Deck 13: The Termination of Contracts: Discharge

Question 1

The offer to pay a sum of money, if refused, discharges the contract.

Answer 1

False

Question 2

A novation is another name for an accord and satisfaction.

Answer 2

False

Question 3

Substituting a new third party for one of the original parties is a novation.

Answer 3

True

Question 4

Under the common law, unforeseen hardships that occur after the contract is made and make performance more difficult will discharge the contract.

Question 5

Because of a severe throat ailment, Dodd, a singer, was unable to give a concert at Runson Hall according to the terms of his contract. Under the common law rule, Dodd is obligated to obtain a substitute.

Question 6

When Wilson finished painting Bryan's house, Bryan paid her the agreed price. The contract was discharged by

A) accord and satisfaction.
B) novation.
C) full performance.
D) mutual agreement.

Question 7

One party's offer to perform a contract is called an accord and satisfaction.

Question 8

If one party to a contract deliberately makes a material change in its terms without permission of the other party, the contract is discharged by impossibility.

Question 9

If a contract is discharged by substantial performance, the party who performed may recover the full contract price.

Question 10

Substantial performance does not apply to contracts calling for payment of money.

Question 11

Beaty contracted to install vinyl siding on O'Grady's house for $7,500 during the first two weeks of August. When Beaty arrived on August 1 to install the siding, O'Grady informed him that the job would have to be postponed indefinitely. Beaty's obligation to perform the contract was discharged by

A) tender of performance.
B) substantial performance.
C) agreement.
D) rescission.

Question 12

When a contract ends, the rights and duties that existed under the contract also end.

Question 13

To legally call off a contract means to rescind that contract.

Question 14

Rescission of a contract occurs when two parties mutually agree to cancel a contract they had previously made.

Question 15

Bastian, who lived in a rural area, contracted to have her wedding reception at the Vantage party house about 10 miles from her home. It was the only party house located within 150 miles. Three weeks prior to the wedding, this party house burned to the ground. Under the common law, Bastian's contract with the party house was discharged.

Question 16

Palmere owed Witmore $2,000. According to the terms of the agreement the money is due at noon on March 1 at Witmore's place of business. If Palmere tenders $2,000 in cash at the agreed place

A) on March 2, Palmere will be discharged if Witmore refuses to accept.
B) at noon on March 1, Palmere will be discharged if Witmore refuses to accept.
C) at noon on March 1, Palmere will be discharged if Witmore refuses to accept; however, Palmere remains liable for $2,000 but not for interest that accrued after March 1.
D) at noon on March 1, Witmore must accept the payment and apply it to the $2,000 debt even if Palmere is indebted to Witmore on another account.

Question 17

A refusal by a creditor to accept a debtor's offer to pay cash in settlement of his or her debt

A) discharges the debt.
B) excuses the debtor from future interest payments.
C) renews the debt for six years.
D) bars legal action by the creditor on the debt.

Question 18

Subjective impossibility usually discharges a contract.

Question 19

Both an accord and a satisfaction are needed to discharge a contract.

Question 20

A discharge by performance may not occur through

A) substantial.
B) full performance.
C) tender of performance.
D) rescission.

Question 21

Abel entered into a written agreement with Burrows to buy a horse. In the meantime, the horse died. Under the common law, this contract was discharged by

A) performance.
B) mutual agreement.
C) substantial performance.
D) impossibility.

Question 22

You borrowed $500 from the bank, agreeing to repay the money in five equal installments on the 15^th of each month. Without your permission, the bank changed the payment date to the 14^th. The contract is

A) discharged by alteration.
B) still valid.
C) discharged by rescission.
D) discharged by agreement

Question 23

____________________ occurs when all but the minor details of a contract have been completed.

Question 24

Martin was unable to pay $2,000 she owed Farmer on April 10, the due date. Martin offered her a computer and several programs in full payment instead of cash, and Farmer accepted. Martin was discharged from her contract by

A) impossibility.
B) accord and satisfaction.
C) tender of performance.
D) substantial performance.

