Question 1

In the case of an anticipatory breach,

Accepted Answer

A)  you have the right to demand the other side to perform, but you will not be required to perform yourself. 
B)  you have the right to demand performance or to sue for breach. 
C)  you must wait until the actual breach occurs before you can take any steps. 
D)  the contract is declared void ab initio. 
E)  the contract is unenforceable by either party. 
A)  you have the right to demand the other side to perform, but you will not be required to perform yourself. 
B)  you have the right to demand performance or to sue for breach. 
C)  you must wait until the actual breach occurs before you can take any steps. 
D)  the contract is declared void ab initio. 
E)  the contract is unenforceable by either party. B

Question 2

When Mr.George sold his house,he rented an apartment and was forced to store some furniture until he bought another house.He attended the downtown office of Security Warehousing Ltd.and entered into a bailment contract that promised to safeguard the furniture.Four months later,his things were stolen from the warehouse,and when he asked for compensation for his loss,the company admitted it was in breach of contract,but said it was exempt from liability because of an exemption clause posted on the wall of the storage area where George had taken the furniture.The sign read "Not liable for loss due to fire or water." On these facts,which of the following would be his least successful argument to nullify the exemption clause?

Accepted Answer

A)  He failed to receive reasonable notice of the clause at the time of contract. 
B)  There has been a fundamental breach of the contract. 
C)  The Sale of Goods Act voids such an exemption clause. 
D)  On the strict construction of the clause, it doesn't cover the cause of the loss. 
E)  Such terms cannot be unilaterally imposed. 
A)  He failed to receive reasonable notice of the clause at the time of contract. 
B)  There has been a fundamental breach of the contract. 
C)  The Sale of Goods Act voids such an exemption clause. 
D)  On the strict construction of the clause, it doesn't cover the cause of the loss. 
E)  Such terms cannot be unilaterally imposed. C

Question 3

Which of the following would most likely result in the court's finding that the contract had been discharged by frustration?

Accepted Answer

A)  Lowe contracted to purchase a business from Lerner, but the interest rates jumped so quickly that, even before closing, he realized he would lose money, so he told Lerner he couldn't go ahead with it. 
B)  Thornburn agreed to buy Patterson's tulip crop, but unknown to both of them, at the time of the contract the crop had been destroyed by the frost. 
C)  Lee Ltd. agrees to haul lumber for Len Lumberjack, but a few days before the delivery date the company's best truck, the one they wanted to use, broke down. 
D)  N. Yung contracts to give a performance at B.C. Place stadium, but the performance was cancelled because he was poisoned by contaminated food at a local restaurant. 
E)  Mellowcream Ltd. contracted to deliver 40 dozen donuts to Pat's Place, but called Pat and told her it couldn't deliver because another customer needed another 40 dozen for an unexpected event. 
A)  Lowe contracted to purchase a business from Lerner, but the interest rates jumped so quickly that, even before closing, he realized he would lose money, so he told Lerner he couldn't go ahead with it. 
B)  Thornburn agreed to buy Patterson's tulip crop, but unknown to both of them, at the time of the contract the crop had been destroyed by the frost. 
C)  Lee Ltd. agrees to haul lumber for Len Lumberjack, but a few days before the delivery date the company's best truck, the one they wanted to use, broke down. 
D)  N. Yung contracts to give a performance at B.C. Place stadium, but the performance was cancelled because he was poisoned by contaminated food at a local restaurant. 
E)  Mellowcream Ltd. contracted to deliver 40 dozen donuts to Pat's Place, but called Pat and told her it couldn't deliver because another customer needed another 40 dozen for an unexpected event. D

Question 4

Which of the following statements is true with respect to the law of damages?

