Question 1

Punitive damages are damages paid to the plaintiff in order to punish the defendant, not to compensate the plaintiff. ​

Accepted Answer

A) True 
 B)False  True

Question 2

What constitutes satisfactory performance in a contract? ​

Accepted Answer

What constitutes satisfactory performance is frequently a disputed question. The courts generally have adopted the rule-especially when a definite, objective measure of satisfaction exists-that if the contract is performed in a manner that would satisfy an ordinary, reasonable person, the terms of the contract have been met sufficiently to discharge it. If the performance is clearly intended to be subject to the personal taste or judgment of one of the parties, however, it may be rejected on the ground that it is not satisfactory to that particular party. ​

Question 3

AB Developers signs a contract with CL Corp., agreeing to build a $20 million office for the corporation. The construction contract was substantially performed. There were, however, a few minor breaches of the contract by AB Developers that made CL Corp. incur damages worth $10,000. Which of the following is most likely to be true in this scenario? ​

Accepted Answer

A) Since there was a breach of contract, CL Corp. may not pay any compensation to AB Developers. 
B) CL Corp. needs to pay the full price under the contract since the work was substantially performed. 
C) CL Corp. needs to pay the full price under the contract less the damages suffered by it. 
D) AB Developers needs to pay nominal damages to CL Corp. for breach of contract. 
A) Since there was a breach of contract, CL Corp. may not pay any compensation to AB Developers. 
B) CL Corp. needs to pay the full price under the contract since the work was substantially performed. 
C) CL Corp. needs to pay the full price under the contract less the damages suffered by it. 
D) AB Developers needs to pay nominal damages to CL Corp. for breach of contract. C

Question 4

If a debtor tells a creditor "I am ready to pay you now," a sufficient tender of payment has been made.

Accepted Answer

A) True 
 B)False

Question 5

An offer to pay money in satisfaction of a debt or claim when one has the ability to pay is a . ​

Accepted Answer

A) time of performance 
B) tender of performance 
C) tender of payment 
D) substantial performance 
A) time of performance 
B) tender of performance 
C) tender of payment 
D) substantial performance

Question 6

A debt that has been prohibited from collection by a statute of limitations can never be revived.

Accepted Answer

A) True 
 B)False

Question 7

​ A f orce majeure clause in a contract is a contract provision that excuses performance by a party when:

Accepted Answer

A) an extraordinary event outside the party's control occurs. 
B) death or physical incapacity occurs, making it impossible to perform the services of the contract. 
C) the performance is made impossible by the wrongful act of the other party. 
D) an act that was legal at the time of the contract, is subsequently made illegal. 
A) an extraordinary event outside the party's control occurs. 
B) death or physical incapacity occurs, making it impossible to perform the services of the contract. 
C) the performance is made impossible by the wrongful act of the other party. 
D) an act that was legal at the time of the contract, is subsequently made illegal.

Question 8

If performance in a contract becomes extremely difficult after the contract is formed, it automatically discharges the contract. ​

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements best describes specific performance? ​

Accepted Answer

A) It refers to the payment of compensatory damages by a party as a remedy for breach of contract. 
B) It refers to the carrying out of the specific terms of a contract. 
C) It refers to carrying out of terms that were not specified in a contract in order to compensate for damages. 
D) It refers to the payment of liquidated damages by a party as a remedy for breach of contract. 
A) It refers to the payment of compensatory damages by a party as a remedy for breach of contract. 
B) It refers to the carrying out of the specific terms of a contract. 
C) It refers to carrying out of terms that were not specified in a contract in order to compensate for damages. 
D) It refers to the payment of liquidated damages by a party as a remedy for breach of contract.

Question 10

Which of the following statements is true of statutes of limitations?

Accepted Answer

A) For open accounts, accounts receivable, and ordinary loans, the statute of limitations is always one year. 
B) Even if a promisor leaves the state, the statute continues to run while the promisor is beyond the jurisdiction of the court. 
C) Statutes of limitations are uniform for all kinds of debts and suits. 
D) In the case of running accounts, such as purchases from department stores, the statute starts from the date of the last purchase. 
A) For open accounts, accounts receivable, and ordinary loans, the statute of limitations is always one year. 
B) Even if a promisor leaves the state, the statute continues to run while the promisor is beyond the jurisdiction of the court. 
C) Statutes of limitations are uniform for all kinds of debts and suits. 
D) In the case of running accounts, such as purchases from department stores, the statute starts from the date of the last purchase.

Question 11

If an act is legal at the time of entering a contract but is subsequently made illegal, the contract is discharged. ​

Accepted Answer

A) True 
 B)False

Question 12

​ The rescission of a contract releases an aggrieved party from all obligations that are yet to be performed

Accepted Answer

A) True 
 B)False

Question 13

​ If a party intentionally and without the consent of the other party alters a written contract, the other innocent party is discharged.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an example of a contract discharged by impossibility of performance? ​

Accepted Answer

A) A new law makes the contract illegal. 
B) The cost of raw materials rises slightly, making it more expensive for a business to perform under the contract. 
C) An event occurs that reasonably parties should have anticipated. 
D) Performance will require additional time, making it impracticable for a party to perform under the contract. 
A) A new law makes the contract illegal. 
B) The cost of raw materials rises slightly, making it more expensive for a business to perform under the contract. 
C) An event occurs that reasonably parties should have anticipated. 
D) Performance will require additional time, making it impracticable for a party to perform under the contract.

