Question 1

Megan contracts to sell Nonny her horse for $4,000. This contract will be fully discharged when Megan and Nonny

Accepted Answer

A)  execute a bill of sale. 
B)  exchange the horse for the money. 
C)  sign a receipt. 
D)  agree that the deal is fair. 
A)  execute a bill of sale. 
B)  exchange the horse for the money. 
C)  sign a receipt. 
D)  agree that the deal is fair. B

Question 2

The most common way to terminate contractual duties is by repudiation.

Accepted Answer

A) True 
 B)False  False

Question 3

Tender is an unconditional offer to perform by a person who is ready, willing, and able to do so.

Accepted Answer

A) True 
 B)False  True

Question 4

An accord and its satisfaction do not discharge an original contractual obligation.

Accepted Answer

A) True 
 B)False

Question 5

Rene contracts with Scot to pay him $5,000 for repairs to Rene's lake cabin. After Scot performs, Rene tells him that she cannot pay him in full immediately. They sign an agreement in which Rene promises to pay $2,500 now instead of $5,000 later. This is

Accepted Answer

A)  a mutual agreement to rescind. 
B)  an accord and satisfaction. 
C)  a novation. 
D)  specific performance. 
A)  a mutual agreement to rescind. 
B)  an accord and satisfaction. 
C)  a novation. 
D)  specific performance.

Question 6

Jason and Kelly enter into a contract for Jason to renovate Kelly's house by a certain date. Jason never performs. After the applicable limitations period has passed, Kelly decides to bring a suit against Jason for breach. This suit

Accepted Answer

A)  must be filed within ten to twenty years, depending on state law. 
B)  can no longer be brought. 
C)  can be filed within four years after Kelly decides to sue. 
D)  must be filed between four and five years after Kelly decides to sue. 
A)  must be filed within ten to twenty years, depending on state law. 
B)  can no longer be brought. 
C)  can be filed within four years after Kelly decides to sue. 
D)  must be filed between four and five years after Kelly decides to sue.

Question 7

Contractual obligations will be discharged if unforeseeable circumstances make it impossible to attain the deal's purpose.

Accepted Answer

A) True 
 B)False

Question 8

Adrian operates a recycled metals business and contracts to provide ten tons of scrap steel at $500 per ton to be delivered to Build-It-Rite Materials, Inc., in seven months. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Adrian to fulfill the contract for less than $5,000 per ton. Adrian's best defense against performing the contract would be that

Accepted Answer

A)  performance of the contract is commercially impracticable. 
B)  procuring the steel would force the seller into bankruptcy. 
C)  the law has rendered performance of the contract illegal. 
D)  the specific subject matter of the contract has been destroyed. 
A)  performance of the contract is commercially impracticable. 
B)  procuring the steel would force the seller into bankruptcy. 
C)  the law has rendered performance of the contract illegal. 
D)  the specific subject matter of the contract has been destroyed.

Question 9

A contract is substantially performed when one party receives most of the benefits promised in the deal.

Accepted Answer

A) True 
 B)False

Question 10

Restoration Inc. enters into a contract to refurbish an old bus depot for Quality Café LLC. If Restoration completes most of the work promised in the contract, its performance will be

Accepted Answer

A)  conditional. 
B)  complete. 
C)  material. 
D)  substantial. 
A)  conditional. 
B)  complete. 
C)  material. 
D)  substantial.

Question 11

If performance of a contract is not substantial, there is a material breach, which excuses the nonbreaching party from performance.

Accepted Answer

A) True 
 B)False

Question 12

A statute of limitations limits the amount of damages that the nonbreaching party can obtain for a breach.

Accepted Answer

A) True 
 B)False

Question 13

Build-It Construction LLC contracts to build a warehouse for Corporate Storage Inc. Corporate does not have to pay Build-It if the warehouse is not built. Their respective promises are

Accepted Answer

A)  conditioned on the occurrence of an event. 
B)  conditioned on the nonoccurrence of an event. 
C)  conditioned on Build-It's performance. 
D)  not conditioned. 
A)  conditioned on the occurrence of an event. 
B)  conditioned on the nonoccurrence of an event. 
C)  conditioned on Build-It's performance. 
D)  not conditioned.