Question 25

Performing a contract involves either paying money or performing a(n) ____________________.

Question 26

The parties to a contract may end the contract through agreement, but this method does not include

A) novation.
B) accord and satisfaction.
C) change in the law.
D) rescission.

Question 27

A valid claim filed after the statute of limitations has expired is usually

A) denied.
B) fully enforced.
C) referred to the state supreme court.
D) partially enforced.

Question 28

When one party makes a material change in the terms of the contract without the approval of the other party, the contract is discharged by

A) substantial performance.
B) accord and satisfaction.
C) alteration.
D) waiver.

Question 29

Johnson owed Ginger $900. Johnson agreed to pay Ginger back by painting his house. Ginger accepted this change in the contractual agreement. Until Johnson actually paints Ginger's house, this new contract is a(n)

A) satisfaction.
B) rescission.
C) accord and satisfaction.
D) accord.

Question 30

If no time for performance is stated in a contract, the contract must be completed within a(n) ____________________ time.

Question 31

Which of the following statements is true about the term subjective impossibility?

A) The defense of subjective impossibility is accepted by the courts in only a few situations.
B) Hardships such as strikes, riots, and acts of God are automatically included in the term subjective impossibility.
C) Physical impossibility is the same as subjective impossibility.
D) All of these.

Question 32

The most common method of discharging contracts is by ____________________.

Question 33

Substantial performance is

A) slightly less than full performance.
B) achieved when a person in good faith has fulfilled all the major requirements of the contract.
C) often applied to construction contracts.
D) all of these.

Question 34

The statute that fixes a time limit within which a lawsuit must be filed is called the ____________________.

Question 35

Under the common law, an example of a contract that would terminate because of a person's death is

A) a contract to sell an RV (recreational vehicle).
B) a contract by a well-known actor to perform at a major theater.
C) a contract to make a donation to the American Heart Association.
D) all of these.

Question 36

Cole owed Williams $150. When Cole couldn't pay the $150, Williams accepted $75 and a shaver worth $50 as full settlement. The contract was discharged by

A) breach of contract.
B) waiver.
C) accord and satisfaction.
D) substantial performance.

Question 37

Rescission of a contract means

A) that the parties must make a new agreement discharging each other from rights and obligations under the original contract.
B) that the parties must enter into a novation.
C) that the parties must accept substantial performance.
D) all of these.

Question 38

Under the common law, the death or serious illness of one of the parties to a contract

A) has no effect on the contract.
B) discharges a personal services contract.
C) makes the contract impossible to perform.
D) none of these.

Question 39

A contract is not generally discharged by

A) refusal of a tender of performance.
B) accord and satisfaction.
C) novation.
D) a refusal of a tender of payment.

Question 40

Freeman contracted to build a wooden garage for Douglas. Before construction began, a local ordinance was enacted prohibiting wooden structures in the zone where the garage was to be located. The agreement is ineffective under the common law because of

A) rescission.
B) accord and satisfaction.
C) release.
D) impossibility.

Question 41

In a(n) ____________________, the original contract is terminated and a new contract formed between the remaining party to the original contract and the new party.

Question 42

Under the common law, a contract is discharged by ____________________ if a law is passed making the performance illegal.

Question 43

How does full performance differ from substantial performance?

Question 44

How would you protect yourself when you enter into a contract so that you would be the final judge on whether or not the conditions of the contract are met?

Question 45

Under the common law, a contract can be discharged for circumstances beyond the control of the parties if the contract contains a(n) ____________________.

Question 46

Contrast objective impossibility with commercial impracticability.

Question 47

What conditions must be met in order for a person to be accused of a material alteration?

Question 48

Under the common law, what are the three ways in which a contract can be discharged by impossibility?

Question 49

Because of the harshness of the common law rule regarding impossibility of performance, the Uniform Commercial Code (UCC) in certain cases allows a contract to be discharged under the doctrine of ____________________.

Question 50

A new agreement entered into before the original contract is breached is called a(n) ____________________.