Accepted Answer

A)  Damages are intended to punish the wrongdoer for breaching the contract. 
B)  Damages are awarded for a breach of a condition but not for a breach of warranty. 
C)  If a contract contains a liquidated damages clause, the party who has breached the contract has agreed to pay to the party wronged an amount equal to all the loss that directly and naturally flows from the breach. 
D)  Damages are an order from the court for the breaching party to perform the contract as he or she agreed to do. 
E)  A deposit is an amount of money a party to a contract agrees to forfeit if he or she breaches the contract. 
A)  Damages are intended to punish the wrongdoer for breaching the contract. 
B)  Damages are awarded for a breach of a condition but not for a breach of warranty. 
C)  If a contract contains a liquidated damages clause, the party who has breached the contract has agreed to pay to the party wronged an amount equal to all the loss that directly and naturally flows from the breach. 
D)  Damages are an order from the court for the breaching party to perform the contract as he or she agreed to do. 
E)  A deposit is an amount of money a party to a contract agrees to forfeit if he or she breaches the contract.

Question 5

Victims of breach have a duty to mitigate damages,meaning they must do what they can to keep those damages as low as possible.

Accepted Answer

A) True 
 B)False

Question 6

Lack of financial ability,if proven,will establish frustration.

Accepted Answer

A) True 
 B)False

Question 7

In which of the following situations would the contract not be discharged by agreement?

Accepted Answer

A)  Both parties agree to let a new person be substituted into the contract in place of one of the old parties. 
B)  Both parties to the contract agree to call it off before either one has performed. 
C)  A condition subsequent that calls for termination of the contract has not been met. 
D)  The two parties have reached "accord and satisfaction" with regard to terminating the contract. 
E)  Both parties agree to call off the contract under which one paid the other $5000 for work that has not yet been performed, but the other now promises to return the $5000. 
A)  Both parties agree to let a new person be substituted into the contract in place of one of the old parties. 
B)  Both parties to the contract agree to call it off before either one has performed. 
C)  A condition subsequent that calls for termination of the contract has not been met. 
D)  The two parties have reached "accord and satisfaction" with regard to terminating the contract. 
E)  Both parties agree to call off the contract under which one paid the other $5000 for work that has not yet been performed, but the other now promises to return the $5000.

Question 8

Carson arranged with his brother-in-law,Waxman,that he would try to buy a famous old B.C.coastal airplane,the Spruce Ghost,which Waxman would then buy from him to display in his flight museum.Waxman promised to pay Carson a 10 percent commission over the price that Carson had to pay to buy the plane,so that their price would be 110 percent of Carson's purchase price.Carson and the owner,Wonka,agreed on a price of $80 000.After reconditioning the plane but before delivering it to Carson,Wonka decided to take it up for one last nostalgic flight and,because of his carelessness,he crashed it on take-off.Although Wonka escaped uninjured,the plane caught fire and was totally destroyed.Carson was able to locate a similar plane for only $60 000 but Waxman wasn't interested.Carson sued his brother-in-law and Wonka.What is the likely outcome of this suit?

Accepted Answer

A)  Waxman will have to pay Carson $8000, the commission on the agreed sale price between Carson and Wonka. 
B)  Waxman will have to pay Carson $6000 as the commission he would have made on the purchase of the second plane. 
C)  Wonka will have to pay Carson damages (probably $8000) for breach of contract. 
D)  Because the contract between Carson and Wonka was frustrated by the destruction of the Spruce Ghost, Carson has no claim against anyone. 
E)  The Frustrated Contracts Act will require Carson to share in the expense of reconditioning the Spruce Ghost that Wonka had undertaken in preparation for sale. 
A)  Waxman will have to pay Carson $8000, the commission on the agreed sale price between Carson and Wonka. 
B)  Waxman will have to pay Carson $6000 as the commission he would have made on the purchase of the second plane. 
C)  Wonka will have to pay Carson damages (probably $8000) for breach of contract. 
D)  Because the contract between Carson and Wonka was frustrated by the destruction of the Spruce Ghost, Carson has no claim against anyone. 
E)  The Frustrated Contracts Act will require Carson to share in the expense of reconditioning the Spruce Ghost that Wonka had undertaken in preparation for sale.

