Deck 10: Performance and Breach of Contracts

Question 1

________ is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

A)Scienter
B)Duress
C)Battery
D)Assault

Answer 1

B

Question 2

Duress occurs when one person takes advantage of another person's mental,emotional,or physical weakness and unduly persuades that person to enter into a contract.

Answer 2

False

Question 3

A contract involving mutual mistake of value is ________.

A)rescindable
B)ambiguous
C)enforceable
D)void

Answer 3

C

Question 4

A unilateral mistake occurs if both parties know the object of the contract but are mistaken as to its value.

Question 5

A contract cannot be rescinded if there has been a mutual mistake.

Question 6

The term scienter refers to the knowledge that a representation is false or that it was made without sufficient knowledge of the truth.

Question 7

Intentional misrepresentation is considered fraud.

Question 8

A misrepresentation is considered fraud even if it is made without the intent to deceive another party.

Question 9

Which of the following scenarios makes Tim liable for undue influence?

A)He uses a false identity,borrows $10,000 from Kelly,and disappears with the money.
B)He threatens to kill Carlos if Carlos does not sign a contract that transfers all his property to Tim.
C)He takes advantage of his grandmother's illness and persuades her to sign a will,leaving all of her property to him.
D)He threatens to bring a lawsuit against Carlos if Carlos does not make him a partner in his firm.

Question 10

A unilateral mistake is a mistake in which only one party is mistaken about a material fact regarding the subject matter of a contract.

Question 11

In order to prove fraud,which of these elements must be shown?

A)The innocent party knew the wrongdoer.
B)The innocent party detected the misrepresentation prior to the contract's formation.
C)The wrongdoer assumed a false identity.
D)The innocent party justifiably relied on the wrongdoer's misrepresentation.

Question 12

A(n)________ is an event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation.

A)fraudulent misrepresentation
B)unilateral mistake
C)bilateral mistake
D)erroneous misrepresentation

Question 13

A material fact is a fact that is irrelevant to the subject matter of a contract but pertains to the conduct of the parties.

Question 14

Heather chooses to buy a scarf from Macy's and reads the price on the tag as $50.She uses her credit card to pay for the scarf,but only after the purchase does she notice that the price tag actually says $500.This is an instance of a(n)________.

A)bilateral mistake
B)mutual mistake of value
C)innocent misrepresentation
D)unilateral mistake

Question 15

Duress is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

Question 16

Duress only occurs when a threat involves physical harm.

Question 17

The measure of damages awarded to an innocent party for fraud is the difference between the value of the property as represented and the actual value of the property.

Question 18

An ambiguity in a contract may constitute a mutual mistake of a material fact.

Question 19

Which of the following is true of a unilateral mistake?

A)Only one mistake or ambiguity is present in the subject matter of entire contract.
B)Out of several contracts drafted simultaneously between two parties,one has a mistake in its subject matter that does not concern the other contracts.
C)Only one party is mistaken about a material fact regarding the subject matter of a contract.
D)A single mistake about a material fact in the subject matter of a contract appears several times in the contract.

Question 20

To be actionable as fraud,the misrepresentation must be the sole factor in inducing the innocent party to enter into the contract.

Question 21

Which of the following contracts is required to be in writing in most states?

A)contracts for the sale of goods priced at $100
B)contracts for the lease of goods with payments of $500
C)promises to transfer an ownership interest in real property
D)handshake deals

Question 22

Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000.Chelsea pays him $100,000 and moves in.A month later,Jonas learns that his state requires contracts for the lease of goods with payments of $1,000 or more to be in writing.Which of the following options does either party have?

A)Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds and is hence void.
B)The contract cannot be rescinded by either party as it has already been executed.
C)Chelsea can rescind the contract on the grounds of noncompliance with the Statute of Frauds.
D)Jonas can rescind the contract on the grounds of noncompliance with the Statute of Frauds.

Question 23

Which of the following is considered real property?

A)a fixture permanently affixed to a building
B)fifty-one percent partnership in a firm
C)a car
D)diamond jewelry

Question 24

Kimlon Informatics is owed $5,000 from a client for its services.The recovery period is 100 days,but Kimlon needs the money immediately.It sells the right of collecting money from its client to Quikcollect,a collection agency.Here,Kimlon Informatics is the ________.

