Deck 11: Discharge and Breach

Question 1

Miguel filled his shopping cart with groceries and proceeded to the cashier.The total bill came to $40.Which of the following forms of payment must the cashier accept?

A)20 two-dollar coins
B)40 one-dollar coins
C)a cheque
D)a debit card
E)a credit card

Answer 1

A

Question 2

Chan was contractually obliged to pay $10 000 to Olivia,but failed to do so.For the next eight years,she pestered him for payment on a monthly basis,and he consistently and silently ignored her.Olivia is not barred by the statute of limitations because she has continually pressed her claim on Chan.

Answer 2

False

Question 3

Hector agreed to apply three coats of paint to the exterior of Ruth's house.Although he only applied two,the evidence indicates that a third coat was really unnecessary.Hector nevertheless has breached the contract.

Answer 3

True

Question 4

Jasper owed $5000 to Miranda under the terms of a contract.He brought that amount of cash to her office during regular business hours.Because she was in a bad mood at the time,however,Miranda slammed the door in his face.As a result,Jasper no longer has to make payment under the contract.

Question 5

Birinder contractually promised to sell 10 000 tons of steel to Maria.Because he honestly believed that he had a total of 25 000 tons of steel in stock,he sold 15 000 tons of steel to Boris under a separate contract.After doing so,however,he discovered that he originally had only 20 000 tons of steel in stock.Because he has only 5000 tons of steel remaining,and because he had acted honestly throughout,his contract with Maria is discharged on the basis of frustration.

Question 6

Which of the following statements defines in part the effect of "discharge of contract"?

A)The parties describe their contract into a written document.
B)Each party provides a promise in order to create an enforceable agreement.
C)A contract is entered into by a minor.
D)Neither party is held responsible for past actions,but both must perform the contract in the future.
E)A contract that is discharged for breach continues to exist for some purposes.

Question 7

Sasha owed $350 to Nicole.Under the terms of their contract,he was required to pay that amount to her at her office on March 31.Which of the following statements is TRUE?

A)If it is inconvenient and unreasonable for Sasha to travel to Nicole's office on March 31 because he is sick,he is entitled to pay on April 1 without breaching the contract.
B)If Nicole unjustifiably rejects a payment that satisfies the terms of the contract,Sasha no longer has to pay anything at all.
C)If Sasha provides four $100 bills to Nicole at her office on March 31,she must accept that payment as long as a reasonable person in her circumstances would be willing to make change.
D)If Nicole rejects a proper tender,she can no longer insist upon receiving payment at her office.
E)If Nicole rejects a proper tender,she is still entitled to receive payment with interest calculated from March 31,but she must compensate Sasha for his inconvenience.

Question 8

It is necessary to consider all of the circumstances of a case before determining whether or not an innocent party is entitled to discharge a contract on the basis of a breach of warranty.

Question 9

Because consideration is not received in return,a waiver of contractual rights is effective only if it is placed under seal.

Question 10

Casey purchased a 12-month cable television package from CanVid Inc.Under the terms of that contract,Casey received an option to terminate the agreement immediately if he found another cable provider who offered a better price.Three months later,Casey discovered that Videotech Ltd offered the same cable package at a price that was 10 percent less than CanVid's.Casey's contract with CanVid therefore is automatically terminated.

Question 11

Kitten Inc was contractually obliged to pay $5000 to Mavitten Ltd on June 1,but failed to do so.It is now June 3.Assuming that general contractual rules apply,which of the following statements is TRUE?

A)Kitten has committed a serious breach of contract because time is of the essence.
B)Mavitten is entitled to discharge the contract for breach.
C)Kitten has breached a condition subsequent by failing to pay even after the scheduled date for payment has passed.
D)As a result of Kitten's behaviour,the terms of the contract have been varied.
E)Mavitten cannot discharge the contract unless it notified Kitten that the time of payment is a contractual condition and time is of the essence.

Question 12

A contract existed between David and Tawny.Although the agreement was fully executed from his perspective,it was still partially executory from her perspective.The parties nevertheless agreed that the agreement should be brought to an end.That new agreement is enforceable as long as David puts his seal on it,even if Tawny does not do likewise.

Question 13

ABC Corp and XYZ Inc entered into a contract that is subject to a condition subsequent.In order to determine whether or not the parties' agreement will come to an end as a result of that condition,it is necessary to determine whether or not either party has been substantially deprived of the expected benefit of the contract.

Question 14

Halle was required to pay $100 to Barry under the terms of a contract.She arrived at his door and gave him fifty $2 coins.Barry was entitled to reject that money.

Question 15

In some circumstances,the innocent party will not be able to discharge a contract,regardless of whether the other party breached a condition,a warranty,or an intermediate term.

Question 16

Alpha Corp breached its contract with Beta Inc.If Beta discharges the contract on the basis of that breach,the contract no longer will be at all relevant to the relationship between the parties.

Question 17

Which of the following statements is TRUE with respect to a contractual obligation that is discharged through payment by a debit card?

