Deck 18: Performance and Remedies

Question 1

Emma had contracted with Queen Arts Inc. to perform a ballet. A day before the program, there was a fire and the dance floor was burnt. Hence, Emma could not perform. Since Emma cannot perform her contractual duties, she is liable for material breach.

Answer 1

False

Question 2

Promisors in complete performance contracts who do not completely perform their contractual duties cannot recover the contract price. They may, however, recover in quasi contract for benefits conferred on the other party.

Answer 2

True

Question 3

Rob's construction firm did not give Casey a certificate, issued by Timothy Engineering Firm, indicating that the work has been completed to satisfaction. Hence, Casey has no duty to pay Rob's firm.

Answer 3

True

Question 4

Tony contracted to buy wheat from Brown, a farmer. It was contracted that Tony would pay Brown three days after the delivery of the wheat. Brown's delivery would be a(n) _____ of Tony's duty to pay.

A) implied concurrent condition
B) condition subsequent
C) constructive concurrent condition
D) constructive condition precedent

Question 5

If the happening of a condition discharges an existing duty to perform, this is called a condition precedent.

Question 6

If a statute or government regulation enacted after a contract's creation makes performance of a party's contractual duties illegal, the promisor is excused from performing.

Question 7

Conditions in contracts:

A) should not be created orally.
B) can be created only by using special words.
C) can be impliedly created.
D) should always occur concurrently.

Question 8

Tim and Sam entered into a bilateral contract that does not state a time for performance. In this case, the law infers that each party's performance is a:

A) condition subsequent of the other party's duty to perform.
B) constructive concurrent condition of the other party's duty to perform.
C) constructive condition precedent of the other party's duty to perform.
D) condition precedent of the duty of both parties to perform.

Question 9

Which of the following is true of anticipatory repudiation?

A) It occurs if promisors, prior to the time for performance, indicate an intent not to perform their duties under the contract.
B) Its indication can arise only from implicit actions, and the other party can sue after two weeks for breach of contract.
C) It occurs when the promisee's performance fails to reach the degree of perfection the other party is justified in expecting under the circumstances.
D) Its indication can arise only in the form of an express statement by the promisor and the other party cannot treat the contract as breached.

Question 10

If an event must occur before a party's duty to perform arises, it is called a concurrent condition.

Question 11

Shawn and Harry signed a contract for Shawn to build a house for Harry according to the specifications provided by Harry. The contract stated that Shawn would be paid $125,000. Shawn unintentionally deviated from the specifications in several minor respects. The house was soundly constructed, and Shawn completed the work within the promised time. Harry refused to pay Shawn any of the $125,000, arguing that the house did not conform to the specifications. In this case,

A) Harry will get a decree of specific performance.
B) Shawn has no right to be paid for any of his work because he breached the contract.
C) if the court finds that Shawn has substantially performed, he will be able to recover the contract price less any damages caused by his failure to perform as promised.
D) if the court finds that Shawn has substantially performed, he will be able to recover the contract price less any damages caused to him because of the delay in payment.

Question 12

What constitutes substantial performance is strictly defined by statutory law and/or judicial precedent.

Question 13

Under the doctrine of anticipatory breach, performance is excused when events occur after the formation of the contract that would make the return performance of the other party worthless to the promisor.

Question 14

If the legal remedies for breach of contract are not adequate to fully remedy a party's injuries, a court has the discretionary right to grant an equitable remedy.

Question 15

Robert was under contract to play football for the United Lions in May 2007. However, he died in an accident before he could perform his contract. His death will terminate his contract.

Question 16

Punitive damages are recoverable for breach of contract.

Question 17

If the contract calls for the parties to perform their duties at the same time, each party's duty to perform is conditioned on the other party's performance. These conditions are called conditions subsequent.

Question 18

The promisor who substantially performs is generally entitled to the contract price less any damage the other party has suffered as a result of the defective performance.

Question 19

If the parties' agreement is represented by a written instrument, a non-material, negligent alteration of the instrument by one of the parties discharges the other party.

Question 20

Generally, a party's contractual duty to perform arises at the time the contract is formed, even though the time for performing is set for a future date. The parties may, however, provide that a party's duty to perform is qualified by the happening of some event, or condition.

