Deck 15: Contract Performance, Breach, and Remedies

Question 1

Misrepresentation of a material fact can occur by actions alone.

Answer 1

True

Question 2

In most contracts, promises of performance are absolute promises.

Answer 2

True

Question 3

Only a mistake in value will make a contract voidable.

Answer 3

False

Question 4

Contracts involving interests in any property must be in writing to be enforceable.

Question 5

The elements of fraud include the innocent party's justifiable reliance on a misrepresentation of a material fact.

Question 6

Forcing someone to enter into a contract by threatening to do something that the threatening party has no right to do is duress.

Question 7

Any breach-material or minor-discharges the nonbreaching party from the contract.

Question 8

As a general rule, any contract duty can be delegated.

Question 9

Under the Statute of Frauds, all contracts must be in writing to be enforceable.

Question 10

Voluntary consent can be used as a defense to the enforceability of a contract if the consent is lacking because of a mistake.

Question 11

When anticipatory repudiation occurs, the nonbreaching party is permitted to bring an action for damages immediately.

Question 12

An incidental beneficiary cannot sue the promisor directly for breach of the contract.

Question 13

Performance can be accomplished by tender.

Question 14

In most contracts, promises of performance are expressly conditioned.

Question 15

The most common way to discharge one's contractual duties is by novation.

Question 16

A contractual obligation may not be discharged through novation.

Question 17

Anything less than complete performance is a material breach of contract.

Question 18

If a contract states that a right cannot be assigned, then ordinarily it cannot be assigned.

Question 19

To qualify as substantial performance, the performance must not vary greatly from the performance promised in the contract.

Question 20

Intentionally failing to comply with the terms of a contract is a breach.

Question 21

Beau sells a car to Cody without disclosing that the odometer, which reads 40,000 miles, was disconnected 80,000 miles ago.Beau is liable for

A)nothing.
B)fraud.
C)mistake.
D)undue influence.

Question 22

Lyra induces Moe to enter into a contract for the sale of an apartment about which Lyra fraudulently misrepresents a number of material facts.Lyra tells Moe that her commission is 6 percent, but their signed, written contract states "12 percent." The Statute of Frauds governs

A)contracts that are induced by fraud.
B)contracts that must be in writing to be enforceable.
C)the admissibility in court of oral evidence.
D)the reformation of oral and written statements into one contract.

Question 23

The duty owed under the mitigation of damages doctrine depends on the nature of the contract.

Question 24

Consequential damages are awarded for damage caused by special circumstances beyond a contract.

Question 25

When damages are an inadequate remedy for a breach of contract, a court may consider an equitable remedy.

Question 26

Genie.com initiates an online dating service.To attract subscribers and encourage participation, Genie.com creates and posts profiles of fictitious persons and exaggerated profiles of actual users.Fooled by the false profiles, Ham buys a subscription.He is most likely a victim of

A)undue influence.
B)fraud.
C)mistake.
D)nothing.

Question 27

The measurement of compensatory damages for breach of contract is the same for all types of contracts.

Question 28

Maya is a stockbroker.Nora believes that the price of OK Goods, Inc.(OKGI), a widely traded stock, is going to increase substantially.Through Maya, Nora buys 500 shares of OKGI at $10 per share, but the price soon drops to $2.Nora can successfully recover from Maya

A)nothing.
B)the amount of the purchase price.
C)the amount of the purchase price plus the expected increase.
D)the amount of the purchase price plus the unexpected decrease.

Question 29

Urban City and Thru-way Construction Company enter into a contract that includes calculations.Urban, whose engineer, Sergei, compiled the figures, discovers later that some numbers were added incorrectly, but Thru-way refuses to make changes.Urban can

A)not rescind the contract.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of duress.

Question 30

Quasi contract is a legal theory under which an obligation is imposed in the absence of an agreement.

Question 31

A contract is discharged when its specific subject matter is destroyed.

Question 32

A breach of contract entitles the nonbreaching party to sue for damages.

Question 33

Contracts for the sale of goods usually qualify for specific performance.

Question 34

Liquidated damages provisions are usually not enforceable.

Question 35

Equitable remedies include rescission and restitution.

Question 36

An accord and its satisfaction can discharge a contractual obligation.

Question 37

Specific performance is an equitable remedy.

Question 38

Rescission advances the contracting parties to the position they would have been in if the contract had been fully performed.

Question 39

The standard measure of compensatory damages is the value of the breaching party's performance under a contract.

Question 40

An innocent party is discharged when the other party has materially altered a written contract without consent.