Question 15

When a contract contains the words "time is of the essence," which of the following is true?  ​

Accepted Answer

A) Performance must be rendered within a reasonable amount of time. 
B) Performance on the exact date is deemed vital. 
C) Performance must occur within 24 hours of signing the contract. 
D) Performance is not an essential component of the contract. 
A) Performance must be rendered within a reasonable amount of time. 
B) Performance on the exact date is deemed vital. 
C) Performance must occur within 24 hours of signing the contract. 
D) Performance is not an essential component of the contract.

Question 16

​ When a court orders for specific performance, it is exercising its equity powers.

Accepted Answer

A) True 
 B)False

Question 17

If a contract calls for personal services, the death or physical incapacity of the person to perform such services discharges the contract. ​

Accepted Answer

A) True 
 B)False

Question 18

In which of the following cases will a court refuse to enforce the provision of liquidated damages on a party?

Accepted Answer

A) When the actual damages are difficult to determine 
B) When the liquidated damages were established prior to the breach of contract 
C) When the amount of liquidated damages fixed by the contract is unreasonable 
D) When the parties refuse to pay the liquidated damages established in the contract 
A) When the actual damages are difficult to determine 
B) When the liquidated damages were established prior to the breach of contract 
C) When the amount of liquidated damages fixed by the contract is unreasonable 
D) When the parties refuse to pay the liquidated damages established in the contract

Question 19

​ In a written contract, Sheldon agreed to tutor the children of Mrs. Smith for a certain period of time. However, Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments of his. In this case, there has been a(n):

Accepted Answer

A) anticipatory breach. 
B) rescission. 
C) negligent breach. 
D) malpractice. 
A) anticipatory breach. 
B) rescission. 
C) negligent breach. 
D) malpractice.

Question 20

A breach of contract by one of the parties bound on a contract immediately terminates the contract. ​

Accepted Answer

A) True 
 B)False

Exam 13: Termination of Contracts

Punitive damages are damages paid to the plaintiff in order to punish the defendant, not to compensate the plaintiff. ​

What constitutes satisfactory performance in a contract? ​

If a debtor tells a creditor "I am ready to pay you now," a sufficient tender of payment has been made.

An offer to pay money in satisfaction of a debt or claim when one has the ability to pay is a . ​

A debt that has been prohibited from collection by a statute of limitations can never be revived.

​ A f orce majeure clause in a contract is a contract provision that excuses performance by a party when:

If performance in a contract becomes extremely difficult after the contract is formed, it automatically discharges the contract. ​

Which of the following statements best describes specific performance? ​

Which of the following statements is true of statutes of limitations?

If an act is legal at the time of entering a contract but is subsequently made illegal, the contract is discharged. ​

​ The rescission of a contract releases an aggrieved party from all obligations that are yet to be performed

​ If a party intentionally and without the consent of the other party alters a written contract, the other innocent party is discharged.

Which of the following is an example of a contract discharged by impossibility of performance? ​

When a contract contains the words "time is of the essence," which of the following is true? ​

​ When a court orders for specific performance, it is exercising its equity powers.

If a contract calls for personal services, the death or physical incapacity of the person to perform such services discharges the contract. ​

In which of the following cases will a court refuse to enforce the provision of liquidated damages on a party?

​ In a written contract, Sheldon agreed to tutor the children of Mrs. Smith for a certain period of time. However, Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments of his. In this case, there has been a(n):

A breach of contract by one of the parties bound on a contract immediately terminates the contract. ​

Introduction to Law

Courts and Court Procedures

Business Torts and Crimes

Government Regulation of Business

Nature and Classes of Contracts

Offer and Acceptance

Capacity to Contract

Consideration

Defective Agreements

Illegal Agreements

Written Contracts

Third Parties and Contracts

Nature of Personal Property

Special Bailments

Sales of Personal Property

Formalities of a Sale

Transfer of Title and Risk in Sales Contracts

Warranties Product Liability and Consumer Protection

Nature of Negotiable Instruments

Essentials of Negotiability

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties, Holders in Due Course and Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Introduction to Business Organizations

Creation and Operation of a Partnership

Dissolution of a Partnership

Nature of a Corporation

Ownership of a Corporation

Management and Dissolution of a Corporation

Principles of Insurance

Types of Insurance

Security Devices

Bankruptcy

Nature of Real Property

Transfer of Real Property

Real Estate Mortgages

Landlord and Tenant

Wills Inheritances and Trust

Filters

Punitive damages are damages paid to the plaintiff in order to punish the defendant, not to compensate the plaintiff.

What constitutes satisfactory performance in a contract?

An offer to pay money in satisfaction of a debt or claim when one has the ability to pay is a .

A f orce majeure clause in a contract is a contract provision that excuses performance by a party when:

If performance in a contract becomes extremely difficult after the contract is formed, it automatically discharges the contract.

Which of the following statements best describes specific performance?

If an act is legal at the time of entering a contract but is subsequently made illegal, the contract is discharged.

The rescission of a contract releases an aggrieved party from all obligations that are yet to be performed

If a party intentionally and without the consent of the other party alters a written contract, the other innocent party is discharged.

Which of the following is an example of a contract discharged by impossibility of performance?

When a contract contains the words "time is of the essence," which of the following is true?

When a court orders for specific performance, it is exercising its equity powers.

If a contract calls for personal services, the death or physical incapacity of the person to perform such services discharges the contract.

In a written contract, Sheldon agreed to tutor the children of Mrs. Smith for a certain period of time. However, Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments of his. In this case, there has been a(n):

A breach of contract by one of the parties bound on a contract immediately terminates the contract.