A)Debit cards use the same rules and procedures as credit cards.
B)Unlike payment by cash,payment by debit card is conditional rather than final.
C)A debit card operates by allowing the card holder to purchase an item by promising to pay the vendor later.
D)Because of the need for commercial certainty,the holder of a debit card is liable for all purchases,even if,for example,a criminal uses a gun to force the card holder to use the card.
E)Payment by debit card is final and irrevocable,unlike a credit card transaction.

Question 18

The difference between a condition precedent and a true condition precedent is that a condition precedent is really a condition subsequent.

Question 19

It is possible for a contract to be discharged by performance even though one party breached the contract if the breach was waived.

Question 20

An accord and satisfaction is effective only if both parties provide fresh consideration.

Question 21

Acme Corp entered into a complex agreement with Coyote Inc for the design and delivery of various types of widgets.After several months,however,Acme received an offer to perform a similar service for the government under a more lucrative contract.Acme could not possibly perform both agreements.It therefore conducted some research and discovered that another company,Geococcyx Ltd,was able and eager to complete the deal with Coyote.Which of the following statements is TRUE?

A)Because of the circumstances,Acme likely has the right to use the process of waiver to escape its contract with Coyote.
B)The parties could use the process of novation to allow Geococcyx to assume Acme's role under the original agreement with Coyote.
C)Because of the circumstances,the contract between Acme and Coyote is frustrated.
D)Geococcyx can use the legal process of repudiation in order to discharge the contract between Acme and Coyote.
E)The contract between Acme and Coyote can be described as "fully executed."

Question 22

Wilf agreed to purchase a business from Celine.The parties' contract stated that the deal was to close on June 1,when Wilf would pay $250 000 to Celine and she would transfer the appropriate documents to him.The parties' contract also said: "This sale is conditional upon Wilf's ability to arrange suitable financing from a lending institution." On June 1,Celine called for payment of the purchase price,but Wilf explained that he had not been able to receive financing.Which of the following statements is most likely TRUE?

A)Because the contract was "conditional," the parties never had an enforceable agreement.Consequently,Wilf cannot be held liable even if he did not make any effort to secure financing
B)Wilf is liable for breach of the quoted condition if he did not make any attempt to secure financing.
C)Wilf is liable for breach of a subsidiary obligation if he did not make any attempt to secure financing.
D)Although the parties' agreement referred to a "condition," a court will find that that agreement was really subject to an option to terminate.
E)The result in this case will depend upon whether or not the "condition" that the parties referred to was really a warranty.

Question 23

AJ contractually agreed to repair Shirley's car within one week.Three days later,however,he informed her that he would not be able to complete the job because he had lost all of his tools in a poker game.The facts most clearly demonstrate the concept of

A)deviation.
B)breach of a warranty.
C)novation.
D)bankruptcy.
E)self-induced impossibility.

Question 24

Kate and Ben entered into a contract.She promised to transfer 1000 shares in XYZ Corp to him and he promised to personally draft architectural plans to certain specifications for her.Kate transferred the shares to Ben as promised,but he later discovered that he simply lacked the ability to uphold his end of the bargain.Which of the following statements is TRUE?

A)If Kate promises to release Ben from his obligation to perform the original contract,that promise can be enforced against her through the process of accord and satisfaction if Ben gives some form of fresh consideration,such as a promise to design a web site,instead of draft architectural plans.
B)Since neither party promised to pay money,the original contract is unenforceable because it is not supported by legal tender.
C)A seal is necessary for the purposes of an accord and satisfaction.
D)The contract would be unenforceable under the statute of limitations if the parties had originally agreed that Ben would have more than six years to complete the architectural plans.
E)Rescission provides the simplest way in which the parties can bring their contract to an end.

Question 25

Zinedine entered into a contract with Sporting Press Inc to write an instructional book about soccer.Under the terms of that agreement,he was required to deliver the manuscript of the book to the company by December 31.On October 1,however,Zinedine telephoned Sporting Press and explained to the editor that,due to other commitments,he would not be able to perform his obligations on schedule.Which of the following statements is TRUE?

A)Sporting Press must discharge the contract now or never,since it is not entitled to wait until December 31 before it makes its decision.
B)Unless the parties agreed otherwise,the time of Zinedine's performance was of the essence.
C)Sporting Press is entitled to demand performance,but it cannot force Zinedine to pay damages.
D)If Sporting Press does not respond to Zinedine's statement,a court will assume that the contract has been discharged.
E)Zinedine has committed an anticipatory breach.

Question 26

Which of the following statements is TRUE with respect to the contractual concept of deviation that applies when goods are shipped?

A)Deviation usually allows a contract to be discharged on the basis of substantial performance.
B)Deviation is a type of anticipatory breach.
C)Although the concept of deviation applies when goods are placed on board a ship,a different set of rules applies when goods are transported by rail or by road.
D)The practical consequences of deviation are usually small because the party in breach is protected by insurance.
E)Deviation is a form of contractual breach.

