Question 1

When is an assignment enforceable against an obligor?

Accepted Answer

A) from the moment the assignment is made 
B) from the moment the obligor signs the contract 
C) from the moment the assignee gives consideration 
D) from the moment the obligor is notified of the assignment 
A) from the moment the assignment is made 
B) from the moment the obligor signs the contract 
C) from the moment the assignee gives consideration 
D) from the moment the obligor is notified of the assignment D

Question 2

A donee beneficiary

Accepted Answer

A) is not entitled to enforce a contract against either party. 
B) usually does not give consideration in return for the gift. 
C) will generally become a creditor beneficiary after his or her rights vest. 
D) is an incidental beneficiary. 
A) is not entitled to enforce a contract against either party. 
B) usually does not give consideration in return for the gift. 
C) will generally become a creditor beneficiary after his or her rights vest. 
D) is an incidental beneficiary. B

Question 3

Identify and describe the principal contract interests a court may seek to protect.

Accepted Answer

The principal contract interests a court may seek to protect are: 
a. Expectation interest. The intent is to put the injured party in the position he would have been in if both parties had fully performed their obligations. Expectation damages include direct, consequential, and incidental damages. 
b. Reliance interest. The intent is to put the plaintiff in the position he would have been in if the parties had never entered into a contract. 
c. Restitution interest. The objective is to return to the injured party a benefit that he has conferred on the other party which it would be unjust to leave with that person. 
d. Equitable interest. In some cases, money damages will not suffice to help the injured party. Something more is needed.

Question 4

Statutes of limitations

Accepted Answer

A) define how much money the injured party can sue for under a breach of contract claim. 
B) define whether there has been substantial performance of a contract or a material breach. 
C) limit the time in which an injured party may sue. 
D) only apply to the sale of goods. There is no statute of limitations on a service contract. 
A) define how much money the injured party can sue for under a breach of contract claim. 
B) define whether there has been substantial performance of a contract or a material breach. 
C) limit the time in which an injured party may sue. 
D) only apply to the sale of goods. There is no statute of limitations on a service contract.

Question 5

Wright Company contracted with the city of St. Louis to train and employ disadvantaged youths. If Wright fails to fulfill the contract and is sued by one of the disadvantaged youths, the youth would

Accepted Answer

A) win, as he is an intended beneficiary. 
B) win, as he is a donor beneficiary. 
C) lose, as he is a creditor beneficiary. 
D) lose, as he is an incidental beneficiary. 
A) win, as he is an intended beneficiary. 
B) win, as he is a donor beneficiary. 
C) lose, as he is a creditor beneficiary. 
D) lose, as he is an incidental beneficiary.

Question 6

The goal of expectation interest is to

Accepted Answer

A) serve as a penalty for breaching a contract. 
B) award damages under the UCC when the sale of goods is the subject of the contract. 
C) put the non-breaching party in the position it would have been in had the contract never been formed. 
D) put the non-breaching party in the position it would have been in if the contract hadn't been breached. 
A) serve as a penalty for breaching a contract. 
B) award damages under the UCC when the sale of goods is the subject of the contract. 
C) put the non-breaching party in the position it would have been in had the contract never been formed. 
D) put the non-breaching party in the position it would have been in if the contract hadn't been breached.

Question 7

Assume that Jessie and Lester have formed a contract whereby Jessie agrees to deliver 10,000 dozen "Grade A Large Eggs" to be shipped in paper cartons. A shortage of paper makes paper cartons much more expensive, so Jessie uses styrofoam cartons and ships the eggs. Lester is entitled to cancel the contract based on a material breach of the contract.

Accepted Answer

A) True 
 B)False

Question 8

Monumental, Inc. contracts with Champion Builders to erect a three-story office building on a parcel of land it has purchased. Before construction begins, the local zoning board changes the zoning of the parcel and those adjoining it to residential use only. Monumental's contract with Champion is discharged.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following duties can probably be delegated?