Question 41

Dylan enters into a contract to manage the operations of Cash's accounting office for one year, renewable for subsequent one-year terms.If this contract is discharged like most contracts, it will be

A)canceled.
B)compromised.
C)altered.
D)performed.

Question 42

Fact Pattern 12-1
Mutual Company enters into a contract to employ Neil as an investment manager for two years. During the first year, Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual’s investments.


-Refer to Fact Pattern 12-1.With respect to Mutual's duties, Neil's performance most likely

A)discharges Mutual from the contract.
B)has no effect on Mutual's performance.
C)increases Mutual's duties under the contract.
D)suspends Mutual's duty to perform.

Question 43

Vicky contracts with Rashad for the delivery of hospice services to benefit Sigmund.This is

A)a delegation.
B)an assignment.
C)a third party beneficiary contract.
D)not an enforceable contract.

Question 44

Red's Plumbing Service substantially performs its contract with Shady Grove Condominiums, Inc.Shady Grove is entitled to

A)damages.
B)nothing more.
C)repudiation.
D)alteration.

Question 45

Clyde contracts with Deephole Excavation, Inc., to dig an agricultural pond on his farm.Deephole is to keep the excavated gravel in payment.Clyde's neighbor Eden challenges the dig as an illegal gravel pit.A court orders a halt to the dig.Clyde's contract with Deephole is

A)breached.
B)discharged.
C)not affected.
D)suspended.

Question 46

Lark enters into a contract to mine limestone in Milena's quarry, sell it, and share the profits on its sale with Milena.If the duties under this contract are discharged like those under most contracts, the duties will be

A)repudiated.
B)breached.
C)performed.
D)rescinded.

Question 47

Candace enters into a contract to pay Parker for a business survey and review of Candace's competitors, which Parker delivers on June 1.Candace's unconditional offer, on the same date, to pay Parker is

A)novation.
B)specific performance.
C)tender.
D)restitution.

Question 48

Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week.When Handy cancels the contract, Ilsa spends $100 to obtain a similar job that pays $450 per week for a year.Ilsa is entitled to recover

A)the amount of the wages that Handy promised only.
B)the difference between the wages at the two jobs only.
C)the difference between the wages at the two jobs plus $100.
D)$100 only.

Question 49

On April 1, KO Contractors, Inc., contracts to build a store for Lo-Cost Housewares at a specific location in Metro City.On May 1, Metro changes its zoning law to prohibit the construction of a commercial building at that location.Lo-Cost files a suit against KO.In this situation

A)KO is in breach of contract.
B)Lo-Cost is in breach of contract.
C)the contract is discharged.
D)the contract is suspended.

Question 50

Real Cheap Painters, Inc., agrees to paint Quint's house, using a particular brand of "discount" paint.Real Cheap completes the job but uses a different brand of discounted paint.This is most likely

A)an absolute excuse for Quint's refusal to pay.
B)a material breach.
C)complete performance.
D)substantial performance.

Question 51

Fresh Air Filter & Purification Company and Big Box Commercial Storage Company enter into a contract.To be enforceable, the contract must be in writing if it involves

A)an interest in land.
B)an air filter that costs less than $500.
C)collateral for a loan.
D)a service that can be performed within less than a year.

Question 52

A contract between Drill-Bit Sharpeners, Inc., and East Oil Mining Corporation contains a clause stating that rights under the contract cannot be assigned.This ordinarily prohibits

A)any assignment.
B)no assignment.
C)only an assignment of contract rights to personal services.
D)only an assignment that would change the obligor's risk.

Question 53

GroundSwell Pools, Inc., agrees to build a swimming pool for Francis, but fails to complete the job.Francis hires EquiAqua, Inc., to finish the project.Francis may recover from GroundSwell

A)the contract price less costs of materials and labor.
B)the contract price.
C)the costs needed to complete construction.
D)profits plus the costs incurred up to the time of the breach.

Question 54

Jane and Kelly want Lucy to replace Kelly as a party to their contract.They can best accomplish this by

A)a mutual agreement to rescind.
B)an accord and satisfaction.
C)a novation.
D)an alteration of the contract.

Question 55

Dondi contracts to buy a custom espresso maker from Caffee Specialties, Inc., for $4,500, but Caffee fails to deliver.Dondi buys the appliance elsewhere for $5,500.Dondi's measure of damages is

A)$1,000.
B)$1,000 plus incidental damages.
C)incidental damages only.
D)$0.

Question 56

Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra.Kendra transfers her right to payment under the contract to County Bank.This transfer is

A)a delegation.
B)an assignment.
C)a third party beneficiary contract.
D)prohibited.

Question 57

Fact Pattern 12-1
Mutual Company enters into a contract to employ Neil as an investment manager for two years. During the first year, Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual’s investments.


