Question 1

A breach of contract always gives rise to a cause of action for damages by the injured party.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following is 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 the above 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 the above are correct. B

Question 3

If the performance of a contract that was legal when formed becomes illegal because of a subsequently enacted law, the duty of performance is discharged.

Accepted Answer

A) True 
 B)False  True

Question 4

An implied-in-law condition must be fully performed.

Accepted Answer

A) True 
 B)False

Question 5

A(n) __________ is a contract between a promisee and a promisor by which the promisee agrees to accept and the promisor agrees to render a substituted performance in satisfaction of an existing contractual duty.

Accepted Answer

A) accord 
B) mutual rescission 
C) material alteration 
D) novation 
A) accord 
B) mutual rescission 
C) material alteration 
D) novation

Question 6

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 VCR but he may return the VCR within ten days and get all of his money back. 
C) Both (a) and (b) are examples of a condition subsequent. 
D) Neither (a) nor (b) is an example of a 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 VCR but he may return the VCR within ten days and get all of his money back. 
C) Both (a) and (b) are examples of a condition subsequent. 
D) Neither (a) nor (b) is an example of a condition subsequent.

Question 7

Substituted contracts immediately discharge the original contracts.

Accepted Answer

A) True 
 B)False

Question 8

Robert and John entered into a bilateral contract and Robert has fully performed.Their mutual rescission of the contract is binding at common law.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Unless one of the parties contractually assumes the risk, the __________ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible.

Accepted Answer

A) bankruptcy law 
B) frustration of purpose doctrine 
C) perfect tender rule 
D) impossibility of performance doctrine 
A) bankruptcy law 
B) frustration of purpose doctrine 
C) perfect tender rule 
D) impossibility of performance doctrine

Question 11

An accord and satisfaction discharges the original duty.

Accepted Answer

A) True 
 B)False

Question 12

Jim contracted with Kevin to serve as a guide for Kevin on his three-week fishing trip to Canada.The contract was made on April 1 with the trip to begin on June 1.On May 1, Kevin notified Jim that he had changed his mind and would be unable to make the trip.He also refused to pay Jim any compensation.In this situation:

Accepted Answer

A) because the contract is executory, Jim has suffered no damages, and Kevin has no obligation to pay any compensation. 
B) Kevin has anticipatorily repudiated the contract and is liable to Jim for damages. 
C) Jim may wait until June 1 to see if Kevin will perform his contractual duties and, if he does not, there is a material breach. 
D) both (b) and (c) above are correct. 
A) because the contract is executory, Jim has suffered no damages, and Kevin has no obligation to pay any compensation. 
B) Kevin has anticipatorily repudiated the contract and is liable to Jim for damages. 
C) Jim may wait until June 1 to see if Kevin will perform his contractual duties and, if he does not, there is a material breach. 
D) both (b) and (c) above are correct.

Question 13

Which of the following is true with respect to substantial performance?

Accepted Answer

A) It has particular importance in the construction industry. 
B) Substantial performance does not defeat the purpose of the contract. 
C) When one party to a contract has substantially performed, the other party cannot recover damages for the imperfect performance. 
D) All of the above. 
E) Two of the above, (a) and (b) are correct. 
A) It has particular importance in the construction industry. 
B) Substantial performance does not defeat the purpose of the contract. 
C) When one party to a contract has substantially performed, the other party cannot recover damages for the imperfect performance. 
D) All of the above. 
E) Two of the above, (a) and (b) are correct.

Question 14

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 15

A(n) __________ is a substituted contract that involves an agreement among three parties to substitute a new promisee in place of an existing promisee, or to replace an existing promisor with a new one.

Accepted Answer

A) accord 
B) satisfaction 
C) novation 
D) mutual rescission 
A) accord 
B) satisfaction 
C) novation 
D) mutual rescission

Question 16

Paul, a contractor, has a contract to build a new office building for Bill.The contract contains a provision requiring Paul to furnish a certificate of occupancy from the building inspector before Bill is required to pay.This provision is:

Accepted Answer

A) an express condition. 
B) an implied-in-fact condition. 
C) an implied-in-law condition. 
D) a condition subsequent. 
A) an express condition. 
B) an implied-in-fact condition. 
C) an implied-in-law condition. 
D) a condition subsequent.

Question 17

The Code greatly alters the common law doctrine of material breach by adopting what is known as the:

Accepted Answer

A) perfect tender rule. 
B) anticipatory repudiation rule. 
C) prevention of performance rule. 
D) discharge by operation of law rule. 
A) perfect tender rule. 
B) anticipatory repudiation rule. 
C) prevention of performance rule. 
D) discharge by operation of law rule.

Question 18

An express condition may be preceded by which of the following terms?

Accepted Answer

A) While. 
B) After. 
C) Provided that. 
D) All of the above. 
A) While. 
B) After. 
C) Provided that. 
D) All of the above.

Question 19

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

Question 20

A contract may condition the performance of a party upon the approval of a third party.

Accepted Answer

A) True 
 B)False

Exam 17: Performance, Breach, and Discharge

A breach of contract always gives rise to a cause of action for damages by the injured party.

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

If the performance of a contract that was legal when formed becomes illegal because of a subsequently enacted law, the duty of performance is discharged.

An implied-in-law condition must be fully performed.

A(n) __________ is a contract between a promisee and a promisor by which the promisee agrees to accept and the promisor agrees to render a substituted performance in satisfaction of an existing contractual duty.

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

Substituted contracts immediately discharge the original contracts.

Robert and John entered into a bilateral contract and Robert has fully performed.Their mutual rescission of the contract is binding at common law.

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

Unless one of the parties contractually assumes the risk, the __________ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible.

An accord and satisfaction discharges the original duty.

Which of the following is true with respect to substantial performance?

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

A(n) __________ is a substituted contract that involves an agreement among three parties to substitute a new promisee in place of an existing promisee, or to replace an existing promisor with a new one.

Paul, a contractor, has a contract to build a new office building for Bill.The contract contains a provision requiring Paul to furnish a certificate of occupancy from the building inspector before Bill is required to pay.This provision is:

The Code greatly alters the common law doctrine of material breach by adopting what is known as the:

An express condition may be preceded by which of the following terms?

Bob, the 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:

A contract may condition the performance of a party upon the approval of a third party.

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

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

Filters