Accepted Answer

A) an agreement to perform an operation 
B) a contract to paint a picture 
C) an agreement by an attorney to draft a contract 
D) an agreement to paint a house 
A) an agreement to perform an operation 
B) a contract to paint a picture 
C) an agreement by an attorney to draft a contract 
D) an agreement to paint a house

Question 10

Garth's Imports sold a car to Wally on credit for $30,000. Garth assigned to Cassandra all of his rights to receive money from Wally. Cassandra did not inform Wally of the assignment. Therefore, Wally continued to make the next three payments directly to Garth. Shortly thereafter, Garth left the country with the money. If Cassandra sues Wally for the missing three payments

Accepted Answer

A) Cassandra will not be able to collect the money from Wally. 
B) Cassandra will be able to collect the money from Wally. 
C) Wally is liable for the three payments because Cassandra paid consideration for the assignment rights. 
D) Wally cannot raise the defense of previous payment. 
A) Cassandra will not be able to collect the money from Wally. 
B) Cassandra will be able to collect the money from Wally. 
C) Wally is liable for the three payments because Cassandra paid consideration for the assignment rights. 
D) Wally cannot raise the defense of previous payment.

Question 11

If Ray agrees to rake leaves for Michelle in exchange for Michelle's promise to pay off the debt Ray owes to Dean, then Dean is a donee beneficiary of the agreement between Ray and Michelle.

Accepted Answer

A) True 
 B)False

Question 12

In January 2018, Professor Noe entered into a contract with State University. She agreed to teach full time during the 2018-2019 academic year. Professor Noe died on May 31, 2018. Her estate

Accepted Answer

A) is obligated to find another person who will agree to teach during the academic year. 
B) is discharged from any further obligations under the contract. 
C) will be discharged from any obligations under the contract only if it can be shown that her death was unexpected. 
D) will not be discharged. If the University has to pay more in order to hire a comparable substitute professor at the last minute, then the estate will be responsible for the difference in pay. 
A) is obligated to find another person who will agree to teach during the academic year. 
B) is discharged from any further obligations under the contract. 
C) will be discharged from any obligations under the contract only if it can be shown that her death was unexpected. 
D) will not be discharged. If the University has to pay more in order to hire a comparable substitute professor at the last minute, then the estate will be responsible for the difference in pay.

Question 13

Which of the following is an example of incidental damages you might be awarded if you are wrongfully terminated from your job?

Accepted Answer

A) the costs of psychological counseling 
B) the costs of mailing resumes to prospective employers 
C) the costs of a new wardrobe for future interviews 
D) the costs of cosmetic surgery 
A) the costs of psychological counseling 
B) the costs of mailing resumes to prospective employers 
C) the costs of a new wardrobe for future interviews 
D) the costs of cosmetic surgery

Question 14

Tyron purchased a vacant lot and entered into a contract with BZ Inc. to construct a shopping center on the site. Douglas heard about this contract and built a restaurant on an adjoining piece of property because of the planned shopping center. Tyron was unable to raise the necessary capital and was unable to perform the contract with BZ, Inc. Douglas sued Tyron for breach of contract as a third party beneficiary. Douglas will probably

Accepted Answer

A) win as a third party creditor beneficiary. 
B) win as a third party donee beneficiary. 
C) lose as a third party incidental beneficiary. 
D) lose as a third party creditor beneficiary. 
A) win as a third party creditor beneficiary. 
B) win as a third party donee beneficiary. 
C) lose as a third party incidental beneficiary. 
D) lose as a third party creditor beneficiary.

Question 15

Robert hired James, a CPA, to prepare his tax returns. James was too busy and delegated the work to Sara, also a CPA. This delegation is

Accepted Answer

A) enforceable, as Sara is also a CPA. 
B) enforceable, as there was no expectation James would do the work. 
C) not enforceable, as Robert hired James to perform personal services. 
D) not enforceable, as this violates public policy. 
A) enforceable, as Sara is also a CPA. 
B) enforceable, as there was no expectation James would do the work. 
C) not enforceable, as Robert hired James to perform personal services. 
D) not enforceable, as this violates public policy.

