Question 1

A breach of contract always discharges the injured party from performance under the contract.

Accepted Answer

A) True 
 B)False  False

Question 2

A novation is an agreement between two parties to have one substitute for the other in a contract.

Accepted Answer

A) True 
 B)False  False

Question 3

Phil, a tax accountant, promises to do Marge's individual federal, state, local, and gift taxes for the year. He completes all but the gift taxes. Under the substantial performance doctrine, Marge will:

Accepted Answer

A)  not have to pay Phil. 
B)  not have to accept the work. 
C)  have to pay Phil for all but the gift taxes. 
D)  have to pay Phil the contract price. 
A)  not have to pay Phil. 
B)  not have to accept the work. 
C)  have to pay Phil for all but the gift taxes. 
D)  have to pay Phil the contract price. C

Question 4

An implied-in-fact condition and constructive condition are the same.

Accepted Answer

A) True 
 B)False

Question 5

Louis agreed to provide all the apples that Cindy's Cider Mill will need at $3 per bushel unless weather conditions require additional labor to be hired. The rate would then be $3.50 per bushel. A freeze warning required Louis to hire 100 additional overtime workers, raising the cost per bushel to $4.75. Louis wants to get out of his contract. Can he?

Accepted Answer

A)  No, the parties expected the hardship and provided for it in their contract 
B)  No, there is no hardship 
C)  Yes, the contract is impracticable 
D)  Yes, the freeze is a supervening event 
A)  No, the parties expected the hardship and provided for it in their contract 
B)  No, there is no hardship 
C)  Yes, the contract is impracticable 
D)  Yes, the freeze is a supervening event

Question 6

Which of the following is/are correct with regard to conditions subsequent?

Accepted Answer

A)  Conditions subsequent are quite common in contracts. 
B)  A "sale or return" contract is an example of a contract with a condition subsequent. 
C)  A condition subsequent must occur before performance is due under a contract. 
D)  All of these are correct. 
A)  Conditions subsequent are quite common in contracts. 
B)  A "sale or return" contract is an example of a contract with a condition subsequent. 
C)  A condition subsequent must occur before performance is due under a contract. 
D)  All of these are correct.

Question 7

Janice contracts to sell a certain tract of land to Anthony for $5,000, but the contract does not state a time for delivery of the deed and payment of the price. In this situation:

Accepted Answer

A)  the contract will be considered void for lack of essential terms. 
B)  the law will imply that the respective performances are independent of each other and may occur whenever "reasonable under the circumstances." 
C)  courts will treat the promises to deliver the deed and to pay the $5,000 as mutually dependent. Anthony's duty to pay is conditioned upon Janice's delivery of the deed and Janice's duty to deliver the deed is conditioned upon Anthony's payment or tender of $5,000 to Janice. 
D)  Janice's duty to deliver the deed and Anthony's duty to pay the $5,000 are "implied­in­fact" conditions. 
A)  the contract will be considered void for lack of essential terms. 
B)  the law will imply that the respective performances are independent of each other and may occur whenever "reasonable under the circumstances." 
C)  courts will treat the promises to deliver the deed and to pay the $5,000 as mutually dependent. Anthony's duty to pay is conditioned upon Janice's delivery of the deed and Janice's duty to deliver the deed is conditioned upon Anthony's payment or tender of $5,000 to Janice. 
D)  Janice's duty to deliver the deed and Anthony's duty to pay the $5,000 are "implied­in­fact" conditions.

Question 8

What is the difference between implied-in-fact and express conditions?

Accepted Answer

Express conditions are explicitly set fo

Question 9

Professor Glass is hired by Towers University to teach business law at a salary of $3,000 per month. After school
has been in session for two months, the Business Administration Building is destroyed by fire. The University refuses to pay him any further salary, claiming they are discharged from their obligation of performance. Is the University discharged from its obligation of performance? Is Professor Glass discharged from his obligation of performance? Explain, citing the legal principles involved.

Accepted Answer

Neither party is discharged from perform

Question 10

In all substituted contracts there must be an agreement among three parties where a new promise is substituted for an existing promise or a new promisor is substituted for an existing promisor.

Accepted Answer

A) True 
 B)False

Question 11

Robert and John entered into a bilateral contract. If they agree to a rescission of the contract while it is executory, there is a lack of consideration for the rescission.

