Question 1

A court:

Accepted Answer

A)  will enforce any express conditions intended by the parties. 
B)  may refuse to enforce an express condition intended by the parties if the court determines it is unfair and harmful to the general public. 
C)  requires strict performance if a clause of the contract expressly demands it. 
D)  applies an objective standard whenever ruling on a personal satisfaction contract. 
A)  will enforce any express conditions intended by the parties. 
B)  may refuse to enforce an express condition intended by the parties if the court determines it is unfair and harmful to the general public. 
C)  requires strict performance if a clause of the contract expressly demands it. 
D)  applies an objective standard whenever ruling on a personal satisfaction contract.

Question 2

A wholesaler of coffee notifies a retailer that it cannot fulfill its contractual obligation to deliver 1,000 pounds of coffee at the agreed upon price of $2.00 per pound next month because of recent price increases in coffee.The retailer may treat the wholesaler as having breached the contract and sue for damages even though the wholesaler's performance is not due until next month.

Accepted Answer

A) True 
 B)False

Question 3

Sea Rovers,Inc.contracted to sell 1,000 pounds of shrimp to the Seafood Shack with delivery on June 1.On May 1 Sea Rovers advised the Seafood Shack that it would not be able to deliver the shrimp.The Seafood Shack:

Accepted Answer

A)  can sue Sea Rovers immediately for breach of contract. 
B)  must wait until June 1 to see if Sea Rovers will perform before suing for breach of contract. 
C)  cannot sue Sea Rovers because Sea Rovers gave adequate notice. 
D)  must wait until actual damages are determined before it can sue. 
A)  can sue Sea Rovers immediately for breach of contract. 
B)  must wait until June 1 to see if Sea Rovers will perform before suing for breach of contract. 
C)  cannot sue Sea Rovers because Sea Rovers gave adequate notice. 
D)  must wait until actual damages are determined before it can sue.

Question 4

Melody is a recent graduate of State Law School.She lands an impressive employment contract with the firm of Dewey,Cheathem,and Howe,Attorneys at Law,on the stated provision that she pass the upcoming bar exam.This provision in the employment agreement is a(n):

Accepted Answer

A)  condition precedent. 
B)  condition subsequent. 
C)  implied condition. 
D)  concurrent condition. 
A)  condition precedent. 
B)  condition subsequent. 
C)  implied condition. 
D)  concurrent condition.

Question 5

A court may,at times,discharge a party who has not performed.

Accepted Answer

A) True 
 B)False

Question 6

Buddy was hired to play drums for a rock group scheduled to tour the Midwest.Part way through the tour,Buddy was tragically killed in a plane crash.The tour had to be discontinued until a new drummer could be found.The band lost money on the tour.Is Buddy's estate or agent responsible for the loss to the band?

Accepted Answer

True impossibility of performance termin

Question 7

Irving is shopping at the local Computers R Us store and agrees to buy a computer for his home "on the condition of personal satisfaction." If Irving takes the computer back to the store stating that he doesn't like the computer,then the seller must accept the return of the computer and terminate the contract.

Accepted Answer

A) True 
 B)False

Question 8

Most contracts are discharged by mutual agreement of the parties.

Accepted Answer

A) True 
 B)False

Question 9

A condition:

Accepted Answer

A)  is created only when the phrase "provided that" or a similar phrase introduces it. 
B)  is an event that must occur before a party becomes obligated under a contract. 
C)  must be expressly stated, although it can be created by informal language. 
D)  will not be enforced by the courts unless formal language is used, regardless of the intent of the parties to create a condition. 
A)  is created only when the phrase "provided that" or a similar phrase introduces it. 
B)  is an event that must occur before a party becomes obligated under a contract. 
C)  must be expressly stated, although it can be created by informal language. 
D)  will not be enforced by the courts unless formal language is used, regardless of the intent of the parties to create a condition.