Question 27

As part of a larger business plan,Ronald and Margaret devised an arrangement that would involve the shipment of widgets to the island of Abuc in the Caribbean.They are concerned,however,that their plan might violate the Trading with Enemy Islands Act,which prohibits the export of goods to certain Caribbean nations.Ronald and Margaret nevertheless want to immediately draft a document that sets up a structure for the shipment of widgets to Abuc,but that will not expose them to liability if,after seeking government approval for their plan,they learn that widgets cannot legally be sent to Abuc.As a matter of risk management,which of the following statements provides the best advice? Ronald and Margaret should insert

A)a condition precedent to performance into their agreement.
B)a true condition precedent into their agreement.
C)a condition subsequent into their agreement.
D)an option to terminate into their agreement.
E)an exclusion clause into their agreement.

Question 28

Tippi and Alfred entered into a contract for the sale of birds.Under the terms of that agreement,she was to provide him on a weekly basis with 10 lovebirds for his pet store,and he was to pay her $50 on a weekly basis.The agreement also stated that the contract would be in force for one year.For six weeks,each party performed as promised.At the beginning of the seventh week,however,Tippi telephoned Alfred and said that she wanted to bring their agreement to an immediate end.Which of the following statements is TRUE?

A)The parties cannot use the process of rescission to discharge the contract because they have already performed part of the agreement.
B)The parties can use the process of rescission to discharge the contract,but only if Alfred seals his agreement to Tippi's proposal.
C)If the parties agree to immediately discharge their contract,their new agreement will be supported by consideration.
D)The parties' contract will automatically be discharged through the process of novation if neither Tippi nor Alfred ever try to enforce it.
E)The contract can be brought to an end through the process of release only if Tipi provides fresh consideration or the release is made by Tippi affixing her seal.

Question 29

Evan owns a business that produces various forms of marketing and promotional materials.Andrea entered into a contract with him.He was required to design a website for her business by June 1 and she was required to pay $100 000 on July 1.Because of an administrative error,however,Evan confused Andrea's order with the order of another customer.Consequently,by June 1,he had printed 10 000 copies of a glossy magazine for another customer,but he had not even started work on Andrea's website.Although it is not yet July 1,Andrea has changed her mind and she no longer wants to pay $100 000 to Evan in exchange for a website.Which of the following statements is TRUE?

A)Evan is entitled to discharge the contract because Andrea committed a breach of a contractual warranty that substantially deprived him of the expected benefit of the contract.
B)Andrea is entitled to discharge the contract because Evan committed a breach of a contractual warranty that substantially deprived her of the expected benefit of the contract.
C)Evan is entitled to discharge the contract because Andrea committed a breach of a contractual condition that substantially deprived him of the expected benefit of the contract.
D)Andrea is entitled to discharge the contract because Evan committed a breach of a contractual condition that substantially deprived her of the expected benefit of the contract.
E)Because Evan has not performed and because Andrea no longer wants his performance,the contract was been discharged by frustration.

Question 30

Which of the following statements is TRUE?

A)Bankruptcy always relieves a contractual party from the need to satisfy any obligation that arose under a contract.
B)The doctrine of frustration applies in favour of the innocent party if the other party to a contract intentionally makes it impossible to perform the contract.
C)The lapse of time under a statute of limitation causes a contract to be wiped out altogether.
D)The breach of an intermediate term sometimes allows the innocent party to discharge the contract.
E)In contrast to the doctrine of promissory estoppel,there is no possibility of retraction and resumption of rights under the doctrine of waiver.

Question 31

Which of the following statements is TRUE?

A)The doctrine of frustration applies only if the circumstances have changed so that performance,as originally intended,has become impossible.
B)Because of its effect upon the parties,bankruptcy always leads to frustration of a contract.
C)The doctrine of waiver may apply in connection with a condition,but not a warranty or an innominate term.
D)Bankruptcy always discharges a person from performing a contractual obligation.
E)Limitation periods exist,in part,because it is undesirable for courts to rely upon evidence that is old and perhaps unreliable.

Question 32

Which of the following rules applies with respect to a tender of payment?

A)The creditor must tender payment even if the debtor has not asked for it.
B)A creditor that rejects a proper tender cannot later demand payment of the same debt.
C)If a debtor pays more than is actually due,the creditor generally must provide "change" for the difference,as long as the "change" does not exceed the limits set by the Currency Act.
D)A creditor generally must accept any reasonable form of payment,such as cash,credit card,or cheque.
E)A creditor that rejects a proper tender may be unable to claim interest on the unpaid amount.

Question 33

Ranjit and Samantha,who are both business students,entered into a contract.He promised to tutor her in the law of negotiable instruments,and she promised to type his handwritten notes for him after each class.The contract was to start on September 1 and was to last for one academic year.Before the beginning of September,however,Samantha learned that she was enrolled in a course on mortgages,rather than a course on negotiable instruments.Furthermore,Ranjit received a laptop computer as a present from his parents.Ranjit and Samantha therefore have agreed that the original terms of their contract no longer make much sense.They also agree that it would be preferable if he tutored her in the law of mortgages and she designed a database that will allow him to most effectively use the lectures notes that he types for himself in class.Which of the following processes would best suit the parties' needs?

A)rescission
B)variation
C)accord and satisfaction
D)release
E)waiver

Question 34

Which of the following techniques for discharging a contract does not require fresh consideration?

