Question 1

In which of the following situations would anticipatory repudiation not be allowed?

Accepted Answer

A)  Tom calls Dick and says that he can't find the raw materials to complete performance and doubts he can meet the contract's performance deadline. 
B)  Sally is buying Jane's car, with the money and car to be exchanged in a week; however, Sally meets Betty, who tells her she just bought Jane's car. 
C)  Mary Beth is scheduled for knee surgery next month with Dr. Slice but reads in the paper that Dr. Slice has lost his license to practice medicine. 
D)  Manny calls Moe and tells him that the sculpture he's creating for him is coming along slower than anticipated but he's pretty sure he'll be done by the contract deadline.

Question 2

In which of the following scenarios would enforcement of specific performance be appropriate?

Accepted Answer

A)  Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day. 
B)  You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons. 
C)  You order a current-model, name-brand television from a department store, and a few days later the store breaches by not ordering it from the manufacturer. 
D)  You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute.

Question 3

In which of the following situations would a delegation of contractual duties be allowed?

Accepted Answer

A)  A surgeon performing brain surgery. 
B)  An actor hired to perform in a play. 
C)  A sculptor hired to sculpt your bust. 
D)  A painter hired to paint your home.

Question 4

Josh entered into a contract with Donna in which she was to pay $50,000 for Josh's hunting cabin.All negotiations,witnessed by various third parties,stated the $50,000 figure as the sales price.When the contract was written,a typographic error was made indicating a price of $5,000.At settlement,Donna tendered $5,000 and demanded the deed in accordance with the written contract.Must Josh sell the cabin for $5,000?

Accepted Answer

The answer of Josh entered into a contract with Donna...

Question 5

Carla has a contract with Alexis in which Alexis is to deliver 1,000 hand-decorated beverage holders in 60 days.When Carla calls the Psychic Hotline for her weekly reading,the psychic informs her that she has entered into a contract and the other party will not perform all the conditions and specifications in accordance with the agreement.Based on this knowledge,Carla may sue for an anticipatory repudiation.

Accepted Answer

A) True 
 B)False

Question 6

Beth has just signed a contract to work for a bank.A clause in the contract says that before she begins work,she must pass a drug test and should drug use be discovered,the contract becomes void.This clause would be a

Accepted Answer

A)  condition precedent. 
B)  condition subsequent. 
C)  concurrent condition. 
D)  nothing of consequence since Beth has already signed the contract.

Question 7

An event that occurs after the performance under a contract and discharges the parties' contractual obligations is best referred to as a(n)

Accepted Answer

A)  condition prerequisite. 
B)  condition antecedent. 
C)  condition subsequent. 
D)  condition precedent.

Question 8

When Olivia was a senior in high school,a small,private college to which she had been accepted announced plans to build a new and modern athletic complex with pools,spas,weight rooms,and exercise rooms for general student use.Although Olivia had been accepted at several other,less expensive colleges,she chose to enroll at the small,private school based largely on these plans as announced.However,the project was delayed,and actual construction of the facilities didn't begin until the final semester of Olivia's senior year.The facilities will not be completed before Olivia graduates from the school,and she will never get to use the facilities.What rights,if any,does Olivia have due to the delay that prevented her from using the facility?

Accepted Answer

The answer of When Olivia was a senior in high...

Question 9

Mark is an accounting major at a private university.His goal is to go to graduate school to obtain the education and appropriate credits necessary to become a certified public accountant.Mark's goals are well-known to his instructors and to the administration,who are also aware that Mark's parents and grandparents are CPAs,as are his older brothers and sisters.As Mark enters his junior year,and after paying his tuition and room and board fees in full,his school loses its regional accreditation,making any degree issued by the school essentially worthless.A worthless degree will not be recognized by graduate schools and will not be recognized by state accounting boards.When Mark demands a refund of his tuition and fees,the school refuses,claiming that it will still provide classes and knowledge.On what grounds,if any,can Mark have the contract terminated and receive a refund?

Accepted Answer

The answer of Mark is an accounting major at a...

Question 10

When a party successfully sues for an equitable remedy for a breach of contract,that party will not receive a monetary award.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is rarely awarded in contract cases?