A)obligor
B)obligee
C)subassignee
D)assignee

Question 25

________ refers to a condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.

A)Condition precedent
B)Condition subsequent
C)Concurrent condition
D)Implied condition

Question 26

________ refers to a situation in which a party threatens to do a wrongful act unless another party enters into a contract.

Question 27

A(n)________ exists if both parties know the object of the contract but are mistaken as to its value.

Question 28

Which of the following does Section 2A-201(1)of the Uniform Commercial Code state?

A)All lease contracts must be in writing.
B)Lease contracts requiring payments of $1,000 or more must be in writing.
C)All sales contracts must be in writing.
D)Sales contracts requiring payments of $500 or more must be in writing.

Question 29

Intentional misrepresentation is commonly referred to as ________.

Question 30

________ refers to the knowledge that a representation is false.

Question 31

KnockKnock,Inc.is a manufacturer of stainless steel locks which are well known for their durability.The company contacts a new supplier and forms a supply contract.The contract states that KnockKnock,Inc.will only purchase steel from the supplier if the material supplied is high grade Type 102 stainless steel.This is an instance of a ________.

A)condition subsequent
B)concurrent condition
C)covenant
D)condition precedent

Question 32

Which of the following is true of covenants and conditions?

A)A covenant is a conditional promise to perform.
B)A conditional promise becomes a covenant if the condition is met.
C)A contract cannot contain conditions that excuse performance.
D)A party cannot sue the other party for breach of a covenant.

Question 33

Which of the following phrases explains the term covenant?

A)an unconditional promise to perform
B)a breach of contract
C)mutual rescission of a contract
D)successive assignments of a right

Question 34

A party who owes a duty of performance under a contract is called the ________.

A)obligor
B)assignor
C)assignee
D)obligee

Question 35

A(n)________ is a third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the promisor.

A)third-party contractor
B)assignor
C)sub-assignor
D)intended third-party beneficiary

Question 36

What is intentional misrepresentation and what are the elements required to prove fraud?

Question 37

The doctrine of ________ allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

A)part performance
B)undue performance
C)equitable performance
D)promissory estoppel

Question 38

In a(n)________ mistake,only one party is mistaken about a material fact regarding the subject matter of the contract.

Question 39

The ________ states that if a written contract is a complete and final statement of the parties' agreement,any prior or contemporaneous oral or written statements that alter,contradict,or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract.

A)main purpose exception
B)leading object exception
C)parol evidence rule
D)equal dignity rule

Question 40

________ refers to a condition whose occurrence or nonoccurrence of a specific event automatically excuses the performance of an existing contractual duty to perform.

A)Condition precedent
B)Condition subsequent
C)Concurrent condition
D)Implied condition

Question 41

A(n)________ breach of a contract occurs when a party renders inferior performance of his or her contractual obligations.

A)material
B)minor
C)anticipatory
D)defensive

Question 42

A force majeure clause usually excuses nonperformance caused by natural disasters such as floods,tornadoes,and earthquakes.

Question 43

A clause in a contract in which the parties specify certain events that will excuse nonperformance is known as a(n)________.

A)approval clause
B)express condition
C)force majeure clause
D)implied-in-fact condition

Question 44

Poole Contractors makes a contract with Delta Resources to pay $50,000 for the supply of 500 truckloads of sand within a week.Delta Resources delivers the sand in two days after the contract was made.Poole Contractors pays the $50,000 promised in the contract.This is an instance of ________.

A)substantial performance
B)a material breach
C)a minor breach
D)strict performance

Question 45

The parol evidence rule stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement.

Question 46

In terms of compliance with the Statute of Frauds and the Uniform Commercial Code,the signature of the person who is enforcing the contract is required.

Question 47

The doctrine of part performance allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if performance is necessary to avoid injustice.

Question 48

Which of the following statements is true of a breach of contract?

A)Strict performance by a party discharges that party's obligations under the contract.
B)Inferior performance constitutes a minor breach of contract.
C)Substantial performance constitutes a material breach.
D)The most common remedy for a breach of contract is an award of equitable remedies.

Question 49

A covenant is an unconditional promise to perform.

Question 50

Complete performance occurs when a party to a contract renders performance exactly as required by the contract.

Question 51

James hires Franco for a painting job.Their contract explicitly states that Franco's employment can be terminated if he is employed by another party during the contract period.Two weeks into the job,James finds out that Franco is also working for a painting agency two blocks away and terminates his employment.This is an instance of a(n)________.

