Question 1

An unauthorized alteration of ANY of the material terms in a written contract discharges the entire contract.

Accepted Answer

A) True 
 B)False  True

Question 2

If a party's principal reason for a contract is substantially impaired without his fault by the occurrence of an unexpected event, that party's remaining duties to render performance are discharged due to the doctrine of:

Accepted Answer

A)  frustration of purpose 
B)  subjective impossibility 
C)  objective impossibility 
D)  commercial impracticability 
A)  frustration of purpose 
B)  subjective impossibility 
C)  objective impossibility 
D)  commercial impracticability A

Question 3

What is a condition? Give an example of each of the following types of conditions: condition precedent, condition concurrent, conditions subsequent.

Accepted Answer

A condition is an uncertain event that affects the duty of performance. Condition precedent-If William is to buy Anna's land for $50,000, provided William can obtain financing in the amount of $40,000 at no more than 7% interest, the obtaining of financing at no more than 7% interest is a condition precedent. Condition concurrent-If Arnold has contracted to sell Brian a watch for $10, with delivery and payment to take place at the same time, the obligation to pay for the watch is a condition concurrent with the obligation to turn over the watch to Brian. Condition subsequent-Where goods are sold under terms of "sale or return," the buyer has the right to return the goods to the seller within a stated period, but is under an immediate duty to pay the price unless credit has been agreed upon. The duty to pay the price is terminated by a return of the goods, which operates as a condition subsequent.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

After the coronation of Edward VII was postponed and parties who had entered into contracts in anticipation of the event filed numerous suits, the doctrine of frustration of purpose evolved.

Accepted Answer

A) True 
 B)False

Question 6

If there is a novation, the original promisor's liability to the original promisee is relieved, even if the new promisor fails to perform.

Accepted Answer

A) True 
 B)False

Question 7

Tender is the full performance of an obligation by one party of a contract.

Accepted Answer

A) True 
 B)False

Question 8

On November 1, Paula and Roberta enter into a contract where both parties are obligated to perform on December 31. On December 1, Paula tells Roberta, "I can, in no way, perform my duties in our contract." This statement is:

Accepted Answer

A)  a material alteration. 
B)  anticipatory repudiation. 
C)  a nonmaterial breach since the statement is made before December 31. 
D)  an accord. 
A)  a material alteration. 
B)  anticipatory repudiation. 
C)  a nonmaterial breach since the statement is made before December 31. 
D)  an accord.

Question 9

The "perfect tender rule" provides that only substantial deviations from the promised performance in a sales contract under the Code constitute a material breach and discharge the aggrieved party from the duty of performance.

Accepted Answer

A) True 
 B)False

Question 10

An implied-in-law condition need only be substantially performed.

Accepted Answer

A) True 
 B)False

Question 11

Louis agreed to provide all the apples that Cindy's Cider Mill will need at $8 per bushel unless weather conditions require additional labor to be hired. The rate would then be $8.50 per bushel. A freeze warning required Louis to hire 10 additional overtime workers, raising the cost per bushel to $9.75. 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 commercially 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 commercially impracticable. 
D)  Yes, the freeze is a supervening event.

Question 12

Milt built a barn for the Lowreys, but unintentionally deviated from the agreed specifications. The contract price for Milt's work was $10,500. The barn is usable, but the damages for his deviation were $700. Identify the type of breach the courts would probably deem Milt's departure from the contract to be, and discuss the result of this type of breach.

Accepted Answer

The courts would probably hold that the

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A person who has made a financially unsound contract may be relieved from performance under the doctrine of commercial impracticability.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

Which of the following is a contract with a condition subsequent?

Accepted Answer

A)  Rhonda enters into a contract to buy a new car conditional upon her getting a loan from her bank. 
B)  Roger bought a smartphone but he may return the phone within ten days and get all of his money back. 
C)  Susanne and Ethan sign a contract to buy a new home, on the condition that their current home sale is finalized in the next 30 days. 
D)  All of these are examples of condition subsequent. 
A)  Rhonda enters into a contract to buy a new car conditional upon her getting a loan from her bank. 
B)  Roger bought a smartphone but he may return the phone within ten days and get all of his money back. 
C)  Susanne and Ethan sign a contract to buy a new home, on the condition that their current home sale is finalized in the next 30 days. 
D)  All of these are examples of condition subsequent.

Question 17

In the case of Michael Silvestri v. Optus Software, Inc., the court held:

Accepted Answer

A)  an objective standard is typically applied to satisfaction clauses in employment contracts. 
B)  an objective standard must be used in determining what is satisfactory performance in any "satisfaction" contracts. 
C)  idiosyncratic judgments as to what constitutes satisfactory employee performance are inherently unfair and should not be allowed. 
D)  in judging a high-level manager's satisfactory performance, a subjective test is appropriate. 
A)  an objective standard is typically applied to satisfaction clauses in employment contracts. 
B)  an objective standard must be used in determining what is satisfactory performance in any "satisfaction" contracts. 
C)  idiosyncratic judgments as to what constitutes satisfactory employee performance are inherently unfair and should not be allowed. 
D)  in judging a high-level manager's satisfactory performance, a subjective test is appropriate.

Question 18

The definition of "discharge by breach" is:

Accepted Answer

A)  performance that is incomplete but that does not defeat the purpose of the contract but entitles the injured party to damages. 
B)  wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party. 
C)  a breach that prevents performance by either party. 
D)  uncorrected  material  failure to perform by one party that operates as an excuse for nonperformance by the other party . 
A)  performance that is incomplete but that does not defeat the purpose of the contract but entitles the injured party to damages. 
B)  wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party. 
C)  a breach that prevents performance by either party. 
D)  uncorrected  material  failure to perform by one party that operates as an excuse for nonperformance by the other party .

Question 19

The majority of courts hold that the running of the statute of limitations operates to discharge a contract.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 17: Performance Breach and Discharge

An unauthorized alteration of ANY of the material terms in a written contract discharges the entire contract.

If a party's principal reason for a contract is substantially impaired without his fault by the occurrence of an unexpected event, that party's remaining duties to render performance are discharged due to the doctrine of:

What is a condition? Give an example of each of the following types of conditions: condition precedent, condition concurrent, conditions subsequent.

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

After the coronation of Edward VII was postponed and parties who had entered into contracts in anticipation of the event filed numerous suits, the doctrine of frustration of purpose evolved.

If there is a novation, the original promisor's liability to the original promisee is relieved, even if the new promisor fails to perform.

Tender is the full performance of an obligation by one party of a contract.

On November 1, Paula and Roberta enter into a contract where both parties are obligated to perform on December 31. On December 1, Paula tells Roberta, "I can, in no way, perform my duties in our contract." This statement is:

The "perfect tender rule" provides that only substantial deviations from the promised performance in a sales contract under the Code constitute a material breach and discharge the aggrieved party from the duty of performance.

An implied-in-law condition need only be substantially performed.

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

A person who has made a financially unsound contract may be relieved from performance under the doctrine of commercial impracticability.

Which of the following is a contract with a condition subsequent?

In the case of Michael Silvestri v. Optus Software, Inc., the court held:

The definition of "discharge by breach" is:

The majority of courts hold that the running of the statute of limitations operates to discharge a contract.

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

Introduction to Law

Business Ethics

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

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

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 Wills

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