Deck 20: Discharge and Remedies

Question 1

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

Answer 1

False

Question 2

A material breach does not discharge the nonbreaching party from his obligations under the contract.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

Loyla and Barbara enter into a contract to sell snow cones where Loyla will bring the ice and flavors and Barbara will supply cups and straws. Loyla brings the ice and flavors as promised under the contract to Barbara. Loyla's obligations under the contract are ________ and she is said to be discharged.

A) finished
B) terminated
C) completed
D) discharged
E) reduced

Question 5

Punitive damages are frequently awarded damages.

Question 6

The two types of performance include substantial performance and nominal performance.

Question 7

When there is a substitution of a party to a contract, it is called rescission.

Question 8

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

Question 9

Completion of all of the terms of a contract is required for substantial performance.

Question 10

Conditions precedent, conditions subsequent and nominal conditions are the three types of conditions allowed in a contract.

Question 11

An order requiring that the breaching party fulfill the terms of the agreement is called specific performance.

Question 12

Parties can discharge their duty by being ready, willing and able to perform. This is known as tender.

Question 13

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

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

Question 14

The court may grant a recovery based on quasi-contract in order to prevent an injustice from occurring when one party thought there was an enforceable contract, but an enforceable contract does not actually exist.

Question 15

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

Question 16

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

Question 17

Under ordinary circumstances, a party's duty to perform a promise agreed to in a contract is easy to be changed to a different promise.

Question 18

How may a party's contractual obligations be discharged?

A) Performance is the only way a party's contractual obligations may be discharged.
B) Performance or the failure of a condition to occur 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.

Question 19

Hector's house was damaged by fire. He obtained three independent appraisals to repair the damage and submitted the appraisals to his insurer, informing the insurer that he was willing to accept use of the lowest appraisal as a basis for his insurance reimbursement. The adjuster for the insurance company asked Hector to submit to an oral examination under oath concerning the fire, but Hector refused. The insurance company denied reimbursement based on Hector's refusal to provide the examination under oath. If the court follows the case in the text Hamilton v. State Farm Fire & Casualty Insurance Company, will Hector recover under the policy?

A) No, the insurer will prevail if it can establish actual prejudice based on Hector's refusal to provide an examination under oath.
B) No, the insurer will prevail based on Hector's refusal to provide an examination under oath regardless of whether or not it can establish actual prejudice.
C) Yes, Hector 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) Yes, Hector 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) Yes, Hector 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.

Question 20

Contractual conditions consist of ________.

A) conditions precedent only
B) conditions precedent and subsequent only
C) conditions precedent and concurrent only
D) conditions precedent, subsequent, and concurrent
E) conditions nominal and concurrent

Question 21

What is the key difference between an express and an implied condition?

A) There are no differences; express and implied conditions are the same.
B) Express conditions are clearly stated while implied conditions are inferred.
C) Implied conditions are clearly stated while express conditions are inferred.
D) Only implied conditions are enforceable.
E) Only express conditions are enforceable.

Question 22

Carrie and Peter enter into a contract in which Carrie agrees to wash Peter's car once a week as long as Peter tutors Carrie's son in math and Peter never comes home with a grade below B+. This is an example of which type of conditional contract?

A) Condition Precedent
B) Condition Subsequent
C) Condition Concurrent
D) Implied Condition
E) The contract is not conditional.

Question 23

Conditions that are not explicitly stated, but are inferred from the nature and language of the contract, are known as ________ conditions.

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

Question 24

When all aspects of the parties' duties under the contract are executed perfectly, which of the following occurs?

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

Question 25

Yolef and Stacia enter into a contract for Stacia to cook a meal for Yolef and Yolef to pay Stacia $50. Yolef shows up at Stacia's house with $100. Yolef's actions are an example of ________.

A) Tender.
B) Performance.
C) Complete performance.
D) Incomplete performance.
E) Implied performance.

Question 26

Paula puts a clause in her contract with Raul that says if he fails to pay rent in the future, he must move out of her apartment immediately. This is an example of a condition ________.

A) precedent
B) subsequent
C) concurrent
D) enhancer
E) expressed

Question 27

An offer of performance is known as ________ when parties offer to perform and are ready, willing, and able to perform.

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

Question 28

How do parties generally discharge their obligations in most situations where there is a contract?

