Deck 17: Performance, Breach, and Discharge

Question 1

A condition subsequent is a much more frequent occurrence than a condition precedent.

Answer 1

False

Question 2

If there is a novation, the original promisor remains liable to the original promisee if the new promisor fails to perform.

Answer 2

False

Question 3

The "perfect tender rule" provides that only substantial deviations from the promised performance in a sales contract under the Code constitute a material breach and discharge the aggrieved party from the duty of performance.

Answer 3

False

Question 4

All contractual promises are absolute promises to perform.

Question 5

Conditions may be classified by how they are imposed and by when they affect a duty of performance; these ways of classification are mutually exclusive.

Question 6

By agreement, parties to a contract may discharge each other from performance under a contract.

Question 7

A material breach by the seller will discharge the buyer from his obligations under a contract.

Question 8

An unauthorized alteration of ANY of the material terms in a written contract discharges the entire contract.

Question 9

An accord and satisfaction discharges the original duty.

Question 10

A fundamental difference exists between the breach or nonperformance of a contractual promise and the failure or nonhappening of a condition.

Question 11

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

Question 12

Discharge by performance is the most frequent method of discharging a contractual duty.

Question 13

If an obligee promises to accept a stated performance in satisfaction of the obligor's existing contractual duty, this creates an accord.

Question 14

Substituted contracts immediately discharge the original contracts.

Question 15

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

Question 16

In the case of Hochster v.De La Tour the plaintiff was allowed to treat the repudiation by De La Tour as breach of contract and immediately bring suit.

Question 17

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

Question 18

Implied-in-fact conditions must fully and literally occur, and they are understood by the parties to be part of the agreement.

Question 19

In all substituted contracts there must be an agreement among three parties where a new promise is substituted for an existing promise or a new promisor is substituted for an existing promisor.

Question 20

The more conditions to which a promise is subject, the more content the promise has.

Question 21

An implied-in-law condition and constructive condition are the same.

Question 22

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

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

Question 23

Rich, a contractor, has a contract with Ron, a realtor, to construct a new condominium complex.The contract provides that Rich must furnish a certificate of occupancy and conformity with the local fire code before Ron has an obligation to pay.The furnishing of the certificate is an implied-in-fact condition subsequent to the construction of the building.

Question 24

The Code and the Restatement have no provisions for discharge of contractual duties in cases involving commercial impracticability.

Question 25

After the coronation of Edward VII was postponed and parties who had entered into contracts in anticipation of the event filed numerous suits, the doctrine of frustration of purpose evolved.

Question 26

Objective impossibility occurs if a particular contracting party is unable to perform because of financial inability or lack of competence.

Question 27

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

Question 28

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

A)Rhonda enters into a contract to buy a new car conditional upon her getting a loan from her bank.
B)Roger bought a VCR but he may return the VCR within ten days and get all of his money back.
C)Both (a) and (b) are examples of a condition subsequent.
D)Neither (a) nor (b) is an example of a condition subsequent.

Question 29

Marie owes Nathan $900 and the parties agree that Marie will paint Nathan's house in satisfaction of the debt.The debt is not discharged until Marie performs the substituted agreement by painting Nathan's house.

Question 30

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

Question 31

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

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

Question 32

Wilmer and Grace have an executory contract for the sale of some goods.Wilmer files for bankruptcy and is then discharged by the bankruptcy court.Wilmer has no obligation to perform under the contract.

Question 33

Concurrent conditions occur when mutual duties of performance are to take place simultaneously.

Question 34

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

Question 35

The Restatement and the Code have made the traditional test of objective impossibility more stringent by requiring that the performance must be actually or literally impossible in order to excuse a party from contractual duties.

Question 36

Belinda has a homeowner's insurance policy, which requires that she notify the insurance company within 30 days of any loss before she is eligible to receive payment for her loss.The notification requirement is a condition precedent to the insurance company's obligation to perform, even though the notification must occur subsequent to the loss.

