Deck 10: Contract Performance,breach,and Remedies

Question 1

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

Answer 1

True

Question 2

A buyer's duty to pay becomes absolute once a contract is formed.

Answer 2

False

Question 3

Performance of an accord discharges an original contractual obligation.

Answer 3

True

Question 4

Punitive damages are almost never available in contract disputes.

Question 5

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that the clause excuses.

Question 6

Performance can be accomplished by tender.

Question 7

A party who knowingly accepts defective performance of a contract thereby acknowledges the breach and can take later action on it.

Question 8

Anticipatory repudiation is a material breach of a contract.

Question 9

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

Question 10

The most common way to discharge a contract is by breach.

Question 11

Complete performance occurs when conditions in a contract are fully satisfied.

Question 12

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

Question 13

Nominal damages normally establish that the defendant acted wrongly.

Question 14

In most contracts,promises of performance are expressly qualified.

Question 15

A contractual obligation may not be discharged through novation.

Question 16

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

Question 17

Liquidated damages provisions are usually not enforceable.

Question 18

If a party breaches a contract,the other party can choose one or more of several remedies.

Question 19

Reformation allows a court to rewrite a contract to reflect the parties' true intentions.

Question 20

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

Question 21

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 22

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 23

A contract for a sale of land from Evergreen Properties,Inc. ,to Longlife Investment Corporation contains an erroneous legal description.The most appropriate remedy for these parties is

A)damages.
B)reformation.
C)rescission.
D)specific performance.

Question 24

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 25

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 26

3D FX,LLC,and Vivid Star CG,Inc. ,are parties to a contract.They subsequently agree that Pixellated Inc.should take 3D's place and assume all of its rights and duties under the contract.This is

A)a mutual agreement to rescind.
B)an accord and satisfaction.
C)a novation.
D)commercial impracticability.

Question 27

Straitedge Toolmakers,Inc. ,contracts to sell its assets to Trulevel Hardware Corporation.Before either party has performed,rescission of this contract requires

A)a mutual agreement to rescind.
B)an accord and satisfaction.
C)a novation.
D)commercial impracticability.

Question 28

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 29

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 offer,on the same date,to pay Parker is

A)tandem.
B)tonnage.
C)tender.
D)tinder.

Question 30

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 her.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 31

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 32

Fact Pattern
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1.One month before the term begins,Bell is underbid by a competitor and loses a major client,Delta Hospital Center.Bell now refuses to hire Chris.
Refer to Fact Pattern 10-B2.Bell's repudiation is most likely

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

Question 33

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 34

Building Restoration,Inc.(BRI),enters into a contract to refurbish an old train depot for Casual Dining,Inc. ,to open as Eat Up Restaurant.If BRI completes most of the work promised in the contract,its performance will be

A)absolute.
B)complete.
C)material.
D)substantial.

Question 35

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 36

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 37

A contract between E-Debits,Inc. ,and First Credit Corporation includes a provision excluding liability as a result of fraud.This provision is

A)enforceable because the parties are protected from liability.
B)enforceable because the parties consented to it.
C)enforceable if the parties have equal bargaining power.
D)not enforceable.

Question 38

Erte holds 1,000 pounds of perishable fruit in storage for Fresh Stuff Corporation.Fresh Stuff does not pay for the storage.Erte sells the fruit to Green Grocers,Inc.This sale represents

A)a breach of contract.
B)a mitigation of damages.
C)rescission and restitution.
D)specific performance.

Question 39

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 40

Fact Pattern
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1.One month before the term begins,Bell is underbid by a competitor and loses a major client,Delta Hospital Center.Bell now refuses to hire Chris.
Refer to Fact Pattern 10-B2.Under the circumstances,with respect to damages,Chris can

A)bring an action immediately.
B)bring an action only after the contract's two-year term begins.
C)bring an action only after the contract's two-year term ends.
D)do nothing.

Question 41

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 42

General Equity Corporation enters into a contract with Honi,who agrees to create artwork for General's main office building.Honi delays and eventually refuses to perform.Meanwhile,General contracts to sell the building to Ideal Investments,Inc. ,but before the transaction is complete,Jewel Funds Company offers to pay a higher price.General refuses to transfer the building to Ideal.In separate suits by General against Honi and by Ideal against General,each plaintiff seeks specific performance.How might the court rule in each case,and why?