Deck 20: Discharge and Remedies

Question 1

Rewriting a contract to reflect what the parties had agreed on is referred to as rescission.

Answer 1

False

Question 2

Bob's house was damaged by fire. He got three independent appraisals regarding the damage and submitted those to his insurer informing the insurer that he was willing to use the lowest appraisal as a basis for his insurance reimbursement. The adjuster for the insurance company asked Bob to submit to an oral examination under oath regarding the fire, but Bob refused. The insurance company denied reimbursement based on Bob's refusal to provide the examination under oath. Which of the following is true regarding whether Bob should be allowed to recover under the policy if the court follows the case in the text Hamilton v. State Farm Fire & Casualty Insurance Company?

A) The insurer will prevail if it can establish actual prejudice based on Bob's refusal to provide an examination under oath.
B) The insurer will prevail based on Bob's refusal to provide an examination under oath regardless of whether or not it can establish actual prejudice.
C) Bob will prevail even if he refuses to provide an examination under oath, but he will not be allowed to recover penalties or attorney fees.
D) Bob will prevail only if he is able to establish that the insurer was not prejudiced by his refusal to provide an examination under oath; and, assuming he is able to do so, he will be allowed to recover penalties and attorney fees.
E) Bob will prevail without any obligation to establish that the insurer was not prejudiced by his refusal to provide an examination under oath, and he will also be allowed to recover penalties and attorney fees.

Answer 2

The insurer will prevail if it can establish actual prejudice based on Bob's refusal to provide an examination under oath.

Question 3

Which of the following is true regarding ways by which a party's contractual obligations may be discharged?

A) Performance is the only way a party's contractual obligations may be discharged.
B) The failure of a condition to occur and performance are the only ways a party's contractual obligations may be discharged.
C) Operation of law is the only way a party's contractual obligations may be discharged.
D) Discharge may occur through material breach by one or both parties.
E) Discharge may not occur through the failure of a condition to occur.

Answer 3

Discharge may occur through material breach by one or both parties.

Question 4

Which of the following describes conditions explicitly stated in the contract?

A) Express
B) Implied
C) Conditional
D) Concurrent
E) Certain

Question 5

Contracts containing conditions affecting the performance obligations of the parties are called ______ contracts.

A) Uncertain
B) Conditional
C) Unreasonable
D) Voidable
E) Void

Question 6

Restitution is the return of any property given up under the contract.

Question 7

The most frequently awarded damages are compensatory damages.

Question 8

Contractual conditions may be expressly inserted into the contract by the parties but may not be implied by law.

Question 9

When an enforceable contract does not exist, the court may grant a recovery based on quasi-contract in order to prevent an injustice from occurring.

Question 10

Under ordinary circumstances, a party's duty to perform a promise agreed to in a contract is absolute.

Question 11

Substitution of a party to a contract is called guaranteeing.

Question 12

Which of the following describes conditions that are not explicitly stated but are inferred from the nature and language of the contract?

A) Express
B) Implied
C) Conditional
D) Concurrent
E) At large

Question 13

Which of the following is true regarding types of conditions?

A) There is only one type of condition: precedent.
B) There are two types of conditions: precedent and subsequent.
C) There are three types of conditions: precedent, subsequent, and concurrent.
D) There are four types of conditions: precedent, subsequent, concurrent, and timeliness.
E) There are at least ten types of conditions, and their identification varies based upon the subject matter.

Question 14

When a party's obligations under a contract are terminated, the party is said to be ____.

A) Finished
B) Terminated
C) Completed
D) Discharged
E) Recoursed

Question 15

A condition ______ is a particular event that must occur in order for a party's duty to arise.

A) Precedent
B) Subsequent
C) Concurrent
D) At large
E) Certain

Question 16

A condition ______ is a future event that terminates the obligations of the parties when it occurs.

A) Precedent
B) Subsequent
C) Concurrent
D) At large
E) Certain

Question 17

Which of the following conditions occur when each party's performance is conditioned on the performance of the other?

A) Precedent
B) Subsequent
C) Concurrent
D) At large
E) Certain

Question 18

In a case where no actual damages result from the breach of a contract, the court may award the plaintiff nominal damages.

Question 19

Specific performance is an order requiring that the breaching party fulfill the terms of the agreement.

