Question 1

When a party successfully sues for an equitable remedy for a breach of contract, that party does not receive a monetary award.

Accepted Answer

A) True 
 B)False

Question 2

Each of the following is a discharge by mutual consent except:

Accepted Answer

A)  accord and satisfaction. 
B)  novation. 
C)  rescission. 
D)  frustration of purpose. 
A)  accord and satisfaction. 
B)  novation. 
C)  rescission. 
D)  frustration of purpose.

Question 3

Compensatory damages cover a broad spectrum of losses for recovery of ________ damages suffered by the nonbreaching party.

Accepted Answer

The answer of Compensatory damages cover a broad spectrum of...

Question 4

Patios R Us contracts with Karl's Concrete to have 35 yards of concrete delivered to a job site it is working on. Payment is to be made 30 days after delivery. Five days after the concrete is delivered, Patios R Us files for bankruptcy and the filing is accepted by the court. Karl's cannot sue to enforce the contract and receive payment.

Accepted Answer

A) True 
 B)False

Question 5

What is an anticipatory repudiation, and what must be shown for it to be enforced?

Accepted Answer

An anticipatory repudiation occurs when

Question 6

Unless a contract for services calls for unique personal services, that contract cannot be discharged by impossibility.

Accepted Answer

A) True 
 B)False

Question 7

Harry sees an AK-47 automatic assault rifle in a gun shop window. He inquires about the price and is told that it is $2,500. Harry signs a contract promising to pay the $2,500 on Friday, taking possession of the rifle when payment is made. On Thursday, a law is enacted making the ownership, sale, or possession of an automatic rifle illegal. This contract:

Accepted Answer

A)  automatically terminates due to impossibility. 
B)  automatically terminates due to impracticability. 
C)  automatically terminates due to frustration of purpose. 
D)  is enforceable and not affected by the new law because it was entered into before the law took effect. 
A)  automatically terminates due to impossibility. 
B)  automatically terminates due to impracticability. 
C)  automatically terminates due to frustration of purpose. 
D)  is enforceable and not affected by the new law because it was entered into before the law took effect.

Question 8

In which of the following situations is a court most likely to find substantial performance?

Accepted Answer

A)  KM Corporation orders 500 boxes of copy paper from MK supply, but MK can deliver only 450 boxes. 
B)  Young orders a set of four specially made chrome rims for her car, but the supplier can deliver only three. 
C)  Olivia orders 3 gallons of paint for the exterior of her house, based on square footage covered and needed, but the paint supplier can deliver only 2 gallons. 
D)  April orders a fully equipped car from a dealer, but although perfect in every way, the car delivered has an automatic transmission rather than the manual transmission that she ordered. 
A)  KM Corporation orders 500 boxes of copy paper from MK supply, but MK can deliver only 450 boxes. 
B)  Young orders a set of four specially made chrome rims for her car, but the supplier can deliver only three. 
C)  Olivia orders 3 gallons of paint for the exterior of her house, based on square footage covered and needed, but the paint supplier can deliver only 2 gallons. 
D)  April orders a fully equipped car from a dealer, but although perfect in every way, the car delivered has an automatic transmission rather than the manual transmission that she ordered.

Question 9

Liquidated damages must be directly related to the breach of contract they are compensating the nonbreaching party for.

Accepted Answer

A) True 
 B)False

Question 10

In which of the following scenarios would enforcement of specific performance be appropriate?

Accepted Answer

A)  Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day. 
B)  You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons. 
C)  You order a current-model name-brand television from a department store, and a few days later the store breaches by not ordering it from the manufacturer. 
D)  You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute. 
A)  Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day. 
B)  You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons. 
C)  You order a current-model name-brand television from a department store, and a few days later the store breaches by not ordering it from the manufacturer. 
D)  You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute.

Question 11

Specific performance is almost always available when a real estate contract is involved.