A)performance in full by both parties
B)novation
C)variation
D)accord and satisfaction
E)waiver

Question 35

Which of the following situations best demonstrates the concept of self-induced impossibility?

A)Seven years ago,Alpha became contractually indebted to pay Beta $10 000.Since Beta has not yet taken any action against Alpha,Beta probably can no longer collect upon the debt.
B)Alpha agreed to transfer a particular vehicle to Beta.The transfer was to occur on June 1.On May 15,however,Alpha transferred the same car to Gamma,who was entirely unaware of the contract between Alpha and Beta.
C)On May 15,Alpha agreed to transfer a certain painting to Beta.The transfer was to occur on June 1.In fact,although neither party realized it when they created their agreement that painting had been destroyed by fire on May 1.
D)On May 1,Alpha agreed to transfer a motorcycle to Beta.The transfer was to occur on June 1.On May 15,Alpha informed Beta that it intended to break the contract and keep the motorcycle for itself.
E)Alpha was contractually obliged to pay $1000 to Beta,at Beta's place of business,on June 1.On June 1,Alpha went to Beta's place of business and tried to discharge the debt by giving ten $100 bills to Beta.Beta refused to take the money.Because Beta refused a proper tender,Alpha no longer is required to actively repeat its tender.

Question 36

Boris purchased confidential information from Natasha for a price of $100 000.Under the terms of that contract,he was required to pay $5000 on the first day of each month for twenty consecutive months.He was also required,on the first day of each month,to pay 7.5 percent interest on the total amount of the debt that was outstanding.After paying $5000 plus interest for the first month,Boris explained to Natasha that he had suffered a financial setback in his other business ventures.He therefore asked if she would be willing to relieve him of the need to pay interest in the future.Which of the following statements is TRUE?

A)If Natasha says that she will not insist upon the payment of interest in the future,but that promise is not supported by fresh consideration,there is no way that Boris can hold Natasha to her promise.
B)If Boris fails to pay interest in the future,the contract will be frustrated unless Natasha agreed to relieve Boris of the need to pay interest.
C)If Natasha says that she will not insist upon the payment of interest in the future,the doctrine of waiver may later prevent her from changing her mind.
D)The doctrine of waiver would apply in this case only if Natasha promised under seal that she would relieve Boris of the need to pay interest in the future.
E)Since waiver is an equitable doctrine,it would apply to the facts only if a court found that Natasha had acted inequitably or unfairly.

Question 37

Corrie contractually agreed to build a house for Ed in exchange for $250 000.After completing about 75 percent of the project,Corrie ran out of resources and informed Ed that she could not continue.She therefore abandoned the job,as well as a substantial amount of materials at the work site.After Corrie left,Ed used the abandoned materials to finish the job himself.Which of the following statements most likely is TRUE?

A)Corrie is entitled to partial payment on the basis of the doctrine of substantial performance.
B)Although she is not entitled to be paid for her services,Corrie is entitled to sue on the contract in order to be paid for the materials that Ed used to complete the project.
C)Because Ed completed the job,Corrie is entitled to have the contract discharged on the basis of performance.
D)If the court classifies the parties' agreement as an entire contract,then Ed is liable for the materials that he used in completing the project,but he is not liable for the work that Corrie performed.
E)Because Corrie did not complete the project,the parties never actually had a contract.

Question 38

Pavel agreed to build a yacht for Dixie.The yacht was to be delivered to Dixie on July 15 and Pavel was to be paid the total price of $100 000 on the same day.Which of the following statements is TRUE?

A)If Pavel delivers the yacht,and Dixie pays the price,on July 15,she will be required to provide him with a signed document called a "novation" that signifies his proper completion of the agreement.
B)If Pavel delivers the yacht on July 15,but has not stenciled the name Sea Bird on the back of the boat as he had promised to do,Dixie is certainly entitled to refuse delivery and withhold the purchase price.
C)If Pavel completes construction of a yacht on July 1,only to see it destroyed by a hurricane the next day,the contract will be certainly discharged on the basis of self-induced impossibility if Pavel does not have enough time to build another yacht for Dixie by July 15.
D)If Pavel delivers the frame of the yacht,together with the materials that will be required to actually complete construction of the boat,he is entitled to have the contract discharged on the basis of "substantial performance" as long as he compensates Dixie for the price that she will have to pay to have another person finish the project.
E)If the parties created an entire contract,then,unless and until he completes the project,Pavel will not be entitled to any payment,even if spent $75 000 trying to perform his obligations.

Question 39

Which of the following statements is TRUE?

A)A contract will be discharged on the basis of substantial performance only if the recipient of the incomplete performance agrees to accept monetary damages for the shortfall.
B)A contract will be discharged on the basis of anticipatory breach only if the innocent party chooses to relieve the party in breach of the need to perform the contract and release the defaulting party from claims for damages.
C)An option to terminate can only be exercised by one party if the other party has breached the contract.
D)A true condition subsequent will prevent a contract from being created unless a certain event occurs.
E)A contractual obligation is executory if it has been performed.