Question 10

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 11

Dodger bought an insurance contract from Liberty Farm Co.The policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred.Time is stated to be of the essence.Dodger sustained a covered farm loss,but did not report it to Liberty Farm until 50 days later.Liberty Farm denied coverage for the claim.If Dodger sues,who wins?

Accepted Answer

A)  Dodger wins; the contract was substantially performed. 
B)  Liberty Farm wins; there was failure of a condition subsequent. 
C)  Dodger wins; courts will not enforce a time-of-the-essence clause. 
D)  Liberty Farm wins; the impossibility doctrine applies. 
A)  Dodger wins; the contract was substantially performed. 
B)  Liberty Farm wins; there was failure of a condition subsequent. 
C)  Dodger wins; courts will not enforce a time-of-the-essence clause. 
D)  Liberty Farm wins; the impossibility doctrine applies.

Question 12

The distinction between a condition precedent and a condition subsequent:

Accepted Answer

A)  is important because it determines whether the burden of proof is beyond a reasonable doubt or preponderance of the evidence. 
B)  seldom arises in insurance cases. 
C)  determines who has the burden of proof. 
D)  is important because it determines whether the condition must be express or whether it can be implied. 
A)  is important because it determines whether the burden of proof is beyond a reasonable doubt or preponderance of the evidence. 
B)  seldom arises in insurance cases. 
C)  determines who has the burden of proof. 
D)  is important because it determines whether the condition must be express or whether it can be implied.

Question 13

Jackie hires Charles to lay new carpet in her bedroom.Charles does such a bad job,that the only way to fix the carpet is to start over and relay the carpet.Which of the following best describes this situation?

Accepted Answer

A)  This is substantial performance. Jackie must still pay something to Charles. 
B)  This is a material breach. Jackie must still pay something to Charles. 
C)  This is substantial performance. Jackie owes nothing to Charles. 
D)  This is a material breach. Jackie owes nothing to Charles. 
A)  This is substantial performance. Jackie must still pay something to Charles. 
B)  This is a material breach. Jackie must still pay something to Charles. 
C)  This is substantial performance. Jackie owes nothing to Charles. 
D)  This is a material breach. Jackie owes nothing to Charles.

Question 14

The Grand Performance Hall is in the process of remodeling and is scheduled to open for business after being closed for 50 years.As part of the remodeling,it is installing a new sound system.The sound system is to be installed by Sound Systems,Inc.on or before April 10.Opening night of the hall is May 1.The contract states that "time is of the essence" because of the opening-night deadline.Sound Systems has some financial difficulties and doesn't deliver the system until April 20.Grand Hall refuses to accept it,and Sound Systems sues.What result?

Accepted Answer

A)  Grand Hall wins; the contract date was strictly enforceable. 
B)  Sound Systems wins; the contract was substantially performed. 
C)  Grand Hall wins; there was commercial frustration. 
D)  Sound Systems wins; there was a true impossibility. 
A)  Grand Hall wins; the contract date was strictly enforceable. 
B)  Sound Systems wins; the contract was substantially performed. 
C)  Grand Hall wins; there was commercial frustration. 
D)  Sound Systems wins; there was a true impossibility.

Question 15

In negotiating the purchase of a vehicle,the sales representative told Karla,"I guarantee that you will be personally satisfied with this car." The guarantee was written on the contract when Karla purchased the car.If a controversy arises over Karla's satisfaction,the court will apply a subjective standard,which means Karla's judgment must be reasonable.

Accepted Answer

A) True 
 B)False

Question 16

Alice signs a contract with Bob to buy Bob's house for $150,000,with the clause,"if I am able to obtain a mortgage loan for $125,000,at no more than 7% interest,payable over 15 years." Assume that Alice tries but is unable to obtain the described loan,and therefore refuses to proceed with the purchase.Alice is in breach of the contract.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following events would probably excuse performance of a contract based on commercial impracticability?