Question 20

Liquidated damages will be enforced based upon the free-will concept of contracts even if the liquidated damages amount is unreasonable.

Question 21

A contractual condition of satisfaction is considered a[n] ______ condition that must be met before the other party's obligation to pay for the performance arises.

A) Partial
B) Conditional
C) Express
D) Implied
E) Concurrent

Question 22

Monetary damages are also referred to as ______ damages.

A) Equitable
B) Fair
C) Public
D) Legal
E) Injunctive

Question 23

If a contract does not clearly specify that the satisfaction is to be personal, the ______ standard applies.

A) Express
B) Subjective
C) Objective
D) Absolute
E) Unbiased

Question 24

Which of the following is used as a basis for discharge by operation of law when performance is still objectively possible but would be extraordinarily injurious or expensive to one party?

A) Frustration of purpose
B) Commercial impracticability
C) Alteration of the contract
D) Anticipatory repudiation
E) Anticipatory renunciation

Question 25

Which of the following doctrines arose from cases in England in which parties who had contracted for rooms along a parade route for a king's coronation, received their money back when the coronation was canceled because the king became ill?

A) Frustration of purpose
B) Commercial impracticability
C) Alteration of the contract
D) Anticipatory repudiation
E) Anticipatory renunciation

Question 26

Which of the following occurs when a contracting party refuses to complete the contract before the actual time of performance?

A) Preemptive repudiation
B) Anticipatory repudiation
C) Advance refusal
D) Advance repudiation
E) Preparatory refusal

Question 27

Which of the following occurs when, instead of canceling a contract, the parties substitute a new agreement in place of the original?

A) Accord and satisfaction
B) Novation
C) Substituted contract
D) Mutual rescission
E) Alteration

Question 28

The parties' discharge of their obligations by doing what they respectively agreed to do under the terms of the contract is called ____.

A) Discharge by tender
B) Discharge by performance
C) Discharge by finishing
D) Discharge by absolution
E) Discharge by reason

Question 29

Which of the following occurs when all aspects of the parties' duties under the contract are carried out perfectly?

A) Complete performance
B) Substantial performance
C) Significant performance
D) Absolute performance
E) Approved performance

Question 30

A[n] _____ discharges the nonbreaching party from his or her obligations under the contract.

A) Immaterial breach
B) Substantial breach
C) Material breach
D) Delineated breach
E) Crossed breach

Question 31

A contractual condition of satisfaction may be judged by either a[n] ______ or ______ standard.

A) Objective; express
B) Subjective; express
C) Objective; absolute
D) Absolute; express
E) Objective; subjective

Question 32

Which of the following occurs when a party unjustifiably fails to substantially perform his or her obligations under the contract?

A) Immaterial breach
B) Substantial breach
C) Material breach
D) Delineated breach
E) Crossed breach

Question 33

Which of the following are the two primary kinds of performance?

A) Partial and significant
B) Partial and complete
C) Partial and substantial
D) Complete and substantial
E) Complete and significant

Question 34

Which of the following occurs when the parties to the agreement wish to replace one of the parties with a third party?

A) Accord and satisfaction
B) Novation
C) Substituted contract
D) Mutual rescission
E) Alteration

Question 35

Which of the following occurs when parties agree that they simply wish to discharge each other from their mutual obligations and therefore rescind or cancel the contract?

A) Accord and satisfaction
B) Novation
C) Substituted contract
D) Mutual rescission
E) Alteration

Question 36

An offer of performance by being ready, willing, and able to perform is known as ____.

A) Offering
B) Showing
C) Tender
D) Completer
E) Implied acceptance

Question 37

Which of the following damages are designed to put the plaintiff in the position he or she would have been in had the contract been fully performed?

A) Equitable
B) Compensatory
C) Public
D) Legal
E) Punitive

Question 38

Which of the following is not a way in which a contract may be discharged by operation of law?

A) Alteration of the contract
B) Bankruptcy
C) Impossibility of performance
D) Accord and satisfaction
E) Commercial impracticability

Question 39

Which of the following is used when, by agreement one of the parties substitutes a different performance for his or her original duty under the contract?

A) Accord and satisfaction
B) Novation
C) Substituted contract
D) Mutual rescission
E) Alteration

Question 40

A _____ occurs whenever a party fails to perform his or her obligations under the contract.