Accepted Answer

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

Question 12

Kathy and Tom have entered into a contract in which Mike has been named and included as an intended beneficiary by Kathy.Should Tom or Kathy breach the contract,Mike may sue both Tom and Kathy for breach of contract.

Accepted Answer

A) True 
 B)False

Question 13

Compensatory damages cover a broad spectrum of losses for recovery of _______ damages suffered by the non-breaching party.

Accepted Answer

The answer of Compensatory damages cover a broad spectrum of...

Question 14

Which of the following involves a third-party substitution?

Accepted Answer

A)  novation 
B)  accord and satisfaction 
C)  substitute agreement/modification 
D)  rescission

Question 15

Sharon has contracted with Craig to buy Craig's car.She has agreed to pay $5,000 in cash in exchange for the title and registration for the vehicle.Sharon and Craig agree to meet at 10 a.m.on Wednesday to exchange their consideration.Unfortunately,Craig dies Tuesday evening.

Accepted Answer

A)  The contract automatically terminates due to impossibility caused by Craig's death. 
B)  The contract automatically terminates due to impracticability caused by Craig's death. 
C)  The contract is still valid and Craig's heirs must go through with it based on the agreed terms. 
D)  The contract is still enforceable; however, Craig's heirs may renegotiate the terms because they are now the owners of the car.

Question 16

Burt and Mel have entered into a contract in which Burt agrees to put a concrete driveway on Mel's property.If Burt delegates the duty of laying the driveway to Chuck and Chuck does an unacceptable job,Mel may sue Burt for damages.

Accepted Answer

A) True 
 B)False

Question 17

Specific performance is almost always available when a real estate contract for the sale of land is involved.

Accepted Answer

A) True 
 B)False

Question 18

Arnie and Matt are involved in a car accident.Immediately before the accident,Arnie was observed speeding and driving erratically.On the other hand,Matt was obeying the speed limit and driving in a very cautious and responsible manner.As a result of the accident,Matt's car needs $2,500 worth of repairs and Matt loses a week's salary because he has to take time off to recover from injuries sustained during the crash.Which of the following statements best describes the nature of the damages in this case?

Accepted Answer

A)  Both the repairs and the lost wages are compensatory damages. 
B)  The repairs are compensatory damages, and the lost wages are consequential damages. 
C)  The repairs are consequential damages, and the lost wages are compensatory damages. 
D)  Both the repairs and the lost wages are consequential damages.

Question 19

When parties agree to an accord and satisfaction,the original obligation subject to the accord is immediately discharged.

Accepted Answer

A) True 
 B)False

Question 20

What is the difference between compensatory damages and consequential damages?

Accepted Answer

The answer of What is the difference between compensatory damages...

Exam 7: Contract Enforceability and Performance

In which of the following situations would anticipatory repudiation not be allowed?

In which of the following scenarios would enforcement of specific performance be appropriate?

In which of the following situations would a delegation of contractual duties be allowed?

Beth has just signed a contract to work for a bank.A clause in the contract says that before she begins work,she must pass a drug test and should drug use be discovered,the contract becomes void.This clause would be a

An event that occurs after the performance under a contract and discharges the parties' contractual obligations is best referred to as a(n)

When a party successfully sues for an equitable remedy for a breach of contract,that party will not receive a monetary award.

Which of the following is rarely awarded in contract cases?

Kathy and Tom have entered into a contract in which Mike has been named and included as an intended beneficiary by Kathy.Should Tom or Kathy breach the contract,Mike may sue both Tom and Kathy for breach of contract.

Compensatory damages cover a broad spectrum of losses for recovery of _______ damages suffered by the non-breaching party.

Which of the following involves a third-party substitution?

Sharon has contracted with Craig to buy Craig's car.She has agreed to pay $5,000 in cash in exchange for the title and registration for the vehicle.Sharon and Craig agree to meet at 10 a.m.on Wednesday to exchange their consideration.Unfortunately,Craig dies Tuesday evening.

Burt and Mel have entered into a contract in which Burt agrees to put a concrete driveway on Mel's property.If Burt delegates the duty of laying the driveway to Chuck and Chuck does an unacceptable job,Mel may sue Burt for damages.

Specific performance is almost always available when a real estate contract for the sale of land is involved.

When parties agree to an accord and satisfaction,the original obligation subject to the accord is immediately discharged.

What is the difference between compensatory damages and consequential damages?