Question 21

A party suing for breach of contract who has suffered actual losses as a result of the breach is entitled to recover _____.

A) nominal damages
B) punitive damages
C) liquidated damages
D) compensatory damages

Question 22

The time limit set by the Uniform Commercial Code statute of limitations for contracts involving the sale of goods is _____ from the time the goods are tendered.

A) four years
B) seven years
C) ten years
D) twenty years

Question 23

Adam contracts to sell Ben 100 widgets for $100, for use in Ben's factory. Adam does not know that Ben's factory is closed as it is waiting for the supply of widgets from Adam. Which of the following statements is true of the damages caused due to late delivery?

A) Adam will be liable for compensatory damages.
B) Adam will be liable for consequential damages.
C) Adam will not be liable for consequential damages.
D) Adam will be liable for nominal damages.

Question 24

Rebecca contracted Matthew Properties Inc. to repair her apartment for $20,000. On completion of repairs, Rebecca observed that the garage and the attic had not been repaired. Although the contract stated that Matthew Properties will repair the garage and the attic thoroughly, Rebecca did not raise the issue. She instead made a full payment for the services rendered. In this scenario, Matthew Properties Inc. has been discharged from obligations of repairing the garage and the attic by a(n):

A) statute of limitations.
B) waiver.
C) occurrence of condition subsequent.
D) alteration.

Question 25

Logan, a farmer, had agreed to supply corn to Roxy Inc. Unfortunately, his crops wilted due to extreme temperatures. Logan decided to terminate its agreement as he could not find suitable substitutes for the crops. However, Logan can be excused for nonperformance on grounds of:

A) commercial impracticability.
B) illness or death of the promisor.
C) non-occurrence of condition subsequent.
D) destruction of subject matter.

Question 26

Which of the following statements is true of personal service contracts?

A) Specific performance is generally granted for personal service contracts because it does not require a form of involuntary servitude.
B) Personal service contracts are the only contracts that terminate with the promisor's death.
C) Personal service contracts include destruction to subject matter that can result in nonperformance.
D) Personal service contracts recognize commercial impracticability as an excuse when unforeseeable developments take place.

Question 27

Punitive damages:

A) are recoverable only when extreme circumstances justify penalizing the defendant.
B) are ordinarily available in contract cases.
C) do not allow plaintiffs to collect damages for injuries such as emotional distress.
D) are not available if the plaintiff can sue in tort for a bad faith breach.

Question 28

Consequential damages:

A) occur when the special circumstances of the plaintiff cause him or her to suffer losses that would not ordinarily be foreseeable as a result of the breach.
B) are recoverable unless the defendant had reason to foresee them at the time the contract was created.
C) are measured by the loss in value of the promised performance.
D) are very small damages that the court may award the plaintiff when a technical breach of contract has occurred without causing any actual loss.

Question 29

_____ damages are very small damages that the court may award the plaintiff when a technical breach of contract has occurred without causing any actual loss.

A) Nominal
B) Punitive
C) Liquidated
D) Compensatory

Question 30

A liquidated damage provision will be enforced when:

A) a technical breach of contract has occurred without causing any actual loss.
B) the amount specified is reasonable and actual damages are difficult to determine.
C) the nature of the contract is such that damages are easy to determine.
D) the amount agreed on is not the injured party's exclusive remedy.

Question 31

_____ damages are not recoverable unless the defendant had reason to foresee them at the time the contract was created.

A) Compensatory
B) Consequential
C) Liquidated
D) Punitive

Question 32

Which of the following is true of discharge of contracts?

A) Both parties to a contract are discharged when they have completely performed their contractual duties.
B) A contract created by mutual agreement between two parties cannot be discharged by mutual agreement.
C) A party who has breached a contractual duty may be discharged from liability for breach if the other party brings suit within the statute of limitations.
D) If a party consents to an alteration, he or she is discharged.

Question 33

Which of the following is true about building and construction contracts?

A) The promisee who is dissatisfied with the mechanical fitness, utility, or marketability may reject the performance without liability, even if doing so is unreasonable.
B) The engineer's or architect's certificates, which are often issued at each stage of completion, indicate that the work is done to the satisfaction of the architect or engineer.
C) The building and construction contracts require the builder to give the owner an engineer's certificate for satisfactory performance after the owner has paid the builder for the project.
D) The courts require the promisee to accept performance that would satisfy a reasonable person for contracts involving matters of personal taste and comfort.