A) Split
B) Break
C) Breach
D) Misdeed
E) Mistake

Question 41

Which of the following types of damages are designed to punish the defendant and deter him and others from engaging in similar behavior in the future?

A) Consequential
B) Punitive
C) Liquidated
D) Nominal
E) Repugnant

Question 42

Why did equitable remedies come into being?

A) To fashion remedies when the existing laws did not provide any adequate ones.
B) To supplement compensatory damages with punitive damages.
C) To provide a way to award nominal damages.
D) To provide a way to award consequential damages.
E) To provide a way to award certain parties liquidated damages.

Question 43

Under which of the following type of damages do the parties specify in advance the damages if there is a particular kind of breach?

A) Consequential
B) Punitive
C) Liquidated
D) Nominal
E) Repugnant

Question 44

Which of the following requires that the breaching party fulfill the terms of the agreement?

A) Specific obligation
B) Specific performance
C) Absolute obligation
D) Identified obligation
E) Absolute performance

Question 45

Powder Room Mess." For $300,000, Willis agrees to build a new home for Robert, who is very picky. Willis builds the home to Robert's specifications with one exception. The faucets and linoleum flooring in an upstairs powder room are not exactly what Robert specified. That was a mistake on Willis' part, but he had not intentionally failed to follow specifications. When Robert sees the powder room, he goes ballistic and tells Willis that he will not pay Willis anything for the house. It will take $300 to put in correct faucets and linoleum. Willis says that he is willing to pay $300 to put Robert in the position he would have been in had the correct faucets and linoleum been used, but that is all he is willing to pay.

-Which of the following is true regarding the appropriate amount of damages, if any?

A) There are no damages because Willis did not breach the contract.
B) Robert will not have to pay for the house because Willis failed to perform as required.
C) Even though Willis substantially performed, Robert will not have to pay for the house because Willis materially breached the contract.
D) Robert is released from paying for the house because of the anticipatory breach.
E) Any damages awarded would be in the range of $300, the amount it would take to fix the breach.

Question 46

Powder Room Mess." For $300,000, Willis agrees to build a new home for Robert, who is very picky. Willis builds the home to Robert's specifications with one exception. The faucets and linoleum flooring in an upstairs powder room are not exactly what Robert specified. That was a mistake on Willis' part, but he had not intentionally failed to follow specifications. When Robert sees the powder room, he goes ballistic and tells Willis that he will not pay Willis anything for the house. It will take $300 to put in correct faucets and linoleum. Willis says that he is willing to pay $300 to put Robert in the position he would have been in had the correct faucets and linoleum been used, but that is all he is willing to pay.

-Willis' offer to put Robert in the position he would have been in had the proper faucets and linoleum been used is based on the measure used for what type of damages?

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

Question 47

Which of the following are foreseeable damages within the contemplation of the parties at the time the contract was made, and that result from special facts and circumstances arising outside the contract itself?

A) Consequential
B) Punitive
C) Liquidated
D) Nominal
E) Repugnant

Question 48

Powder Room Mess." For $300,000, Willis agrees to build a new home for Robert, who is very picky. Willis builds the home to Robert's specifications with one exception. The faucets and linoleum flooring in an upstairs powder room are not exactly what Robert specified. That was a mistake on Willis' part, but he had not intentionally failed to follow specifications. When Robert sees the powder room, he goes ballistic and tells Willis that he will not pay Willis anything for the house. It will take $300 to put in correct faucets and linoleum. Willis says that he is willing to pay $300 to put Robert in the position he would have been in had the correct faucets and linoleum been used, but that is all he is willing to pay.

-Which of the following is true regarding the breach, if any, that occurred?

A) Willis did not breach the contract.
B) Willis materially breached the contract.
C) Willis substantially breached the contract.
D) Willis breached the contract.
E) Willis committed an anticipatory breach of the contract.

Question 49

"Dream Home." Maurice finds a dream home on the lake. He wants to buy it but is unsure whether he can get a loan. He signs a contract with the seller that he will buy the home provided that he can get a loan. Maurice also includes a contractual clause in the contract with the seller that if he loses his job before the date the purchase contract is signed, the seller will release him from any obligation. After getting a loan and buying the home, Maurice decided that he wanted new windows. He entered into a contract with a window contractor. The window contractor visited the home, but Maurice was always gone. The contractor made several attempts to reach Maurice, but Maurice would not return phone calls and made no attempt to assist the contractor with installation

-The provision that the seller will release Maurice from any obligation if he lost his job is referred to as which of the following?