Question 40

Jonah entered into a contract with Sporting Videos Inc to appear in an instructional video about rugby.Under the terms of that agreement,he was required to participate in a filming session on March 1.Two weeks before that date,however,he telephoned Sporting Videos and explained to the company's president that he no longer was interested in the project.Which of the following statements is TRUE?

A)Jonah has committed an anticipatory breach of a warranty.
B)The contract has been frustrated.
C)If Sporting Video does not respond to Jonah's statement within six weeks,the contract will be discharged under the statute of limitations.
D)Jonah has rescinded the contract.
E)Sporting Videos ultimately will be held liable if it immediately insists upon performance,but finds,on March 1,that it cannot perform even though Jonah has changed his mind and is ready to perform.

Question 41

Green Thumb Inc contractually agreed to provide a "complete lawn care package" to Benjamin.The parties' contract required the company to perform a long list of tasks on a weekly basis during the summer months.While the company performed most of those tasks flawlessly,Benjamin was very upset to discover that one of his seven small flower beds had not been weeded one week.The company explained that the task had been overlooked by an employee during her first week on the job,and offered to extend their services one week into the fall season free of charge.Because he had come to regret entering into the contract in the first place,Benjamin rejected the company's explanation and offer.He announced instead that he was "terminating" the contract and that he no longer would allow company employees on his property.Which of the following statements is most likely to be TRUE?

A)Both parties have breached conditions of the contract.
B)The company is entitled to discharge the contract.
C)Benjamin breached a warranty of the contract.
D)The company breached a condition of the contract.
E)Only one party has a right to sue for breach of contract.

Question 42

Pym had an idea for an invention.Campbell agreed to purchase a share of that invention,but only if it was approved within one week by two specific engineers,who were independent of the parties.One of the engineers gave his approval,but the other,who was on vacation,did not.Pym nevertheless claimed that Campbell was required to proceed with the anticipated purchase.Which of the following statements is most likely TRUE?

A)Pym's argument will succeed on the basis of the concept of self-induced impossibility.
B)Pym's argument will fail because the contract was subject to a condition precedent that was not satisfied.
C)Pym's argument will succeed because Campbell has breached a term of the contract.
D)Pym's argument will fail because the parties' agreement was subject to a true condition subsequent.
E)Pym's argument will fail because the parties' agreement was frustrated.

Question 43

Pina contractually agreed to purchase a shipment of beans from Jerry.The beans were to be delivered on June 15.A court recently held that Pina is entitled to discharge the contract because Jerry did not perform as required by the agreement.Assuming that the general rules of contract are all applicable in this case,which of the following statements is most likely TRUE?

A)Jerry breached the contract by delivering the beans on June 17.
B)Pina will rely upon the remedy of rescission.
C)Jerry breached a term that the court classified as a warranty.
D)Although Jerry was able to deliver the beans on June 15,he had announced on May 30 that he would not be able to perform on time.
E)While Pina initially decided to carry on with the contract after Jerry's anticipatory repudiation and after Jerry did not deliver the beans on June 15,she changed her mind after the price of beans dropped and she was able to obtain the same quantity of beans from another supplier at a lower cost.

Question 44

Brock contractually agreed to build a deck on the back of Moira's house in exchange for $20 000.It is now two years later and that contract has been brought to court.The judge applied the doctrine of substantial performance.This means that

A)Brock performed all of the conditions,but not all of the warranties,in the contract.
B)neither party is entitled to damages.
C)the contract has been discharged for performance.
D)Moira must pay $20 000 to Brock.
E)Brock remains obligated to perform the remainder of the contract.

Question 45

Melton enters into an agreement with Onyx Suits to purchase their latest tuxedo tailored in his size from the online website.When Melton receives the package from Onyx in the mail,the tuxedo is more than noticeably untailored and there appears to be a stain on the pant leg.Which of the following is true?

A)Onyx has breached a condition and Melton is entitled to discharge himself from the contract.
B)Onyx has breached a condition but they will not be liable for the cost of tailoring the suit and cleaning it.
C)Onyx has breached a warranty and they will be liable for the cost of tailoring the suit and cleaning it.
D)Onyx has breached a warranty but they will not be liable for the cost of tailoring the suit and cleaning it.
E)Onyx has breached a warranty and Melton is entitled to discharge himself from the contract.

Question 46

Which of the following sets of concepts (as discussed in Chapter 11)all represent ways in which the terms of a contract can be varied without the supply of fresh consideration?

A)rescission and waiver
B)release and waiver
C)release and novation
D)variation,waiver,and novation
E)waiver,release,and rescission

Question 47

Which of the following statements is TRUE with respect to various uses of the word "condition" as that word was used in Chapter 11?

A)A condition subsequent suspends the creation of a contract until a certain event has occurred.
B)A condition precedent always leads to the existence of secondary obligations.
C)If a condition subsequent is not satisfied,then the contract is rescinded.
D)A party who fails to perform a condition may be held liable for damages.
E)A contract cannot involve both a condition subsequent and a true condition precedent.