A)condition precedent
B)condition subsequent
C)concurrent condition
D)implied condition

Question 52

Trees,crops,minerals,and timber are not considered real property and are thus barred from being included in contracts involving interests in real property.

Question 53

An agreement whereby the parties agree to accept something different in satisfaction of the original contract is called a restitution.

Question 54

Lionel Richmond is a soccer player who has a six-year contract with the Christshire United soccer team.Two years into the contract,he is involved in an accident which results in the complete amputation of his right leg.On what basis is Richmond discharged from further performance of the contract?

A)novation
B)substituted contract
C)accord and satisfaction
D)discharge by impossibility of performance

Question 55

If the modification of a lease contract increases the lease payment to $1,000 or more,the modification has to be in writing to be enforceable.

Question 56

Which of the following refers to an agreement that substitutes a new party for one of the original contracting parties and relieves the existing party of liability on the contract?

A)novation
B)substituted contract
C)mutual rescission
D)accord

Question 57

According to the equal dignity rule,agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

Question 58

Which of the following terms refers to an unconditional and absolute offer by a contracting party to perform his or her obligations under a contract?

A)injunction
B)writ of garnishment
C)tender of performance
D)writ of attachment

Question 59

Which of the following is true of discharge by agreement?

A)A partially executed contract cannot be rescinded.
B)Mutual rescission requires parties to enter into a second agreement that expressly terminates the first one.
C)A party is allowed to rescind a contract without the consent of the other party.
D)Unilateral rescission is not regarded as a breach of contract.

Question 60

The one-year rule states that an executory contract that cannot be performed by its own terms within one year of its formation must be in writing.

Question 61

Distinguish between minor breach and material breach.

Question 62

Which of the following is true of monetary damages?

A)Monetary damages are available only for material breaches of contract.
B)Dollar damages are not monetary damages.
C)Compensatory damages are not monetary damages.
D)Consequential damages are monetary damages.

Question 63

A(n)________ is an unconditional promise to perform.

Question 64

Distinguish between conditions and covenants.

Question 65

________ is an action to undo a contract.

Question 66

The ________ is an equitable doctrine that allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

Question 67

An obligee who transfers a right is known as a(n)________.

Question 68

A(n)________ is a clause in a contract which stipulates that the contract is a complete integration and the exclusive expression of the parties' agreement.

Question 69

As a part of a downsizing initiative,Richmond and Sons fired an employee before his employment contract lapsed.Is the employee responsible for mitigating damages? Explain.

Question 70

A(n)________ refers to a promise in which one person agrees to answer for the debts or duties of another person.

Question 71

The ________ states that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable.

Question 72

An award of ________ orders the breaching party to perform the acts promised in a contract.

A)reformation
B)injunction
C)restitution
D)specific performance

Question 73

Substantial performance of a contract constitutes a material breach.

Question 74

Mary buys a new toaster for $500.The toaster's label bears a disclaimer stating that the manufacturer is not liable for consequential damages.One morning while Mary is using the toaster,it emits sparks and damages the electrical wiring in the kitchen.The electrician tells Mary that the toaster malfunctioned and that the cost of repairs in her kitchen would amount to $2,000.What amount of monetary damages can Mary likely recover from the manufacturer of the toaster?

A)$500
B)$2,500
C)$2,000
D)No monetary damages can be recovered.

Question 75

The term ________ refers to any oral or written words outside the four corners of a written contract.

Question 76

Explain the creation and working of guaranty contracts.

Question 77

A(n)________ is a party who is unintentionally benefited by other people's contracts.

Question 78

________ refers to an equitable doctrine that permits the court to rewrite a contract to express the parties' true intentions.

A)Reformation
B)Injunction
C)Conjunction
D)Garnishment

Question 79

________ of the Uniform Commercial Code (UCC)is the basic Statute of Frauds provision for sales contracts.

Question 80

Kinetosphere Automation Inc. (K.A. )makes a mandatory employment contract with all its employees.The contract states that K.A.'s employees are not permitted to work for any other organization while they are employed by K.A.If K.A.finds an employee serving another company,it can approach the court to obtain a(n)________ to prevent the employee from working in the other company.

A)restitution
B)rescission
C)injunction
D)subjugation