Accepted Answer

A) True 
 B)False

Question 12

In DiFolco v. MSNBC, a TV commentator e-mailed her supervisors indicating that she wished to have a meeting to discuss her exit from the shows and to give MSNBC ample time to replace her, but she also wrote that she wanted to be part of the MSNBC team "for a long time to come." MSNBC claimed anticipatory repudiation. The court:

Accepted Answer

A)  found DiFolco did not manifest a clear and unequivocal repudiation and ruled in her favor on the issue of anticipatory repudiation. 
B)  found DiFolco's e-mails were unambiguous in expressing her intent to leave and ruled in MSNBC's favor on the issue of anticipatory repudiation. 
C)  found DiFolco's e-mails were ambiguous but her past employment issues were sufficient to indicate refusal to perform. 
D)  dismissed DiFolco's claim and ruled that the e-mails constituted DiFolco's anticipatory repudiation. 
A)  found DiFolco did not manifest a clear and unequivocal repudiation and ruled in her favor on the issue of anticipatory repudiation. 
B)  found DiFolco's e-mails were unambiguous in expressing her intent to leave and ruled in MSNBC's favor on the issue of anticipatory repudiation. 
C)  found DiFolco's e-mails were ambiguous but her past employment issues were sufficient to indicate refusal to perform. 
D)  dismissed DiFolco's claim and ruled that the e-mails constituted DiFolco's anticipatory repudiation.

Question 13

Incidental beneficiaries are known about when the contract is entered into.

Accepted Answer

A) True 
 B)False

Question 14

Toy Tech (TT) has ordered 50,000 aluminum widgets from the Acme Widget Corporation (AWC) with delivery to be made on November 1. These widgets will be used in TT products to create toys for the holiday season. Under which circumstance may TT claim an anticipatory repudiation?

Accepted Answer

A)  The cost of aluminum has risen, lowering AWC's profit margin, yet AWC insists that it will honor the contract. 
B)  The demand for widgets has suddenly decreased, and TT isn't sure it can sell the 50,000 widgets it ordered. 
C)  AWC's sole manufacturing plant burned down on October 1, yet AWC insists that it will rebuild and honor the contract. 
D)  TT has found another manufacturer that can provide less expensive widgets of the same quality as AWC's widgets. 
A)  The cost of aluminum has risen, lowering AWC's profit margin, yet AWC insists that it will honor the contract. 
B)  The demand for widgets has suddenly decreased, and TT isn't sure it can sell the 50,000 widgets it ordered. 
C)  AWC's sole manufacturing plant burned down on October 1, yet AWC insists that it will rebuild and honor the contract. 
D)  TT has found another manufacturer that can provide less expensive widgets of the same quality as AWC's widgets.

Question 15

Burt has contracted with Mel to put a concrete driveway on Mel's property. If Burt delegates the duty of laying the driveway to Chuck and Chuck does an unacceptable job, Mel may sue Burt for damages.

Accepted Answer

A) True 
 B)False

Question 16

Damages agreed to when the contract is written and prior to any actual breach are called ________ damages.

Accepted Answer

The answer of Damages agreed to when the contract is...

Question 17

Kent Corp. (KC), a general contractor building a new dorm at a university, contracted with Fine Rugs Inc. (FRI) to have a certain grade of industrial rugs installed in the dorm. The contract price was $180,000. After the rugs were installed, KC was dissatisfied with the rug quality. FRI insisted that the rugs installed were appropriate to the contract specifications and demanded full payment. KC sends FRI a check for $120,000, which KC believes is the proper value for the rugs installed, and marks the check "Paid in Full." FRI writes "Under Protest" on the check and deposits it. FRI may now, in most states, successfully sue KC for the balance of $60,000.

Accepted Answer

A) True 
 B)False

Question 18

Sharon has contracted with Craig to buy Craig's car. She will pay $5,000 in cash, and he will provide the title and registration. They agree to meet at 10 a.m. on Wednesday to exchange their consideration. Unfortunately, Craig dies Tuesday evening.

Accepted Answer

A)  The contract automatically terminates due to impossibility caused by Craig's death. 
B)  The contract automatically terminates due to impracticability caused by Craig's death. 
C)  The contract is still valid and Craig's heirs must go through with it based on the agreed terms. 
D)  The contract is still enforceable; however, Craig's heirs may renegotiate the terms because they are now the owners of the car. 
A)  The contract automatically terminates due to impossibility caused by Craig's death. 
B)  The contract automatically terminates due to impracticability caused by Craig's death. 
C)  The contract is still valid and Craig's heirs must go through with it based on the agreed terms. 
D)  The contract is still enforceable; however, Craig's heirs may renegotiate the terms because they are now the owners of the car.