Accepted Answer

A)  The price of a raw material increases slightly so that the contract will not be as profitable. 
B)  An unforeseeable trade embargo causes prices to triple. 
C)  The promisor of personal services dies. 
D)  The subject matter of the contract is destroyed. 
A)  The price of a raw material increases slightly so that the contract will not be as profitable. 
B)  An unforeseeable trade embargo causes prices to triple. 
C)  The promisor of personal services dies. 
D)  The subject matter of the contract is destroyed.

Question 18

The statement,"You will have a job with Snelling & Snelling as long as you complete your degree in business administration this May" does not create a condition because it does not include the phrase "provided that."

Accepted Answer

A) True 
 B)False

Question 19

Linda agrees to buy Missy's Greyhound race dog for $2,000.Linda is to deliver the money and take possession of the dog the next morning.That night,running his best race ever,the dog runs away from Missy,never to be seen again.

Accepted Answer

A)  Linda must give $2000 for the dog, but only if the dog was insured. 
B)  Linda must give $2000 for the dog, but only if Missy can find a replacement dog within a reasonable time. 
C)  Linda must give $2000 for the dog. 
D)  None of the above; the contract duties are discharged. 
A)  Linda must give $2000 for the dog, but only if the dog was insured. 
B)  Linda must give $2000 for the dog, but only if Missy can find a replacement dog within a reasonable time. 
C)  Linda must give $2000 for the dog. 
D)  None of the above; the contract duties are discharged.

Question 20

Abdulla hired Granite Construction to build an addition onto his home.Granite Construction dug the foundation but then abandoned the project.Granite Construction is entitled to receive the full contract price minus the value of the defects.

Accepted Answer

A) True 
 B)False

Exam 17: Performance And Discharge

A court:

Sea Rovers,Inc.contracted to sell 1,000 pounds of shrimp to the Seafood Shack with delivery on June 1.On May 1 Sea Rovers advised the Seafood Shack that it would not be able to deliver the shrimp.The Seafood Shack:

Melody is a recent graduate of State Law School.She lands an impressive employment contract with the firm of Dewey,Cheathem,and Howe,Attorneys at Law,on the stated provision that she pass the upcoming bar exam.This provision in the employment agreement is a(n):

A court may,at times,discharge a party who has not performed.

Most contracts are discharged by mutual agreement of the parties.

A condition:

Statutes of limitations:

The distinction between a condition precedent and a condition subsequent:

Jackie hires Charles to lay new carpet in her bedroom.Charles does such a bad job,that the only way to fix the carpet is to start over and relay the carpet.Which of the following best describes this situation?

Which of the following events would probably excuse performance of a contract based on commercial impracticability?

The statement,"You will have a job with Snelling & Snelling as long as you complete your degree in business administration this May" does not create a condition because it does not include the phrase "provided that."

Linda agrees to buy Missy's Greyhound race dog for $2,000.Linda is to deliver the money and take possession of the dog the next morning.That night,running his best race ever,the dog runs away from Missy,never to be seen again.

Abdulla hired Granite Construction to build an addition onto his home.Granite Construction dug the foundation but then abandoned the project.Granite Construction is entitled to receive the full contract price minus the value of the defects.

Introduction To Law

Business Ethics And Social Responsibility

Dispute Resolution

Common Law,Statutory Law,And Administrative Law

Constitutional Law

Intentional Torts And Business Torts

Negligence And Strict Liability

Crime

International Law

Introduction To Contracts

Agreement

Consideration

Legality

Capacity And Consent

Written Contracts

Third Parties

Remedies

Practical Contracts

Introduction To Sales

Ownership And Risk

Warranties And Product Liability

Performance And Remedies

Secured Transactions

Creating A Negotiable Instrument

Liability For Negotiable Instruments

Accountants' Liability

Agency Law

Employment Law

Labor Law

Starting A Business

Partnerships

Life And Death Of A Corporation

Corporate Management

Shareholders

Securities Regulation

Bankruptcy

Antitrust

Consumer Law

Environmental Law

Cyberlaw

Intellectual Property

Real Property And Tenant-landlord Law

Personal Property And Bailment

Planning For The Future: Wills,Trusts,And Insurance

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