Question 9

"Clean hands" refers to the absence of wrongdoing on the part of a person seeking an equitable remedy.

Accepted Answer

A) True 
 B)False

Question 10

Smedlap,a trucker,and Dewdney,a farmer,entered into a contract under which Smedlap agreed to haul all of Dewdney's 2011 pumpkin crop to market in time for the Halloween sales.However,the day before Smedlap was to pick up the pumpkins,he called Dewdney and told him that,since he had received such a good offer to buy his truck,he had sold it and therefore was not able to haul Dewdney's pumpkins.There was not enough time for Smedlap to buy another truck,but he was sure that Dewdney could make other arrangements and he hoped that he hadn't unduly inconvenienced him.Unfortunately,Dewdney was not able to make arrangements in time for the Halloween market,and instead he had to sell his crop to a pie-filling canner for much less than he could reasonably have expected at the market.Furthermore,the market owners were so disappointed by Dewdney's failure to deliver that they refused to give him their usual order for Christmas turkeys,in contrast to previous years,where this had generated his major income for the year.He was forced to find another outlet for his turkeys,and again he ended up selling to commercial processors for a substantially lower price.As a result of these two events,Dewdney was unable to keep up his mortgage payments on the farm and eventually he lost it to the bank in a foreclosure action.Dewdney is now suing Smedlap to recover these losses.Identify the correct statement with respect to the question of whether Smedlap's conduct was a breach of contract.

Accepted Answer

A)  Smedlap simply cancelled the contract, which he was entitled to do as long as it was before performance was due. 
B)  This was not a breach because Smedlap did not do it maliciously, and he gave Dewdney what he honestly believed was adequate notice to make other arrangements. 
C)  The contract was discharged by frustration. 
D)  Smedlap is not liable because it was not his fault that Dewdney was unable to make other suitable arrangements. 
E)  This was a breach that consisted of self-induced frustration. 
A)  Smedlap simply cancelled the contract, which he was entitled to do as long as it was before performance was due. 
B)  This was not a breach because Smedlap did not do it maliciously, and he gave Dewdney what he honestly believed was adequate notice to make other arrangements. 
C)  The contract was discharged by frustration. 
D)  Smedlap is not liable because it was not his fault that Dewdney was unable to make other suitable arrangements. 
E)  This was a breach that consisted of self-induced frustration.

Question 11

"When the court determines that a breach of contract has taken place,they will award monetary compensation in the form of damages to put the person in the position he would have been in had the contract been properly performed." Discuss the accuracy of this statement.

Accepted Answer

The statement is accurate.When

Question 12

Explain what is meant by "specific performance" in contract law.

Accepted Answer

This is an order by the courts

Question 13

Sam agreed to manufacture and supply 25 specially adapted computers for Joe to use for simulated horse racing in his string of hotels throughout the province.Unfortunately,after Sam almost completed the computers,the province passed a law prohibiting the manufacture and sale of these kinds of machines.Joe had paid a deposit of $5000,but Sam had incurred $30 000 of expenses in manufacturing these machines.The total purchase price agree upon between these parties was $50 000.Joe sued Sam for the return of his $5000 deposit.Sam,in turn,sued Joe for a contribution towards his loss.Discuss the legal position of the parties.

Accepted Answer

The effect will vary to some extent with

Question 14

Which of the following is true with regard to remedies for breach of contract?

Accepted Answer

A)  The quantum (amount) of damages to be given to the victim of the breach may be limited to the amount specified in a liquidated damages clause of her contract. 
B)  The victim of a breach can recover damages that he could have avoided if he had tried to mitigate his loss. 
C)  A person who breaches a contract is liable for all the loss that directly and naturally flows from the breach, no matter how unforeseeable. 
D)  An injunction is an equitable remedy forcing a person to comply with the terms of the contract. 
E)  Specific performance is the proper remedy to stop a person from doing something that he had promised in the contract not to do-e.g., not to compete, not to disclose secrets, etc. 
A)  The quantum (amount) of damages to be given to the victim of the breach may be limited to the amount specified in a liquidated damages clause of her contract. 
B)  The victim of a breach can recover damages that he could have avoided if he had tried to mitigate his loss. 
C)  A person who breaches a contract is liable for all the loss that directly and naturally flows from the breach, no matter how unforeseeable. 
D)  An injunction is an equitable remedy forcing a person to comply with the terms of the contract. 
E)  Specific performance is the proper remedy to stop a person from doing something that he had promised in the contract not to do-e.g., not to compete, not to disclose secrets, etc.