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

Question 29

Yolef and Stacia enter into a contract for Stacia to cook a meal for Yolef and Yolef to pay Stacia $50. Yolef shows up at Stacia's house with $100 and hands it to Stacia. Stacia refuses to accept the money. Yolef has:

A) Discharged his duties under the contract.
B) Performed subject to satisfaction of a contracting party.
C) Substantially performed his duties.
D) Breached the contract.
E) Not yet performed his duties under the contract.

Question 30

When each party's performance is conditioned on the performance of the other, which of the following conditions occur?

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

Question 31

Laura explicitly states in her contract that she will sing every day of the week, except for holidays, for the local opera provided that she is paid weekly. This type of a condition is known as a(n) ________ condition in the contract?

A) precedent
B) conditional
C) concurrent
D) express
E) implied

Question 32

Alexandra and Tomas enter into a contract in which Tomas agrees to install a new door for Alexandra and to install a new silver doorknob. Tomas installs the door, but silver doorknobs are out of stock so he finds a chrome knob that he believes looks silver and he installs it. Which of the following describes Tomas' performance of his duties?

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

Question 33

Carrie and Peter enter into a contract in which Carrie agrees to wash Peter's car as long as Peter tutors Carrie's son in math during the entire time Carrie is washing the car. This is an example of which type of conditional contract?

A) Condition precedent
B) Condition subsequent
C) Condition concurrent
D) Implied condition
E) The contract is not conditional.

Question 34

Carrie and Peter enter into a contract in which Carrie agrees to wash Peter's car if Peter tutors her son in math and her son gets at least a B+. This is an example of which type of conditional contract?

A) Condition Precedent
B) Condition Subsequent
C) Condition Concurrent
D) Implied condition
E) The contract is not conditional.

Question 35

Nelda receives a contract for a job at a law firm on the condition that she passes the bar exam. This is known as a condition ________.

A) precedent
B) subsequent
C) concurrent
D) nominal
E) certain

Question 36

What is the difference between performance and tender?

A) There is no difference.
B) Performance involves fulfilling contractual obligations, while tender involves offering performance.
C) Tender is required when there is a conditional contract, while performance is required for all other contracts.
D) Performance is required when there is a conditional contract, while tender is required for all other contracts.
E) Tender is substantial performance, while performance refers only to complete performance.

Question 37

Juan and Carlos enter into a contract which states: "Carlos will paint Juan's bedroom in Juan's house white and Juan promises to pay Carlos $100 upon completion." Which of the following is an example of an implied condition?

A) That Carlos will paint Juan's bedroom.
B) That Carlos will use white paint when painting Juan's bedroom.
C) That Juan will pay Carlos $100.
D) That Juan will pay Carlos upon completion of the painting.
E) That Juan will allow Carlos access to his bedroom

Question 38

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 39

An offer for the sale of a vehicle contained the condition that the buyer must return the signed offer with a $1,000 deposit upon acceptance. The requirement to send $1,000 is an example of what type of condition?

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

Question 40

Waynette contracts with Tammy to tutor her for $25 an hour in legal studies. Tammy tutors Waynette and Tammy pays her $25 at the end of the hour. This is known as a ________.

A) discharge by performance
B) performance by agreement
C) performance by condition
D) discharge by agreement
E) contractual capability

Question 41

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 42

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 43

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 44

Monetary damages can also be referred to as legal ________.

A) possibilities
B) injunctions
C) remedies
D) consequences
E) equities

Question 45

________ 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) Consequential
D) Nominal
E) Punitive

Question 46

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 47

Whenever a party fails to perform his or her obligations under the contract, a ________ occurs.

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

Question 48

Gordan contracts with Liddia to build his house with solar power shingles. However, Liddia finds that the solar power shingles will not be available in time for Gordan's house. Liddia and Gordan agree to use asphalt shingles instead. This is known as a[n] ________.

A) accord and satisfaction
B) novation
C) substituted contract
D) mutual rescission
E) alteration

Question 49

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 50

If a woman is having a dress custom made for her, the ________ standard applies.

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

Question 51

In England, parties who had contracted for rooms along a parade route for a king's coronation were refunded their money when the coronation was canceled because the king became ill. Which of the following doctrines arose from this decision?

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

Question 52

Which of the following is NOT a way to discharge contractual obligations by mutual agreement?