Accepted Answer

A) True 
 B)False

Question 12

Henry hires Ace Roofing to put a new roof on his house. When Ace comes, Henry refuses to let them on the roof, saying that he has a headache and doesn't want to listen to pounding. The next day, Henry still has a headache and he refuses to allow them on the roof. The day after, the baby is sleeping and Henry refuses to allow them to work. After four weeks of this, Ace:

Accepted Answer

A)  may be discharged, but Henry is not. 
B)  may be discharged, and so would Henry. 
C)  can sue for damages, but must perform when Henry is ready. 
D)  has no choice but to keep coming back each day until Henry is ready. 
A)  may be discharged, but Henry is not. 
B)  may be discharged, and so would Henry. 
C)  can sue for damages, but must perform when Henry is ready. 
D)  has no choice but to keep coming back each day until Henry is ready.

Question 13

If there is a novation, the original promisor remains liable to the original promisee if the new promisor fails to perform.

Accepted Answer

A) True 
 B)False

Question 14

Explain what may constitute a material breach and list the relevant factors in determining if a material breach exists.

Accepted Answer

Discharge by agreement of the parties oc

Question 15

A tailor agrees to sew a suit for Bryan, who promises in return to pay $500 for the suit if he is satisfied with it. The tailor completes the suit, which fits Bryan perfectly. Nevertheless, he says that he is not satisfied and refuses to accept or pay for it. Bryan is honest in his dissatisfaction, but he is unreasonable. In this case:

Accepted Answer

A)  Bryan must pay for the suit even if he is dissatisfied. 
B)  this is an illusory contract, because only the tailor is bound. 
C)  Bryan's approval is an objective standard. 
D)  the tailor has no recourse, because he agreed to the subjective standard. 
A)  Bryan must pay for the suit even if he is dissatisfied. 
B)  this is an illusory contract, because only the tailor is bound. 
C)  Bryan's approval is an objective standard. 
D)  the tailor has no recourse, because he agreed to the subjective standard.

Question 16

Arnold and Doug make a contract for Arnold to manufacture five leather chairs of a specified design. Prior to their manufacture, the factory is destroyed in an accidental fire that is no one's fault. The chairs are available from other sources. Arnold:

Accepted Answer

A)  must supply the chairs, even if he must buy them elsewhere. 
B)  is discharged from his duty to deliver the chairs by the destruction of the factory. 
C)  has materially breached the contract if he fails to deliver the chairs. 
D)  must return any money paid by Doug. 
A)  must supply the chairs, even if he must buy them elsewhere. 
B)  is discharged from his duty to deliver the chairs by the destruction of the factory. 
C)  has materially breached the contract if he fails to deliver the chairs. 
D)  must return any money paid by Doug.

Question 17

Concurrent conditions occur when mutual duties of performance are to take place simultaneously.

Accepted Answer

A) True 
 B)False

Question 18

Lou and David have an executory contract that is supposed to be performed on June 1. On May 1, David indicates that he has no intention of performing the contract as agreed. Lou must wait until June 1 before he can pursue any remedies for breach of contract against David.

Accepted Answer

A) True 
 B)False

Question 19

"Discharge" has to do with the termination of contractual duties.

Accepted Answer

A) True 
 B)False

Question 20

An obligee's promise to accept a stated performance in satisfaction of the obligor's existing contractual duty creates an accord.

Accepted Answer

A) True 
 B)False

Exam 17: Performance, Breach, and Discharge

A breach of contract always discharges the injured party from performance under the contract.

A novation is an agreement between two parties to have one substitute for the other in a contract.

Phil, a tax accountant, promises to do Marge's individual federal, state, local, and gift taxes for the year. He completes all but the gift taxes. Under the substantial performance doctrine, Marge will:

An implied-in-fact condition and constructive condition are the same.

Which of the following is/are correct with regard to conditions subsequent?

Janice contracts to sell a certain tract of land to Anthony for $5,000, but the contract does not state a time for delivery of the deed and payment of the price. In this situation:

What is the difference between implied-in-fact and express conditions?

In all substituted contracts there must be an agreement among three parties where a new promise is substituted for an existing promise or a new promisor is substituted for an existing promisor.

Robert and John entered into a bilateral contract. If they agree to a rescission of the contract while it is executory, there is a lack of consideration for the rescission.

If there is a novation, the original promisor remains liable to the original promisee if the new promisor fails to perform.

Explain what may constitute a material breach and list the relevant factors in determining if a material breach exists.

Arnold and Doug make a contract for Arnold to manufacture five leather chairs of a specified design. Prior to their manufacture, the factory is destroyed in an accidental fire that is no one's fault. The chairs are available from other sources. Arnold:

Concurrent conditions occur when mutual duties of performance are to take place simultaneously.

Lou and David have an executory contract that is supposed to be performed on June 1. On May 1, David indicates that he has no intention of performing the contract as agreed. Lou must wait until June 1 before he can pursue any remedies for breach of contract against David.

"Discharge" has to do with the termination of contractual duties.

An obligee's promise to accept a stated performance in satisfaction of the obligor's existing contractual duty creates an accord.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property

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