Deck 13: Termination of Contracts

Question 1

Which of the following is true of discharge of contracts due to impossibility of performance?

A) Contracts can be discharged by strict impracticability of performance.
B) If an act is legal at the time of entering a contract but is subsequently made illegal, the contract is still enforced.
C) If the act called for in an alleged contract is impossible to perform at the time the contract is made, no contract ever comes into existence.
D) When performance by a party is made impossible by the wrongful act of the other party, the party who cannot perform has breached the contract by the failure to perform.

Answer 1

C

Question 2

When a court orders for specific performance, it is exercising its equity powers.

Answer 2

True

Question 3

Contracts for the performance of personal services can be specifically ordered as remedies in breach-of-contract suits.

Answer 3

False

Question 4

The release of one party to a contract constitutes the consideration for the release of the other.

Question 5

Which of the following statements best describes specific performance?

A) It refers to the payment of compensatory damages by a party as a remedy for breach of contract.
B) It refers to the carrying out of the specific terms of a contract.
C) It refers to carrying out of terms that were not specified in a contract in order to compensate for damages.
D) It refers to the payment of liquidated damages by a party as a remedy for breach of contract.

Question 6

If an act is legal at the time of entering a contract but is subsequently made illegal, the contract is discharged.

Question 7

The rescission of a contract releases an aggrieved party from all obligations that are yet to be performed.

Question 8

AB Developers signs a contract with CL Corp., agreeing to build a $20 million office for the corporation. The construction contract was substantially performed. There were, however, a few minor breaches of the contract by AB Developers that made CL Corp. incur damages worth $10,000. Which of the following is most likely to be true in this scenario?

A) Since there was a breach of contract, CL Corp. may not pay any compensation to AB Developers.
B) CL Corp. needs to pay the full price under the contract since the work was substantially performed.
C) CL Corp. needs to pay the full price under the contract less the damages suffered by it.
D) AB Developers needs to pay nominal damages to CL Corp. for breach of contract.

Question 9

In a written contract, Sheldon agreed to tutor the children of Mrs.Smith for a certain period of time. However, Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments of his. In this case, there has been a(n):

A) anticipatory breach.
B) rescission.
C) negligent breach.
D) malpractice.

Question 10

A breach of contract by one of the parties bound on a contract immediately terminates the contract.

Question 11

After a discharge in bankruptcy, creditors' rights of action to enforce most of the contracts of a debtor are barred.

Question 12

Which of the following statements is true of statutes of limitations?

A) For open accounts, accounts receivable, and ordinary loans, the statute of limitations varies from four to twenty years.
B) Even if a promisor leaves the state, the statute continues to run while the promisor is beyond the jurisdiction of the court.
C) Statutes of limitations are uniform for all kinds of debts and suits.
D) In the case of running accounts, such as purchases from department stores, the statute starts from the date of the last purchase.

Question 13

What constitutes satisfactory performance in a contract?

Question 14

In which of the following cases will a court refuse to enforce the provision of liquidated damages on a party?

A) When the actual damages are difficult to be proved
B) When the liquidated damages were established prior to the breach of contract
C) When the amount of liquidated damages fixed by the contract is unreasonable
D) When the parties refuse to pay the liquidated damages established in the contract

Question 15

If a party intentionally and without the consent of the other party alters a written contract, the other innocent party is discharged.

Question 16

If performance in a contract becomes extremely difficult after the contract is formed, it automatically discharges the contract.

Question 17

A debt that has been outlawed by a statute of limitations cannot be revived.

Question 18

Which of the following statements best defines a tender of performance?

A) It is an offer to perform an obligation in satisfaction of the terms of a contract.
B) It is an offer to pay money in satisfaction of a debt or claim when one has the ability to pay.
C) It is a contract provision that states the liquidity damages to be paid by a party if it breaches a contract.
D) It is a contract provision excusing performance when an extraordinary event occurs.

Question 19

A force majeure clause in a contract is a contract provision that excuses performance by a party when:

A) an extraordinary event outside the party's control occurs.
B) death or physical incapacity occurs, making it impossible to perform the services of the contract.
C) the performance is made impossible by the wrongful act of the other party.
D) an act that was legal at the time of the contract, is subsequently made illegal.

Question 20

An offer to provide money in satisfaction of a debt when one has the ability to pay is a(n) _____.

A) tender of payment
B) tender of performance
C) malpractice
D) anticipatory breach