Question 48

Jonathan visits Michael's garage sale and decides to buy his computer desk and bed frame.Michael puts the agreement into a contract and both Jonathan and Michael sign it.After exploring some more,Jonathan wants to purchase the used laptop as well.Jonathan creates a new contract that includes the laptop,desk,and bed frame,which Jonathan agrees to once again.Which statement is true?

A)The two parties implied to rescind the first contract by creating a second one.
B)The two parties have not discharged the duties from the first contract by creating a second one.
C)The first contract has been executed and the second contract is in the executory stage.
D)Both contracts have been executed.
E)The first contract has only been discharged if both parties sign a release.

Question 49

Part of the law's response to a breach of contract is best explained by the fact that

A)a breach of condition will usually substantially deprive the party in breach of the expected benefit of the contract.
B)some terms cannot be classified as either a "condition" or a "warranty" at the outset.
C)a breach of a warranty will usually deprive the party in breach of the expected benefit of the contract.
D)a breach of a condition will prevent a contract from being formed.
E)an unaccepted repudiation is effective to discharge a contract.

Question 50

Svetlana,a carpenter,agreed to make 100 maple bats for Dexter,a professional baseball player.The total price of $10 000 was to be paid one week after delivery of the bats.When Svetlana delivered the bats to Dexter,he noticed that they were made out of wood from pine trees rather than maple trees.Despite being disappointed,he reluctantly agreed to accept the shipment and promised to pay as required by the contract.After using the bats for two days,however,he found that they considerably reduced his ability to hit home runs.He also learned that Jorge,another carpenter,was willing to produce 100 maple bats at a price of $5000.There is a common belief among baseball players that maple bats are far superior to pine bats.Which of the following statements is most likely TRUE?

A)Since Svetlana breached a warranty,Dexter never enjoyed the option of discharging the contract.
B)Although Dexter was entitled to discharge the contract and reject Svetlana's bats on the basis of her breach of a warranty,he lost that right when he accepted the delivery and used some of the bats.
C)Svetlana committed an anticipatory breach of contract.
D)Even if Dexter exercises a right of discharge,the contract will continue to exist for some purposes.
E)Since the bats can still be used,the facts illustrate the doctrine of substantial performance.

Question 51

Jerry is interested in purchasing Tom's vinyl set.As Tom is drafting the contract,he decides that he does not want to sell the entire set.Which discharge of agreement option should be used to allow this?

A)Rescission
B)Option to terminate
C)Accord and satisfaction
D)Release
E)Novation

Question 52

Rande contractually agreed to purchase his electricity,for two years,from Metro Power Inc.Six months after that contract was signed,Metro Power increased its prices by ten per cent,as it was permitted to do under the agreement.It then insisted that Rande pay at the new rate for the remaining time under the contract.Although Rande realized that Metro Power had acted in accordance with the law,he is very upset about the price hike.Assuming that the default rules of contract apply,

A)Rande is entitled to protest by paying his monthly bill with any number of bills and coins he happens to have on hand.
B)Rande is entitled to protest by paying his monthly bill with a dozen or more cheques which add up to the correct amount.
C)Rande is entitled to protest by paying only when a representative from Metro Power has come to his house to collect payment on his monthly bills.
D)Rande is entitled to protest by paying his monthly bills with foreign currency.
E)Rande must pay as promised,even though he is unhappy with Metro Power's actions.

Question 53

A homebuilder,Jim,accepts an entire contract from Mark to build a house for $500 000 on his property.Half way through the job,the builder's material and money run out and Jim is unable to finish the job.He chooses to leave the worksite indefinitely.A year later,Jim returns to find the house on Mark's property fully completed.Jim then asks Mark to pay for the work that he completed before leaving the worksite.Mark refuses to pay.Which of the following is true?

A)Mark has to pay Jim $250 000 for the substantial performance.
B)Mark can use his discretion to decide how much to pay Jim.The payment must be under $500 000.
C)Mark owes Jim $0 for the work he did on the house,but he may owe Jim for using his building materials.
D)Mark has to pay Jim $500 000 for the substantial performance.
E)Mark owes Jim $0 because $500 000 would be considered an unreasonable price.

Question 54

Depp Designs Inc is a landscaping company.Roger owns a house that is surrounded by various types of shrubbery.He entered into a contract with Depp under which the company was required to sculpt the various shrubs into the shapes of dogs.Because of an error,however,Depp actually sculpted the shrubs into the shapes of cats.Which of the following statements is TRUE?

A)Because of the circumstances,Roger cannot discharge the contract even though there has been a breach of condition,but Roger may sue for damages.
B)Because of its error,Depp has rescinded the contract
C)Because of its error,Depp has frustrated the contract
D)Roger's performance is clearly defective.
E)Because the parties already had a contract that was in existence and that required them to perform,it is impossible to classify Depp's actions as a breach of a "condition."

Question 55

The existence of intermediate terms is best explained by the fact that

A)contractual parties sometimes do not specify whether a term should be considered a condition precedent or a condition subsequent.
B)the innocent party sometimes should receive damages for some of its losses,but not others.
C)some terms are more difficult to breach than warranties but easier to breach than conditions.
D)it is sometimes appropriate to wait and see how a breach actually affects the parties before determining whether or not the right to discharge should arise.
E)the courts are willing to mediate a dispute between some contractual parties,but not others.