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

Question 53

Vivian and Anna have contracted for Anna to sew Vivian a new quilt. Anna, however, decides that the pattern that Vivian would want sewn in the quilt would be better sewn by Patty. Vivian agrees to have Patty sew the quilt. This is known as a(n) ________.

A) accord and satisfaction
B) novation
C) substituted contract
D) mutual rescission
E) alteration

Question 54

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 55

Penelope agrees to sell 100 pounds of sugar to Vito in June. In May, Penelope discovers there is a major sugar shortage and she would have to pay her supplier 1000 times more than expected. She alerts Vito in May that she does not intend to sell him the sugar. This is an example of:

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

Question 56

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 57

Kelly contracts with Raphael for Raphael to bring a pony to her daughter's birthday party in exchange for $100. Kelly later learns her daughter is frightened of ponies. She contacts Raphael and Raphael agrees to bring a donkey to the party for $50 instead. Which of the following is true of the original agreement involving the pony and the $100?

A) It was discharged by accord and satisfaction
B) It was discharged by novation
C) It was discharged by substituted contract
D) It was discharged by mutual rescission
E) It was breached

Question 58

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 59

Which term describes 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 60

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 61

Valerie contracted with Timothy to sell her shares of stock to him for $500 even though she knew the company was about to go bankrupt and the stock was worth $5. If a court wanted to punish Valerie for her actions they would assess ________ damages.

A) consequential
B) punitive
C) liquidated
D) nominal
E) repugnant

Question 62

________ damages are awarded by a court when no actual damages resulted from the breach of a contract.

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

Question 63

To recover damages in a breach-of-contract case, the plaintiff must ________ their damages in an effort to minimize the results of the breach.

A) recalculate
B) reform
C) reduce
D) minimize
E) mitigate

Question 64

Caroline goes to work for a soft drink company that owns a proprietary recipe. She signs a non-disclosure agreement. When she is fired, she threatens to go public with the company's recipe. The company wants to stop her. They should seek a(n) ________.

A) Injunction
B) Directive
C) Instructional edict
D) Demand
E) Order for specific performance

Question 65

[Dream Home] Jacob 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 obtain a loan. Jacob also includes a clause in the contract with the seller stating that if he loses his job before the date the purchase contract is signed, the seller will release him from any obligation. After obtaining a loan and buying the home, Jacob decides he wants to have new windows installed. He enters into a contract with a window contractor. The window contractor visits the home, but never finds Jacob there. The contractor makes several attempts to reach Jacob, but Jacob does not return phone calls and makes no attempt to assist the contractor in arranging the window installation.
The provision that the seller will release Jacob unless he is able to obtain a loan is a(n) ________.

A) Condition subsequent
B) Condition precedent
C) Bona fide condition
D) Condition concurrent
E) Exculpatory condition

Question 66

________ 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 67

Darwin was to deliver a 1965 Camaro to Ashland that she had paid Darwin to restore for her. Once he finished the Camaro's restoration, Darwin decided to keep the car. The court would order Darwin to turn over the car to Ashland under ________.

A) specific obligation
B) specific performance
C) absolute obligation
D) identified obligation
E) absolute performance

Question 68

All of the following are types of common equitable remedies except ________.

A) rescission
B) restitution
C) anticipatory breach
D) specific performance
E) injunctions

Question 69

[Dream Home] Jacob 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 obtain a loan. Jacob also includes a clause in the contract with the seller stating that if he loses his job before the date the purchase contract is signed, the seller will release him from any obligation. After obtaining a loan and buying the home, Jacob decides he wants to have new windows installed. He enters into a contract with a window contractor. The window contractor visits the home, but never finds Jacob there. The contractor makes several attempts to reach Jacob, but Jacob does not return phone calls and makes no attempt to assist the contractor in arranging the window installation.
The responsibility of Jacob to make arrangements to give the window installer access to the home is a[n] ________.

A) Condition subsequent
B) Condition precedent
C) Implied condition
D) Express condition
E) Acknowledged condition

Question 70

Which of the following is not true of a party seeking equitable relief?

A) There is no adequate legal remedy available.
B) Irreparable harm to the plaintiff may result if the equitable remedy is not granted.
C) The contract is voidable.
D) The contract terms are clear and unambiguous.
E) The plaintiff has clean hands.