-Refer to Fact Pattern 12-1.Neil's performance is most likely

A)a material breach.
B)a minor breach.
C)Mutual's breach.
D)no breach.

Question 58

Juana contracts to sell Ignacio her MP3 player for $30.This contract will be fully discharged when Juana and Ignacio

A)agree to sign a bill of sale.
B)exchange the player for the $30.
C)sign a receipt.
D)shake hands and go their separate ways.

Question 59

Juan and Isidro enter into a contract to buy, restore, and reopen the Coastal Park Carousel.Before either party begins to perform, they agree to cancel their deal.This is

A)substantial performance.
B)mutual rescission.
C)accord and satisfaction.
D)novation.

Question 60

George promises to repair Francesca's boat dock in exchange for Efrem's promise to plant trees on George's property.This is

A)a delegation.
B)an assignment.
C)a third party beneficiary contract.
D)not a contract.

Question 61

Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager for two years.If Rig breaches the contract, Scott has a duty to

A)do nothing.
B)reduce the damages that Scott might otherwise suffer.
C)rescind the contract with Rig.
D)sue Rig to deter others from similar acts.

Question 62

Damon contracts to repair the turf on a soccer field for Carousel Sports Park.Damon knows that without the repair, Carousel will have to cancel an upcoming game.Damon does not perform as promised.As consequential damages, Carousel can recover

A)the cost of new turf.
B)the difference between Damon's price and the actual cost of repair.
C)the loss of profit from the canceled game.
D)nothing.

Question 63

Tristan hires Stefani to perform at Tristan's Club, but she breaches the agreement to accept a higher-paying job at Rock Star Arena.Tristan files a suit against Stefani.The court will most likely

A)award damages to Tristan.
B)cancel Stefani and Rock Star's contract.
C)order Stefani to perform the contract.
D)reform Tristan and Stefani's contract.

Question 64

Lester and Myrtle want to rescind their contract under which Lester sold an MP3 player for $40.To rescind the contract

A)Lester must return the $40 and Myrtle must return the player.
B)Lester must return the $40 only.
C)Myrtle must return the player only.
D)the parties can keep the "benefits" of their bargain.

Question 65

National Drilling Company ships its only pump to American Hydraulics Corporation, the manufacturer, for repair.National hires Overland Transport, Inc., to take the pump to American Hydraulics and to return it to National as soon as the repair is complete.National is forced to suspend operations without a pump, but Overland does not know this.National expects to be without the pump for five days and to lose profits of $5,000.When the pump is not returned by the end of the fifth day, National rents a pump at a cost of $100 per day.Overland delays five more days before returning the pump.National files a suit against Overland, asking for compensatory and consequential damages.Will National recover

Question 66

Drew contracts to sell a house to Evan.The contract provides that if Drew does not close the deal by February 10, he must pay Evan one-half of the contract price.This provision is not enforceable because it is

A)a liquidated damages clause.
B)a material breach.
C)a mitigation of damages.
D)a penalty clause.

Question 67

Ralph contracts to sell his Double-R Ranch to Samantha on May 1.On April 20, Ralph tells Samantha that he will not go through with the deal.Samantha can recover

A)the cost of any property that Samantha would find suitable.
B)the cost of a similar, nearby ranch.
C)the Double-R Ranch.
D)nothing.

Question 68

SealCoat Paving enters into a contract with Royal Golf & Tennis Club to provide surface material for Royal's tennis courts by April 1 for a tournament to begin May 1.The contract specifies an amount to be paid if the contract is breached.This is a liquidated damages clause if the amount is

A)meant to pay for additional liquid sealant in the event of damage.
B)a reasonable estimate of the loss on a breach.
C)designed to penalize the breaching party.
D)intended to quickly provide cash to the nonbreaching party.

Question 69

Quicksilver Delivery Service contracts to deliver Pete's Pizza Parlor's products to its customers for $5,000, payable in advance.Pete's pays the money, but Quicksilver fails to perform.Can Pete's rescind the contract Can Pete's also obtain restitution What does it mean to "rescind" a contract How is a contract rescinded What is restitution How is restitution accomplished Explain.

Question 70

Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company.Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000.Mining ships the drill late.Lava can recover

A)$13,000.
B)$10,000.
C)$3,000.
D)$0.

Question 71

Sonny agrees to buy a unique collection of Olympics memorabilia for $7,000 from Jana and sends $1,500 as a down payment.When Sonny sends Jana the rest of the price, she refuses to ship the collection.Sonny should seek

A)a penalty.
B)liquidated damages.
C)restitution.
D)specific performance.