Question 56

Madeleine entered into a contract with Blue Water Inc.That contract required the company to install a swimming pool at a price of $15 000,and to then landscape the rest of Madeleine's backyard at a cost of $3000.The parties' transaction has now been brought into court.The judge has applied the entire contract doctrine.This means that

A)the company has not performed any part of the whole agreement.
B)Madeleine may not be required to pay a cent even though she now has a swimming pool in her backyard.
C)in order to reach a fair result,the judge ignored the parties' intentions and split the single contract into two distinct contracts.
D)the parties rescinded the entire agreement and created a new one in its place.
E)in order to reach a fair result,the judge ignored the parties' intentions and joined two distinct contracts into one single contract.

Question 57

Samuel entered into a contract with AE Lukey Inc.That contract required both parties to perform services.It is now six months later.The contract is executed on one side and executory on the other.Which of the following statements may be TRUE?

A)One party must be entitled to receive damages.
B)If the parties wish to modify the terms of their contract,they may effectively do so by using the process of accord and satisfaction but not the process of rescission.
C)One party is entitled to discharge the contract.
D)One party has signed the contractual documents,but the other party has not done so.
E)If the parties wish to modify the terms of their contract,they may effectively do so by using the processes of variation or novation without new consideration.

Question 58

The phrase "innominate term" is defined as a term that

A)is unimportant and,if breached,leads only to damages.
B)was not numbered,or included,with conditions and warranties among the types of terms that courts traditionally recognized.
C)one party has nominated,or chosen,to sue upon as either a condition or a warranty.
D)is unnamed because it is not called either a condition or a warranty.
E)leads to nominal damages if it is breached.

Question 59

Which of the following statements is TRUE with respect to the word "rescission"?

A)Rescission always arises as a result of a contractual defect.
B)Rescission is the name of the process that allows a contract to be discharged after one party has breached a serious term of the contract.
C)Depending upon the circumstances,rescission may involve either a bilateral agreement to discharge a contract or a unilateral decision to terminate a contract.
D)Rescission eliminates the need to perform outstanding primary obligations,but it does not affect secondary obligations.
E)Rescission always requires the supply of fresh consideration.

Question 60

Malik is a professional soccer player in Canada.He is contacted by Health First Solutions from Italy and they propose to have him endorse a new product that will boost lung capacity and help people become better long-distance runners and quicker sprinters.Malik agrees subject to one condition,that the product receives approval from the Canadian government.What kind of condition has Malik enforced?

A)A condition subsequent: a contractual term that states that an agreement will come into existence only if the product is approved
B)A true condition precedent: a contractual term that states that an agreement will come into existence only if and when the product is approved
C)A condition precedent: a contractual term that states that an agreement will come into existence only if and when the product is approved
D)A condition subsequent: a contractual term that states that the agreement will be terminated if a certain event occurs
E)A true condition precedent: a contractual term that states that the agreement will come into existence and the enforcement of the primary obligations will be suspended,but secondary obligations have to be performed

Question 61

Identify a situation in which a party is entitled to have a contract discharged on the basis of performance,even though that performance constitutes a breach of the contract.

Question 62

Describe the process of novation.Explain whether or not the process requires consideration.If so,explain how consideration is provided.

Question 63

Identify two policy reasons why contractual rights may become unenforceable under a statute of limitation.

Question 64

Woogles Inc manufactured widgets in Winnipeg.It contractually agreed to sell 5000 widgets to Peja in Halifax for a price of $100 000.Because the Province of Manitoba is concerned about the export of widgets,it requires all such sales to be licenced.Such licences are easily obtained if the seller fills out a simple application form.Because of that requirement,the contract between Woogles and Peja contained a clause that said,"Performance of this agreement is conditional upon the acquisition of an export licence." Shortly after entering into its contract with Peja,Woogles received an offer from another buyer,who was located within Manitoba,to pay $125 000 for 5000 widgets.Woogles accepted that offer,even though it only had a total of 5000 widgets to sell.It then simply refused to apply for the export licence that was necessary for its contract with Peja.Can Woogles escape all responsibility to Peja in that way? Explain your answer.

Question 65

Harlan received a bill for $500 from Oxford Power Inc,with which he had a contract for the supply of electricity.The amount of the bill,which was much larger than Harlan expected,was attributable to the fact that Oxford's own costs had recently increased.Although Harlan initially refused to pay anything,he was eventually convinced by Oxford's representative that he was contractually liable for the entire $5000.As a sign of protest,he collected $500 in pennies,placed them in a large wheelbarrow,and proceeded to Oxford's main office to make payment.Oxford,however,refused payment.Was it entitled to do so? Explain your answer.