Question 34

Roy was doing repair work in Melinda's apartment. He saw a deep crack in the floor but did not repair it at the time. Later while working on the ceiling, his ladder got stuck in the crack, and he injured himself. Which of the following statements is true of damages in this case?

A) Roy can impose consequential damages on Melinda.
B) Roy can recover for injuries under the specific performance decree.
C) Roy cannot recover for injuries that could have been easily avoided.
D) Roy cannot recover damages until he gets an injunction.

Question 35

Plaintiffs who have been injured by a breach of contract:

A) should minimize the damages they suffer even if the risk is high.
B) have a duty to mitigate the damages they suffer.
C) can recover damages for injuries they could easily have avoided.
D) cannot recover their damages.

Question 36

The duty to mitigate damages:

A) is not applicable unless the defendant had reason to foresee them at the time the contract was created.
B) requires the plaintiff to recover damages only in case of physical injuries.
C) allows the non-breaching party to waive his or her right to insist on complete performance.
D) requires the plaintiff to do so without undue risk, expense, or humiliation.

Question 37

Under the commercial frustration doctrine, performance is excused when:

A) statutes and legislation make the performance more difficult.
B) something that is essential to the promisor's performance is destroyed through no fault of the promisor, but its substitute is available.
C) events occur after the formation of the contract that would make the return performance of the other party worthless to the promisor.
D) the promisor impliedly assumes the risk that the event would occur.

Question 38

Kids' Corner, a toy store, ordered a supply of stuffed toys from Toyland Inc. The toys were supposed to be delivered on December 1 but were sent to Kids' Corner on December 5. There has been a(n) _____ of contract.

A) compensatory breach
B) anticipatory breach
C) material breach
D) concurrent breach

Question 39

Which of the following statements is true about discharge by alteration?

A) When a parties' agreement is represented by a written instrument, a material, intentional alteration of the instrument by one of the parties does not discharge the other party.
B) When a party does not consent to an alteration or objects to it after learning of it, he or she is not discharged.
C) Alterations by third parties without the knowledge or consent of either contracting party do not affect the parties' rights.
D) Discharge by alteration involves statutorily establishing reasonable time within which a lawsuit must be brought.

Question 40

Commercial frustration:

A) is very similar to impracticability.
B) occurs when the event is foreseeable.
C) excuses performance when events occur before the formation of the contract.
D) occurs when the promisor expressly assumes the risk that the event has occurred.

Question 41

An employee with special skills who has agreed not to work for a competitor may be enjoined from breaching his or her contract and working for that competitor by:

A) a mandatory injunction.
B) liquidated damage provisions.
C) a prohibitory injunction.
D) nominal damage provisions.

Question 42

Explain the differences between conditions precedent, conditions subsequent, and concurrent conditions.

Question 43

Injunctions are:

A) mandatory if the court orders a party to refrain from doing certain acts.
B) not a form of equitable remedy, which is granted depending on the equities of a case.
C) used to compel personal service.
D) available when a breach of contract threatens to produce an irreparable injury.

Question 44

Which of the following is the most common subject of specific performance decrees?

A) Real estate
B) Automobiles
C) Personal service
D) Internet software

Question 45

Describe the doctrines of commercial impracticability and commercial frustration.

Question 46

Martha entered into a contract with Terry, an art dealer. According to the contract, Terry was to supply 18 th century artifacts to Martha for the play she was directing, and Martha was ready to pay $50,000 for this. Another director needed the same artifacts and was ready to pay $60,000. Terry decided not to sell the artifacts to Martha. In this case, the court may order Terry to:

A) specifically perform the contract.
B) repudiate the contract.
C) pay nominal damages.
D) substantially perform the contract.

Question 47

A mandatory injunction:

A) occurs when a court orders a party to refrain from doing a certain act.
B) occurs when a court orders a party to do a certain act.
C) is ordered to induce irreparable injury.
D) is used to compel personal service.

Question 48

Explain the remedy of specific performance.

Question 49

What is substantial performance?

Question 50

What is the duty to mitigate damages?