Question 19

A rescission of a contract may occur when either party chooses to end the agreement.

Accepted Answer

A) True 
 B)False

Question 20

The Chicago Cubs major-league baseball team is in the playoffs and doing well. Behind the left-field wall there is an apartment building, and the owner advertises, "Space available on the apartment building roof with a clear view of the field for the World Series. Bring a lawn chair, your radio, and a cooler and enjoy the game. Just $50 per game." Bart, a lifelong fan, answers the ad and pays the building owner $100 to reserve space for the first two games. Unfortunately, the Cubs start playing poorly and don't make it to the World Series.

Accepted Answer

A)  The building owner does not have to refund the money because Bart reserved space and the space is still there for him to use whether the games are played or not. 
B)  The building owner does not have to refund the money because it's not her fault that the Cubs didn't make it to the World Series. 
C)  Bart will get a refund because of impracticability. 
D)  Bart will get a refund because of frustration of purpose. 
A)  The building owner does not have to refund the money because Bart reserved space and the space is still there for him to use whether the games are played or not. 
B)  The building owner does not have to refund the money because it's not her fault that the Cubs didn't make it to the World Series. 
C)  Bart will get a refund because of impracticability. 
D)  Bart will get a refund because of frustration of purpose.

Exam 8: Contract Performance: Conditions, Breach, and Remedies

When a party successfully sues for an equitable remedy for a breach of contract, that party does not receive a monetary award.

Each of the following is a discharge by mutual consent except:

Compensatory damages cover a broad spectrum of losses for recovery of ________ damages suffered by the nonbreaching party.

What is an anticipatory repudiation, and what must be shown for it to be enforced?

Unless a contract for services calls for unique personal services, that contract cannot be discharged by impossibility.

In which of the following situations is a court most likely to find substantial performance?

Liquidated damages must be directly related to the breach of contract they are compensating the nonbreaching party for.

In which of the following scenarios would enforcement of specific performance be appropriate?

Specific performance is almost always available when a real estate contract is involved.

Incidental beneficiaries are known about when the contract is entered into.

Toy Tech (TT) has ordered 50,000 aluminum widgets from the Acme Widget Corporation (AWC) with delivery to be made on November 1. These widgets will be used in TT products to create toys for the holiday season. Under which circumstance may TT claim an anticipatory repudiation?

Burt has contracted with Mel to put a concrete driveway on Mel's property. If Burt delegates the duty of laying the driveway to Chuck and Chuck does an unacceptable job, Mel may sue Burt for damages.

Damages agreed to when the contract is written and prior to any actual breach are called ________ damages.

Sharon has contracted with Craig to buy Craig's car. She will pay $5,000 in cash, and he will provide the title and registration. They agree to meet at 10 a.m. on Wednesday to exchange their consideration. Unfortunately, Craig dies Tuesday evening.

A rescission of a contract may occur when either party chooses to end the agreement.

Legal Foundations

Business and the Constitution

The American Judicial System, Jurisdiction, and Venue

Resolving Disputes: Litigation and Alternative Dispute Resolution Options

Business, Societal, and Ethical Contexts of Law

Overview and Language of Contracts

Contract Formation

Contracts for the Sale of Goods

Torts and Products Liability

Agency

Employment Relationships and Labor Law

Employment Discrimination

Choice of Business Entity, Sole Proprietorships, and Partnerships

Limited Liability Companies and Limited Liability Partnerships

Corporations

Regulation of Securities, Corporate Governance, and Financial Markets

Administrative Law

Environmental Law and Policy

Antitrust and Regulation of Competition

Creditors Rights and Bankruptcy

Consumer Protection Law

Criminal Law and Procedure in Business

Personal Property, Real Property, and Land Use Law

Intellectual Property

International Law and Global Commerce

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