Question 37

A novation is an agreement between two parties to have one substitute for the other in a contract.

Question 38

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

Question 39

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

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

Question 40

Tender is an offer by a party, who is ready, willing, and able, to perform his obligations under the contract.

Question 41

Bob, the tax accountant, promises to do Marge's individual federal, state, local, and gift taxes for the year.He completes all but the gift taxes.Under the substantial performance doctrine, Marge will:

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

Question 42

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

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

Question 43

On November 1, Paula and Roberta enter into a contract where both parties are obligated to perform on December 31.On December 1, Paula tells Roberta, "I can, in no way, perform my duties in our contract." This statement is:

A)a material alteration.
B)anticipatory repudiation.
C)a nonmaterial breach since the statement is made before December 31.
D)an accord.

Question 44

Fred contracts to sell a certain tract of land to Mary for $20,000, but the contract is silent as to the time of delivery of the deed and payment of the price.In this case, the:

A)payment of the $20,000 and the delivery of the deed are independent of each other.
B)delivery of the deed is a condition subsequent to the payment of the $20,000.
C)payment of the $20,000 and the delivery of the deed are mutually dependent and, in the absence of an agreement to the contrary, are concurrent conditions.
D)payment of the $20,000 is a condition precedent to the delivery of the deed.

Question 45

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

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

Question 46

The definition of "discharge by breach" is:

A)performance that is incomplete but that does not defeat the purpose of the contract but entitles the injured party to damages.
B)wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party.
C)a breach that prevents performance by either party.
D)None of the above.

Question 47

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

A)Conditions subsequent are quite common in contracts.
B)A "sale or return" contract is an example of a contract with a condition subsequent.
C)A condition subsequent must occur before performance is due under a contract.
D)All of the above are correct.

Question 48

Ed promises Marty $1,500 if he will completely landscape Ed's yard.Which of the following would discharge Ed's obligation to pay under this contract?

A)Marty leaves a one-foot strip of land barren.
B)Marty doesn't begin work on the landscaping until after he finishes two other jobs.
C)Marty doesn't plant any flowers or grass.
D)Ed isn't satisfied with Marty's design.

Question 49

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

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

Question 50

Refusal of a tender of performance by one party to a bilateral contract will:

A)be treated as a repudiation, excusing the tendering party from further duty of performance under the contract.
B)not discharge either party from further duty of performance under the contract.
C)be considered a condition subsequent.
D)None of the above.

Question 51

Jack recently borrowed $50 from Ricardo for a couple of weeks.Jack, still short of cash, tells Ricardo, "I will wash and wax your car in exchange for the $50 I owe you." Ricardo tells Jack, "OK, that's great!" Jack's performance of his new duty will be:

A)an accord.
B)a novation.
C)a rescission.
D)a satisfaction.

Question 52

A and B enter into a contract on January 1 of this year.A's friend C tells A, "The law generally restricts the time within which an action can be brought by either party to a contract." C's statement is:

A)false.
B)true because of statutes of limitations.
C)true because of the law of repudiation.
D)true because of covenants not to sue.

Question 53

Anita, who is a seamstress, agrees to sew a suit for Bryan, who promises in return to pay Anita $500 for the suit if he is satisfied with it.Anita completes the suit, which fits Bryan perfectly.Nevertheless, he says that he is not satisfied and refuses to accept or pay for it.Bryan is honest in his dissatisfaction, but he is unreasonable.In this situation:

A)Bryan must pay for the suit even if he is dissatisfied.
B)this is an illusory contract, because only Anita is bound.
C)Bryan's approval is to be judged by an objective standard.
D)Anita has no recourse against Bryan, because she agreed to the subjective standard.