A) A condition subsequent
B) A condition precedent
C) A bona fide condition
D) A condition concurrent
E) An exculpatory condition

Question 50

"Dream Home." Maurice finds a dream home on the lake. He wants to buy it but is unsure whether he can get a loan. He signs a contract with the seller that he will buy the home provided that he can get a loan. Maurice also includes a contractual clause in the contract with the seller that if he loses his job before the date the purchase contract is signed, the seller will release him from any obligation. After getting a loan and buying the home, Maurice decided that he wanted new windows. He entered into a contract with a window contractor. The window contractor visited the home, but Maurice was always gone. The contractor made several attempts to reach Maurice, but Maurice would not return phone calls and made no attempt to assist the contractor with installation

-The responsibility of Maurice to make arrangements to give the window installer access to the home is referred to as which of the following?

A) A condition subsequent
B) A condition precedent
C) An implied condition
D) An express condition
E) An acknowledged condition

Question 51

When no actual damages result from the breach of a contract, the court may award the plaintiff ______ damages.

A) Consequential
B) Punitive
C) Liquidated
D) Nominal
E) Repugnant

Question 52

______ is the termination of the contract, and ______ is the return of any property given up under the contract.

A) Rescission; restitution
B) Rescission; reformation
C) Reformation; restitution
D) Reformation; rescission
E) Rescission; compensation

Question 53

"Dream Home." Maurice finds a dream home on the lake. He wants to buy it but is unsure whether he can get a loan. He signs a contract with the seller that he will buy the home provided that he can get a loan. Maurice also includes a contractual clause in the contract with the seller that if he loses his job before the date the purchase contract is signed, the seller will release him from any obligation. After getting a loan and buying the home, Maurice decided that he wanted new windows. He entered into a contract with a window contractor. The window contractor visited the home, but Maurice was always gone. The contractor made several attempts to reach Maurice, but Maurice would not return phone calls and made no attempt to assist the contractor with installation

-The provision that Maurice did not have to buy the house unless he was able to get a loan is referred to as which of the following?

A) A condition subsequent
B) A condition precedent
C) A bona fide condition
D) A condition concurrent
E) An exculpatory condition

Question 54

The obligation to use reasonable efforts to minimize damage resulting from a breach is referred as the duty to ______ one's damages.

A) Reduce
B) Remit
C) Reform
D) Mitigate
E) Migrate

Question 55

College president Wally contracts with Alice to teach business law. Alice does a fine job teaching but gets mad at Wally and will not turn in grades. What type of order would Wally seek to require Alice to abide by her contract?

A) An order of specific performance
B) A compensatory order
C) A nominal order
D) A consequential order
E) A demand order

Question 56

Which of the following is true regarding the result in the case in the text Thrifty Rent-A-Car System v. South Florida Transport, in which the plaintiffs sued the defendant, the operator of a Thrifty franchise, for amounts owed, but the defendant resisted payment on the basis that several hurricanes rendered the business operations commercially impractical?

A) The court ruled that the bad weather completely excused the defendant's performance.
B) The court ruled that the parties had to jointly bear the burden of bad weather and that 50% of what the defendant owed would be excused.
C) The court ruled that the defendant was legally entitled to additional time in which to pay, but that the defendant would be required to pay all amounts owed.
D) The plaintiffs were entitled to recover because the defendant failed to anticipatorily repudiate the contract.
E) The plaintiffs were entitled to recover for reasons including that the nonoccurrence of hurricanes was not a basic assumption of the agreement.

Question 57

"Hawaiian Adventure." Beverly decides to go on a great trip to Hawaii. She needs someone, however, to take care of her two dogs, Creaky and Toady, while she is gone. She hires Frank three months in advance and they reach a contractual arrangement whereby he will be paid $200 for keeping the dogs for two weeks. Frank comes over two months before Beverly is set to leave, takes one look at Creaky and Toady, and declares that they are too creepy to be around. Beverly hires Alice who agrees to care for Creaky and Toady. Two weeks before Beverly is set to leave, however, Alice calls and tells her that she just broke both her legs in an automobile accident and has been put on bed rest for two months. Finally, Beverly hires Betty to care for the dogs and heads off to Hawaii where she has a great time. Unfortunately, when Beverly returns home, she finds that Betty has absconded with Creaky and Toady. They were later found in good health in an exclusive resort visited by Betty. Betty refuses to return Creaky and Toady to Beverly claiming that they were all enjoying the resort and that she had become quite attached to them.