Question 15

Pat O'Grady owes Robinson $5000 in cash,but resented Robinson talking about O'Grady's debt among mutual acquaintances.O'Grady wants to know which of the following tactics would be legal performance.

Accepted Answer

A)  Deliver the money to his house instead of to his office at 3:00 a.m. on the due date. 
B)  Not pay Robinson until Robinson came for it. 
C)  Pay Robinson on time but pay it all in dimes. 
D)  Pay him on time but with a cheque. 
E)  Pay him on time in $5 bills. 
A)  Deliver the money to his house instead of to his office at 3:00 a.m. on the due date. 
B)  Not pay Robinson until Robinson came for it. 
C)  Pay Robinson on time but pay it all in dimes. 
D)  Pay him on time but with a cheque. 
E)  Pay him on time in $5 bills.

Question 16

To what does the "construction approach" refer?

Accepted Answer

In situations of fun

Question 17

Specific performance involves a court order to do something (to perform the contract),whereas a(n)___________ usually involves an order to refrain from some offensive conduct.

Accepted Answer

A)  injunction 
B)  damages award 
C)  equitable remedy 
D)  quantum meruit award 
E)  limitation period 
A)  injunction 
B)  damages award 
C)  equitable remedy 
D)  quantum meruit award 
E)  limitation period

Question 18

Which of the following would most likely result in the court finding the contract had been discharged by frustration?

Accepted Answer

A)  Cooper contracts to deliver ten bushels of ripe tomatoes to Haig's restaurant, and Cooper's tomato crop is destroyed by hail a few days before the delivery date. 
B)  McGee contracts to give a lecture at a convention on modern marketing, but the convention was cancelled because of an epidemic. 
C)  Moore, a sculptor, was delivering a $15 000 work when he lost control of the car and the work was crushed. He had been drinking heavily and had not bothered to wrap or box the work. 
D)  Binks agreed to purchase the business from Kealy, but Binks suffered such great losses in the recent stock market crash that he couldn't afford to go through with it. 
E)  McDonald agreed to buy Thornburn's horse, but unknown to both of them, at the time of the contract the horse was dead. 
A)  Cooper contracts to deliver ten bushels of ripe tomatoes to Haig's restaurant, and Cooper's tomato crop is destroyed by hail a few days before the delivery date. 
B)  McGee contracts to give a lecture at a convention on modern marketing, but the convention was cancelled because of an epidemic. 
C)  Moore, a sculptor, was delivering a $15 000 work when he lost control of the car and the work was crushed. He had been drinking heavily and had not bothered to wrap or box the work. 
D)  Binks agreed to purchase the business from Kealy, but Binks suffered such great losses in the recent stock market crash that he couldn't afford to go through with it. 
E)  McDonald agreed to buy Thornburn's horse, but unknown to both of them, at the time of the contract the horse was dead.

Question 19

When a court determines that a breach of contract has taken place and awards damages,what is the purpose of such an award?

Accepted Answer

To provide compensat

Question 20

In B.C.,Mr.Buyer sued Mr.Seller for breach of contract because Mr.Seller failed to deliver a computer system on time in accordance with the contract.Mr.Seller argued that he was not in breach; that the contract had been frustrated.The computer was destroyed by water when a careless driver knocked over a fire hydrant outside the warehouse holding the computer.No deposit had been paid.The court held that the contract was frustrated.Given this ruling,how does the court handle the situation?