Question 16

Briefly discuss the enforceability of contracts by third parties.

Accepted Answer

Contracts can be enforced by third parti

Question 17

Susan took out a life insurance policy on herself, paying all of the premium payments. She named her daughter, Jessica, as the beneficiary under the policy. Jessica has not given anything in consideration for the policy. Jessica is a(n)

Accepted Answer

A) donee beneficiary who has rights to enforce the policy once Susan dies. 
B) creditor beneficiary who has rights to enforce the policy once Susan dies. 
C) incidental beneficiary because Jessica did not give any consideration for the policy and therefore cannot enforce the policy even when Susan dies. 
D) promisor in the contract with no enforcement rights. 
A) donee beneficiary who has rights to enforce the policy once Susan dies. 
B) creditor beneficiary who has rights to enforce the policy once Susan dies. 
C) incidental beneficiary because Jessica did not give any consideration for the policy and therefore cannot enforce the policy even when Susan dies. 
D) promisor in the contract with no enforcement rights.

Question 18

Specific performance is available when the subject matter of the contract is unique.

Accepted Answer

A) True 
 B)False

Question 19

The status of a third party is determined by

Accepted Answer

A) the type of contract. 
B) whether the third party gave consideration. 
C) the reasonable expectations of the third party. 
D) the intent of the contracting parties. 
A) the type of contract. 
B) whether the third party gave consideration. 
C) the reasonable expectations of the third party. 
D) the intent of the contracting parties.

Question 20

Which statement most accurately describes third party beneficiary rights?

Accepted Answer

A) A beneficiary may enforce a contract if the parties intended to benefit him and if enforcing the promise will satisfy a duty of the promisee to the beneficiary. 
B) If a promisee intended to make a gift to the beneficiary, the beneficiary may not enforce the contract. 
C) An intended third party beneficiary has no enforceable rights in a contract. 
D) Incidental beneficiaries have enforceable rights against both contracting parties. 
A) A beneficiary may enforce a contract if the parties intended to benefit him and if enforcing the promise will satisfy a duty of the promisee to the beneficiary. 
B) If a promisee intended to make a gift to the beneficiary, the beneficiary may not enforce the contract. 
C) An intended third party beneficiary has no enforceable rights in a contract. 
D) Incidental beneficiaries have enforceable rights against both contracting parties.

Exam 12: Performance of a Contract

When is an assignment enforceable against an obligor?

A donee beneficiary

Identify and describe the principal contract interests a court may seek to protect.

Statutes of limitations

Wright Company contracted with the city of St. Louis to train and employ disadvantaged youths. If Wright fails to fulfill the contract and is sued by one of the disadvantaged youths, the youth would

The goal of expectation interest is to

Which of the following duties can probably be delegated?

If Ray agrees to rake leaves for Michelle in exchange for Michelle's promise to pay off the debt Ray owes to Dean, then Dean is a donee beneficiary of the agreement between Ray and Michelle.

In January 2018, Professor Noe entered into a contract with State University. She agreed to teach full time during the 2018-2019 academic year. Professor Noe died on May 31, 2018. Her estate

Which of the following is an example of incidental damages you might be awarded if you are wrongfully terminated from your job?

Robert hired James, a CPA, to prepare his tax returns. James was too busy and delegated the work to Sara, also a CPA. This delegation is

Briefly discuss the enforceability of contracts by third parties.

Susan took out a life insurance policy on herself, paying all of the premium payments. She named her daughter, Jessica, as the beneficiary under the policy. Jessica has not given anything in consideration for the policy. Jessica is a(n)

Specific performance is available when the subject matter of the contract is unique.

The status of a third party is determined by

Which statement most accurately describes third party beneficiary rights?

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