Question 66

As a result of her independent work as a research scientist,Zoe had confidential information concerning a new process for manufacturing light bulbs.She entered into a contract under which she promised to sell her information exclusively to Lampadina Inc,a light bulb manufacturer.Under the terms of that agreement,she was to provide the information on June 1 and Lampadina was to pay $250 000 within six weeks after that.On March 31,however,Zoe fell in love with Hans,the president of Gluhlampe Inc,another light bulb manufacturer.Two weeks later,she disclosed her confidential information to Hans.She then told Lampadina that since she could no longer provide "confidential information," their contract was at an end and she no longer owed any obligations to them.Is she correct? Explain your answer.

Question 67

Round About Shipments agrees to ship 5000 cartons of juice beverages for Brian.The agreement states the following condition: the route taken will begin in Canada and go through California to get to Mexico.Instead,Round About Shipments departs from Canada,and goes through Florida before heading to Mexico.Does Brian have any legal action again Round About Shipments?

A)No,the deviation would not considered substantial
B)No,Round About Shipments performed their obligation by delivering the goods to Mexico
C)Yes,Round About Shipments committed a fundamental breach by deviating from the proscribed voyage
D)No,the route to be taken is optional especially if there is opportunity for being more efficient in how they ship
E)No,Round About Shipments can vary the terms of the contract as they wish

Question 68

"If a contract is discharged for breach,it no longer has any effect." Is that statement correct? Explain your answer.

Question 69

You agree to rent a venue for your party that will be held on Jan.1,2013 from Chauncey.On December 26ᵗʰ,you find out that Chauncey has gone on to rent the venue to Darcy on the same day of your party.What action can you take?

A)Due to deviation,you are entitled to discharge the contracts and claim damages from Darcy.
B)The contract is frustrated and both you and Chauncey are left with no action.
C)Due to self-induced impossibility,you are entitled to discharge the contract and you can claim damages from Darcy.
D)Due to self-induced impossibility,you are entitled to discharge the contract and claim damages from Chauncey.
E)Due to self-induced impossibility,you can receive damages from Chauncey but must share the hall with Darcy.

Question 70

Explain the difference between a "condition," a "condition subsequent," a "condition precedent," and a "true condition precedent" as those terms have been used in this chapter.Which of those types of conditions can be breached? Explain your answer.

Question 71

Explain why a breach of contract supports the right of discharge in some situations,but not others.

Question 72

Briefly describe three ways in which a contract may be discharged by operation of law.

Question 73

Pierette entered into a contract with Hugo.She agreed to deliver a shipment of gold to his jewellery store each week for a year.He agreed to pay a specific price.The contract also said: "The buyer shall have the right to terminate this contract in the event of a substantial change in the market price of gold." After delivering gold to Hugo for several months,Pierette refused to go on with the contract.Her decision to do so was based on the fact that while her contract with Hugo contained a specific price,the market value of gold had suddenly increased a substantial amount.Consequently,she realized that her contract with Hugo no longer made good financial sense from her perspective.Would a court accept that argument from Pierette? Explain your answer.

Question 74

Ichiro and Emily discussed the possibility that he might buy a painting from her at a price of $100 000.Both parties wanted the sale to occur,and both were confident that Ichiro would be able to secure bank financing for the transaction.However,the parties also agreed that neither should have any obligations unless and until such financing was arranged.Explain how Ichiro and Emily can best achieve that result.

Question 75

"Even if the parties did not agree to such an arrangement when they created their contract,they may agree to bring their contract to an early end without relying upon consideration." Identify two situations in which is true.

Question 76

Thelonius agreed to purchase an antique piano from Ruby.He was required to pay the purchase price of $100 000 by cheque on June 1,and she was required to deliver the instrument on June 15.On June 1,Thelonius appeared at Ruby's place of business with a cheque for $100 000.However,because she was having second thoughts about actually delivering the piano to Thelonius,Ruby refused to accept his cheque.Explain the consequences of that refusal in terms of Thelonius's obligation to make payment.

Question 77

Gretchen,who lived in Calgary,entered into a contract with Matt,who lives in Edmonton.He paid $2500 to her at the outset and she promised that she would edit a book that he was in the process of writing.After completing slightly more than half of the job,however,Gretchen received an offer to act in a play on Broadway.Since acting had always been her dream,she pleaded with Matt to let her go to New York without finishing her project with him.She also pleaded with him to retain the $2500 that she had received from him because she needed a great deal of money to make the move.Since he was fond of Gretchen,Matt agreed.She then sold almost all of her belongings,including her computer,and moved to New York.A week later,however,Matt changed his mind when he learned that Gretchen was acting in Cats,a Broadway production that he disliked very much.He therefore now insists that she must fulfill the rest of her contractual obligations.Is he correct? Explain your answer.

Question 78

A&F Gardening Services attend to your lawn and garden in the early spring months.Without informing you,they add soil to your gardening areas.The soil contains a low-grade fertilizer that damages the plants.Which statement is true?

A)This is an anticipatory breach of contract and you do not have the option of discharging the contract.
B)Because the soil cannot be removed,you cannot discharge the contract,but you can claim damages for the low-grade product you received.
C)You cannot discharge the contract or claim damages.
D)Because the soil cannot be removed,you can discharge the contract and claim damages for the low-grade product you received.
E)Your only option is to get A&F to replace the plants.