Question 54

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

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

Question 55

Steven owes Tina $100 for a used computer which he bought last year at Tina's garage sale.The two agree that the debt can be paid by Steven's shoveling snow from Tina's driveway from January through March.The new contract is a(n):

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

Question 56

The principle illustrated in the Christy v.Pilkinton case is:

A)a breach of contract is material if it is an intentional breach.
B)subjective impossibility does not discharge the contractual duty of the party.
C)objective impossibility generally discharges the contractual duty of the party.
D)commercial impracticability occurs when performance can only be accomplished under unforeseen and unjust hardship.

Question 57

Rebecca sees a pair of beautiful silver shoes in a store window.She goes in and tells the shopkeeper, "If I am asked to the prom, I will buy those shoes.Please hold them for me for two weeks." If the shopkeeper signs a note that says, "Will hold until May 5 for Rebecca silver shoes, style 1028, size 8," will he have to honor that promise?

A)Yes, and there is a condition precedent to the contract.
B)Yes, there is a contract with a condition subsequent.
C)No, there is no contract but simply an illusory promise.
D)No, a contract is formed after Rebecca is asked to the prom.

Question 58

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

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

Question 59

In the case of Michael Silvestri v.Optus Software, Inc., the court held:

A)an objective standard is typically applied to satisfaction clauses in employment contracts.
B)an objective standard must be used in determining what is satisfactory performance in any "satisfaction" contracts.
C)idiosyncratic judgments as to what constitutes satisfactory employee performance are inherently unfair and should not be allowed.
D)in judging a high-level manager's satisfactory performance, a subjective test is appropriate.

Question 60

Which of the following would be considered a material breach of a contract?

A)Partial performance that omits some essential part of the contract.
B)Delivery of 50 chairs in a contract that calls for 100 chairs.
C)An intentional breach of the contract.
D)All of the above would be material breaches.
E)Only (a) and (b) above would be material breaches.

Question 61

Discuss the contractual conditions of performance to the satisfaction of someone.

Question 62

Al owes Tracy $500, due June 1.Al, Tracy, and Ted mutually agree that Ted will pay Tracy instead of paying Al the money Ted owes Al, and Al will be discharged from his debt to Tracy.Such an agreement is an example of:

A)an accord.
B)a novation.
C)a satisfaction.
D)a rescission.

Question 63

Explain what may constitute a material breach and list the several basic principles that must be applied to determine if a material breach exists in a given contract.

Question 64

Austin enters a contract with Bess to remodel her kitchen within one month.He repeatedly comes to her house to start the project, but Bess does not let him begin because she says she needs unrestricted use of her kitchen.Bess has:
a.not caused a discharge of Austin's duty under the contract; they will have to work out another time.
b.violated the perfect tender rule.
c.materially breached the contract by substantially interfering with or preventing Austin's performance.
d.created an accord.

Question 65

What is a condition? Give an example of each of the following types of conditions: condition precedent, condition concurrent, conditions subsequent.

Question 66

Louis agreed to provide all the apples that Cindy's Cider Mill will need at $5 per bushel unless weather conditions require additional labor to be hired.The rate would then be $5.50 per bushel.A freeze warning required Louis to hire additional overtime workers, raising the cost per bushel to $6.75.Louis wants to get out of his contract.Can he?

A)No, the parties expected the hardship and provided for it in their contract.
B)No, there is no hardship.
C)Yes, the contract is commercially impracticable.
D)Yes, the freeze is a supervening event.

Question 67

Russell promises to deliver and install living room carpeting for Nina.Classify as an express, implied-in-fact, or implied-in law condition Nina's notification to Russell of her choice of type and color of carpeting.Compare and contrast this condition with the other two types of contractual conditions.

Question 68

Russell and Joe make a contract for Russell to manufacture five leather chairs of a specified design.Prior to their manufacture, the factory is destroyed in an accidental fire that is no one's fault.The chairs are available from other sources.In this case:

A)Russell must supply the chairs, even if he must buy them elsewhere.
B)Russell's duty to deliver the chairs is discharged by the destruction of the factory.
C)Russell has materially breached the contract if he fails to deliver the chairs.
D)Two of the above, (a) and (c).