Question 14

Sara enters into a contract to sell her condo to Ted for a certain price on a specific day. On that day, Sara unconditionally offers to perform. Sara's offer

Accepted Answer

A)  conditions Ted's promise to pay for the property. 
B)  constitutes tender of performance. 
C)  excuses the parties' performance under the contract. 
D)  suspends the parties' contractual obligations. 
A)  conditions Ted's promise to pay for the property. 
B)  constitutes tender of performance. 
C)  excuses the parties' performance under the contract. 
D)  suspends the parties' contractual obligations.

Question 15

East Bay Café orders seafood from Fresh Catch Company. Fresh places the goods at East's disposal. Fresh's performance under the contract is

Accepted Answer

A)  conditional. 
B)  complete. 
C)  material. 
D)  substantial. 
A)  conditional. 
B)  complete. 
C)  material. 
D)  substantial.

Question 16

Discharging a contract by executing a new agreement with performance different from what was originally promised is

Accepted Answer

A)  a material breach. 
B)  an accord and satisfaction. 
C)  a novation. 
D)  substantial performance. 
A)  a material breach. 
B)  an accord and satisfaction. 
C)  a novation. 
D)  substantial performance.

Question 17

Quest Resources, Inc., contracts with Ring Communications Corporation (RCC) for RCC to design and build an all-weather communications system for Quest's field operations. RCC builds the system, but it functions effectively only in good weather. Is this a breach of the contract? If so, what remedies does Quest have?

Accepted Answer

Performance far below reasonable expecta

Question 18

Vera enters into a contract to work as a lifeguard at Water Park for the summer in exchange for a weekly paycheck. The duties under this contract will be discharged when the duties are

Accepted Answer

A)  avoided. 
B)  breached. 
C)  conditioned. 
D)  performed. 
A)  avoided. 
B)  breached. 
C)  conditioned. 
D)  performed.

Question 19

There is only one way to discharge a contract-all parties must fulfill their contractual duties.

Accepted Answer

A) True 
 B)False

Question 20

Hilton enters into a contract to erect a fence around Irene's cattle pasture. When the fence is built, Hilton's performance will be

Accepted Answer

A)  conditional. 
B)  complete. 
C)  material. 
D)  substantial. 
A)  conditional. 
B)  complete. 
C)  material. 
D)  substantial.

Exam 16: Performance and Discharge

Megan contracts to sell Nonny her horse for $4,000. This contract will be fully discharged when Megan and Nonny

The most common way to terminate contractual duties is by repudiation.

Tender is an unconditional offer to perform by a person who is ready, willing, and able to do so.

An accord and its satisfaction do not discharge an original contractual obligation.

Rene contracts with Scot to pay him $5,000 for repairs to Rene's lake cabin. After Scot performs, Rene tells him that she cannot pay him in full immediately. They sign an agreement in which Rene promises to pay $2,500 now instead of $5,000 later. This is

Jason and Kelly enter into a contract for Jason to renovate Kelly's house by a certain date. Jason never performs. After the applicable limitations period has passed, Kelly decides to bring a suit against Jason for breach. This suit

Contractual obligations will be discharged if unforeseeable circumstances make it impossible to attain the deal's purpose.

A contract is substantially performed when one party receives most of the benefits promised in the deal.

Restoration Inc. enters into a contract to refurbish an old bus depot for Quality Café LLC. If Restoration completes most of the work promised in the contract, its performance will be

If performance of a contract is not substantial, there is a material breach, which excuses the nonbreaching party from performance.

A statute of limitations limits the amount of damages that the nonbreaching party can obtain for a breach.

Build-It Construction LLC contracts to build a warehouse for Corporate Storage Inc. Corporate does not have to pay Build-It if the warehouse is not built. Their respective promises are

Sara enters into a contract to sell her condo to Ted for a certain price on a specific day. On that day, Sara unconditionally offers to perform. Sara's offer

East Bay Café orders seafood from Fresh Catch Company. Fresh places the goods at East's disposal. Fresh's performance under the contract is

Discharging a contract by executing a new agreement with performance different from what was originally promised is

Vera enters into a contract to work as a lifeguard at Water Park for the summer in exchange for a weekly paycheck. The duties under this contract will be discharged when the duties are

There is only one way to discharge a contract-all parties must fulfill their contractual duties.

Hilton enters into a contract to erect a fence around Irene's cattle pasture. When the fence is built, Hilton's performance will be

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