties have equal bargaining power. 
D)  not enforceable.

Question 11

Esther and Faisal agree that Esther will fix Faisal's car in exchange for his paying a preexisting debt owed by Esther to Gladys. This 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 12

Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.

Accepted Answer

A) True 
 B)False

Question 13

After a contract is made, performance may become impossible in an objective sense and discharge the contract.

Accepted Answer

A) True 
 B)False

Question 14

Super Toolmakers, Inc., contracts to sell its business to True Hardware Corporation. Before either party has performed, rescission of this contract requires

Accepted Answer

A)  a mutual agreement to rescind. 
B)  consideration. 
C)  performance by all of the parties. 
D)  Super's payment of damages to True. 
A)  a mutual agreement to rescind. 
B)  consideration. 
C)  performance by all of the parties. 
D)  Super's payment of damages to True.

Question 15

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that the clause excuses.

Accepted Answer

A) True 
 B)False

Question 16

A novation revokes and discharges a prior contract.

Accepted Answer

A) True 
 B)False

Question 17

On the breach of a contract involving the sale of land, money damages is always the most appropriate remedy.

Accepted Answer

A) True 
 B)False

Question 18

Any breach excuses a nonbreaching party from the duty to perform.

Accepted Answer

A) True 
 B)False

Question 19

Irrigation Piping Company ships its only pump to National Hydraulics Corporation, the manufacturer, for repair. Irrigation hires Overland Transport, Inc., to take the pump to National Hydraulics and to return it to Irrigation as soon as the repair is complete. Irrigation is forced to suspend operations without a pump, but Overland does not know this. Irrigation expects to be without the pump for five days and to lose profits of $5,000. When the pump is not returned by the end of the fifth day, Irrigation rents a pump at a cost of $100 per day. Overland delays five more days before returning the pump. Irrigation files a suit against Overland, asking for compensatory and consequential damages. Will Irrigation recover Explain.

Accepted Answer

Yes and no. Irrigation will succeed in r

Question 20

Refined Commodities, Inc., agrees to deliver ten tons of sheet metal to Select Builders Corporation. The agreement states that delivery is to be within "3" days, although the parties intend "30" days. Refined cannot convince Select to amend the contract. Refined should seek

Accepted Answer

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

Exam 12: Contract Performance, Breach, and Remedies

A contract may include a clause stating that no damages can be recovered for a certain type of breach.

On the breach of a contract, the innocent injured party has a duty to reduce the damages that he or she suffers.

Reformation allows a court to rewrite a contract to reflect the parties' true intentions.

Hillside Homes, Inc., and Idyll Builders, Inc., enter into a construction contract that includes si

Performance of an accord discharges an original contractual obligation.

Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch. If Hollis breaches the contract, Grady's normal remedy would be

Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a Discount City store, and downloads $300 worth of digital music from e-music.com. To be enforceable, the contract that must be in writing is the purchase of

Consequential damages are foreseeable damages that arise from a party's breach of a contract.

A contract between E-Debits, Inc., and First Credit Corporation includes a provision excluding liability as a result of fraud. This provision is

Esther and Faisal agree that Esther will fix Faisal's car in exchange for his paying a preexisting debt owed by Esther to Gladys. This is

Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.

After a contract is made, performance may become impossible in an objective sense and discharge the contract.

Super Toolmakers, Inc., contracts to sell its business to True Hardware Corporation. Before either party has performed, rescission of this contract requires

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that the clause excuses.

A novation revokes and discharges a prior contract.

On the breach of a contract involving the sale of land, money damages is always the most appropriate remedy.

Any breach excuses a nonbreaching party from the duty to perform.

Refined Commodities, Inc., agrees to deliver ten tons of sheet metal to Select Builders Corporation. The agreement states that delivery is to be within "3" days, although the parties intend "30" days. Refined cannot convince Select to amend the contract. Refined should seek

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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