-Which of the following is true regarding Alice's refusal to keep Creaky and Toady?

A) She is discharged from performance because of frustration of purpose.
B) She is discharged from performance because of impossibility of performance.
C) She committed a material breach.
D) She failed to substantially perform but only committed an immaterial breach.
E) She is guilty of only a nominal breach because she had a good excuse for breaching.

Question 58

"Hawaiian Adventure." Beverly decides to go on a great trip to Hawaii. She needs someone, however, to take care of her two dogs, Creaky and Toady, while she is gone. She hires Frank three months in advance and they reach a contractual arrangement whereby he will be paid $200 for keeping the dogs for two weeks. Frank comes over two months before Beverly is set to leave, takes one look at Creaky and Toady, and declares that they are too creepy to be around. Beverly hires Alice who agrees to care for Creaky and Toady. Two weeks before Beverly is set to leave, however, Alice calls and tells her that she just broke both her legs in an automobile accident and has been put on bed rest for two months. Finally, Beverly hires Betty to care for the dogs and heads off to Hawaii where she has a great time. Unfortunately, when Beverly returns home, she finds that Betty has absconded with Creaky and Toady. They were later found in good health in an exclusive resort visited by Betty. Betty refuses to return Creaky and Toady to Beverly claiming that they were all enjoying the resort and that she had become quite attached to them.

-Which of the following is true regarding Frank's refusal to keep Creaky and Toady?

A) He committed an anticipatory repudiation.
B) He is not guilty of any breach because he gave Beverly sufficient warning that he was not willing to perform.
C) He is not guilty of any breach because the contract is not over $1,000 in amount.
D) He is guilty of an immaterial breach because of the low value of the contract.
E) He is guilty of a nominal breach.

Question 59

Which of the following is an order either forcing a person to do something or prohibiting a person from doing something?

A) Specification
B) Directive
C) Instructional edict
D) Demand
E) Injunction

Question 60

From what country did equitable remedies, as applied in the U.S., grow?

A) France
B) Italy
C) England
D) Spain
E) Portugal

Question 61

List the ways by which a party's contractual obligations can be terminated.

Question 62

Set forth the elements for a finding of substantial performance and the effect of a finding of substantial performance on damages.

Question 63

Yolanda and Rodney agreed that Rodney would paint Yolanda's home for $800 with Yolanda supplying the paint. Rodney went to Yolanda's home on several occasions to do the job, but she never had the paint ready. Finally, he moves on to other jobs. Six months later Yolanda sues Rodney for not painting the home. Who is likely to win and why? Set forth the legal term for Rodney's offer of performance.

Question 64

Set forth the three main situations in which the courts find objective impossibility.

Question 65

Discuss the circumstances that result in an anticipatory repudiation of a contract. Discuss the rights of a nonbreaching party when faced with anticipatory repudiation.

Question 66

"Hawaiian Adventure." Beverly decides to go on a great trip to Hawaii. She needs someone, however, to take care of her two dogs, Creaky and Toady, while she is gone. She hires Frank three months in advance and they reach a contractual arrangement whereby he will be paid $200 for keeping the dogs for two weeks. Frank comes over two months before Beverly is set to leave, takes one look at Creaky and Toady, and declares that they are too creepy to be around. Beverly hires Alice who agrees to care for Creaky and Toady. Two weeks before Beverly is set to leave, however, Alice calls and tells her that she just broke both her legs in an automobile accident and has been put on bed rest for two months. Finally, Beverly hires Betty to care for the dogs and heads off to Hawaii where she has a great time. Unfortunately, when Beverly returns home, she finds that Betty has absconded with Creaky and Toady. They were later found in good health in an exclusive resort visited by Betty. Betty refuses to return Creaky and Toady to Beverly claiming that they were all enjoying the resort and that she had become quite attached to them.

-What will Beverly seek in order to get Creaky and Toady returned from Betty?

A) An injunction
B) Compensation
C) Punitive damages
D) Nominal performance
E) Adequate performance