Accepted Answer

A)  Buyer will succeed against Seller for damages because the court will treat it as if were an anticipatory breach. 
B)  The court will let the losses lie where they fell, despite any of Seller's costs in preparing the computer system. 
C)  Buyer will not have to pay anything to Seller unless Seller had requested a deposit at the time of contract. 
D)  The court will look at the costs incurred and any payments made, and will apportion the losses between the parties. 
E)  The court will treat the contract as if there were a common mistake about the existence of the subject matter. 
A)  Buyer will succeed against Seller for damages because the court will treat it as if were an anticipatory breach. 
B)  The court will let the losses lie where they fell, despite any of Seller's costs in preparing the computer system. 
C)  Buyer will not have to pay anything to Seller unless Seller had requested a deposit at the time of contract. 
D)  The court will look at the costs incurred and any payments made, and will apportion the losses between the parties. 
E)  The court will treat the contract as if there were a common mistake about the existence of the subject matter.

In the case of an anticipatory breach,

Which of the following would most likely result in the court's finding that the contract had been discharged by frustration?

Which of the following statements is true with respect to the law of damages?

Victims of breach have a duty to mitigate damages,meaning they must do what they can to keep those damages as low as possible.

Lack of financial ability,if proven,will establish frustration.

In which of the following situations would the contract not be discharged by agreement?

"Clean hands" refers to the absence of wrongdoing on the part of a person seeking an equitable remedy.

"When the court determines that a breach of contract has taken place,they will award monetary compensation in the form of damages to put the person in the position he would have been in had the contract been properly performed." Discuss the accuracy of this statement.

Explain what is meant by "specific performance" in contract law.

Which of the following is true with regard to remedies for breach of contract?

Pat O'Grady owes Robinson $5000 in cash,but resented Robinson talking about O'Grady's debt among mutual acquaintances.O'Grady wants to know which of the following tactics would be legal performance.

To what does the "construction approach" refer?

Specific performance involves a court order to do something (to perform the contract),whereas a(n)___________ usually involves an order to refrain from some offensive conduct.

Which of the following would most likely result in the court finding the contract had been discharged by frustration?

When a court determines that a breach of contract has taken place and awards damages,what is the purpose of such an award?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputesthe Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contractconsensus and Consideration

The Elements of a Contract capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

Employment

Agency and Partnership

Corporations

Real, Personal, and Intellectual Property

Information Technology and the Internet

Sales and Consumer Protection

Priority of Creditors

Filters

Exam 9: The End of the Contractual Relationship

In the case of an anticipatory breach,

Which of the following would most likely result in the court's finding that the contract had been discharged by frustration?

Which of the following statements is true with respect to the law of damages?

Victims of breach have a duty to mitigate damages,meaning they must do what they can to keep those damages as low as possible.

Lack of financial ability,if proven,will establish frustration.

In which of the following situations would the contract not be discharged by agreement?

"Clean hands" refers to the absence of wrongdoing on the part of a person seeking an equitable remedy.

"When the court determines that a breach of contract has taken place,they will award monetary compensation in the form of damages to put the person in the position he would have been in had the contract been properly performed." Discuss the accuracy of this statement.

Explain what is meant by "specific performance" in contract law.

Which of the following is true with regard to remedies for breach of contract?

Pat O'Grady owes Robinson $5000 in cash,but resented Robinson talking about O'Grady's debt among mutual acquaintances.O'Grady wants to know which of the following tactics would be legal performance.

To what does the "construction approach" refer?

Specific performance involves a court order to do something (to perform the contract),whereas a(n)___________ usually involves an order to refrain from some offensive conduct.

Which of the following would most likely result in the court finding the contract had been discharged by frustration?

When a court determines that a breach of contract has taken place and awards damages,what is the purpose of such an award?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputesthe Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contractconsensus and Consideration

The Elements of a Contract capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

Employment

Agency and Partnership

Corporations

Real, Personal, and Intellectual Property

Information Technology and the Internet

Sales and Consumer Protection

Priority of Creditors

Filters