Question 71

[Bathroom Mess] For $300,000, Michael agreed to build a new home for Ashton, who is very picky. Michael built the home to Ashton's specifications with one exception: the faucets and flooring in the upstairs bathroom were not exactly what Ashton specified. That was a mistake on Michael's part, but he did not intentionally fail to follow the specifications. When Ashton saw the bathroom, she went ballistic and told Michael that she would not pay Michael anything for the house. It will take $300 to put in the correct faucets and flooring. Michael responded that he is willing to pay $300 to put Ashton in the position she would have been in had the correct faucets and flooring been used, but that is all he is willing to pay.
Which statement is true regarding the breach, if any, that occurred between Michael and Ashton?

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

Question 72

Under the UCC, how are compensatory damages calculated when a seller breaches a contract for the sale of goods?

A) By a liquidated damage clause, which the Uniform Commercial Code requires buyers and sellers to include in all contracts for the sale of goods.
B) By calculating the degree of inconvenience the buyer incurred as a result of the seller's breach of contract.
C) By the price the seller had agreed to sell the goods for, multiplied by 1.5 to account for the buyer's inconvenience.
D) By finding the difference between what the buyer would have paid for goods under the contract and the amount the buyer will have to pay to obtain the goods from another seller.
E) By calculating the value of the buyer's actual losses and adding punitive damages.

Question 73

[Dream Home] Jacob 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 obtain a loan. Jacob also includes a clause in the contract with the seller stating that if he loses his job before the date the purchase contract is signed, the seller will release him from any obligation. After obtaining a loan and buying the home, Jacob decides he wants to have new windows installed. He enters into a contract with a window contractor. The window contractor visits the home, but never finds Jacob there. The contractor makes several attempts to reach Jacob, but Jacob does not return phone calls and makes no attempt to assist the contractor in arranging the window installation.
The provision that the seller will release Jacob from any obligation if he loses his job is a(n) ________.

A) Condition subsequent
B) Condition precedent
C) Bona fide condition
D) Condition concurrent
E) Exculpatory condition

Question 74

[Bathroom Mess] For $300,000, Michael agreed to build a new home for Ashton, who is very picky. Michael built the home to Ashton's specifications with one exception: the faucets and flooring in the upstairs bathroom were not exactly what Ashton specified. That was a mistake on Michael's part, but he did not intentionally fail to follow the specifications. When Ashton saw the bathroom, she went ballistic and told Michael that she would not pay Michael anything for the house. It will take $300 to put in the correct faucets and flooring. Michael responded that he is willing to pay $300 to put Ashton in the position she would have been in had the correct faucets and flooring been used, but that is all he is willing to pay.
Regarding the appropriate amount of damages, if any, which of the following statements is true regarding the effect of Michael's failure to meet his obligations under the building contract?

A) There are no damages because Michael did not breach the contract.
B) Ashton will not have to pay for the house because Michael failed to perform as required.
C) Even though Michael substantially performed, Ashton will not have to pay for the house because Michael materially breached the contract.
D) Ashton 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 75

College president Robert contracted with Denise to teach business law. Alice did a good job teaching, but became upset with Robert and refused to turn in her grades. What type of order should Robert seek to compel Denise 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 76

________ remedies, as applied in the U.S., developed from the English court's authority to fashion remedies when existing laws did not provide any adequate ones.

A) Positive
B) Remedial
C) Consequential
D) Equitable
E) Equalized

Question 77

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 78

Gloria contracts with Melody to supply her with the latest version of a new computer game for her video store's Christmas rush. Gloria substantially advertises that she will have the game for Christmas. Melody, however, does not supply Gloria with the new game. What type of damages might Gloria sue for to recover the advertising expenses?

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

Question 79

Bobby and Fredrick specify in their contract that for every day Bobby's construction company does not complete Fredrick's new house, Bobby will deduct $1000. This is known as a ________ damages clause.

A) punitive
B) compensatory
C) nominal
D) consequential
E) liquidated

Question 80

Which is an example of a situation in which the court would likely award punitive damages after a breach of contract?

A) When fraud occurred.
B) When anticipatory breach occurred.
C) When anticipatory repudiation occurred.
D) When substantial performance occurred.
E) When only nominal damages occurred.