Question 1

Good Food Groceries,Inc.enters into a contract to sell Sarah's Corner Shop a truckload of eggs from free range chickens.Good Food Groceries then fails to deliver the eggs to Sarah's Corner Shop.Sarah

Accepted Answer

A) must still pay for the eggs or she will be in breach of contract. 
B) does not have to pay for the eggs because Good Food Groceries failed to perform. 
C) must still pay for the eggs,but can file suit against Good Food Groceries for breach of contract. 
D) does not have to pay for the eggs,but is not allowed to file suit against Good Food Groceries for breach of contract.

Question 2

Ben and Andrew are parties to a contract.They agree on a novation.The novation does NOT require

Accepted Answer

A) the existence of a previous,valid obligation. 
B) agreement by all the parties to a new contract. 
C) performance of the original contract by all of the parties. 
D) a new,valid contract.

Question 3

Dino hires Eve to perform at Dino's Club,but Eve later breaches the agreement to accept a higher-paying job at First Star Arena.Dino files a suit against Eve.The court will most likely

Accepted Answer

A) award damages to Dino. 
B) cancel Dino and Eve's contract. 
C) order Eve to perform the contract. 
D) rewrite Dino and Eve's contract.

Question 4

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

Accepted Answer

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 5

Barbara and Johann are parties to a contract.They agree on a novation.The novation requires

Accepted Answer

A) the existence of a previous,valid obligation. 
B) consideration greater than $5,000. 
C) performance of the original contract by all of the parties. 
D) an accord and satisfaction.

Question 6

Objective impossibility discharges a contract.

Accepted Answer

A) True 
 B)False

Question 7

A liquidated damages provision is the same thing as a penalty provision.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

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

Question 9

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

Accepted Answer

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

Question 10

Consequential damages are foreseeable damages that arise from a party's breach of a contract.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

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

Question 12

A novation occurs when there is a substitution,by agreement,of a new contract for an old one,with the rights under the old one being terminated.

Accepted Answer

A) True 
 B)False

Question 13

Only personal contracts can be discharged by agreement of the parties.

Accepted Answer

A) True 
 B)False

Question 14

Expenses that are caused directly by a breach of contract-such as those in?curred to obtain performance from another source-are compensatory dam?ages.

Accepted Answer

A) True 
 B)False

Question 15

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

Accepted Answer

A) True 
 B)False

Question 16

Home Delivery Corporation and Interstate Transport,Inc.,sign an agree?ment that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti?mate but approximately $1,000." This is

Accepted Answer

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

Question 17

A contract will be discharged if unforeseeable circumstances make it impossible to attain the contract's purpose.

Accepted Answer

A) True 
 B)False

Question 18

Performance that provides a party with most of the benefits of a con?tract,in spite of a deviation from the terms,is substantial performance.

Accepted Answer

A) True 
 B)False

Question 19

A novation requires the existence of a previous,valid obligation.

Accepted Answer

A) True 
 B)False

Question 20

Quasi contracts allow the courts to act as if a contract exists when there is no contract.

Accepted Answer

A) True 
 B)False

Exam 16: Contract Discharge and Remedies

Good Food Groceries,Inc.enters into a contract to sell Sarah's Corner Shop a truckload of eggs from free range chickens.Good Food Groceries then fails to deliver the eggs to Sarah's Corner Shop.Sarah

Ben and Andrew are parties to a contract.They agree on a novation.The novation does NOT require

Dino hires Eve to perform at Dino's Club,but Eve later breaches the agreement to accept a higher-paying job at First Star Arena.Dino files a suit against Eve.The court will most likely

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

Barbara and Johann are parties to a contract.They agree on a novation.The novation requires

Objective impossibility discharges a contract.

A liquidated damages provision is the same thing as a penalty provision.

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

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

Consequential damages are foreseeable damages that arise from a party's breach of a contract.

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 novation occurs when there is a substitution,by agreement,of a new contract for an old one,with the rights under the old one being terminated.

Only personal contracts can be discharged by agreement of the parties.

Expenses that are caused directly by a breach of contract-such as those in?curred to obtain performance from another source-are compensatory dam?ages.

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

Home Delivery Corporation and Interstate Transport,Inc.,sign an agree?ment that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti?mate but approximately $1,000." This is

A contract will be discharged if unforeseeable circumstances make it impossible to attain the contract's purpose.

Performance that provides a party with most of the benefits of a con?tract,in spite of a deviation from the terms,is substantial performance.

A novation requires the existence of a previous,valid obligation.

Quasi contracts allow the courts to act as if a contract exists when there is no contract.