Deck 9: Contractual Performance and Breach

Question 1

Material breach represents a less-than-complete performance.

Answer 1

False
Explanation: Material breach is a level of performance below what is reasonably acceptable.

Question 2

A contracting party has no duty to perform prior to a condition precedent being satisfied.

Answer 2

True
Explanation: A contracting party has no duty to perform prior to a condition precedent being satisfied.

Question 3

Once the seller transfers the goods to the shipper, the burden of damages in transit also rests with him/her.

Answer 3

False
Explanation: The UCC states the seller satisfies its obligation to ship goods once they are transferred to the shipper for transportation. If the goods are damaged in transit, the liability rests on the buyer, not the seller.

Question 4

Rescission is a court-awarded damage arising from unusual losses which the parties knew would result from breach of the contract.

Question 5

The parol evidence rule states that parties to a complete and final written contract can introduce oral evidence in court that changes the intended meaning of the written terms.

Question 6

An employment contract is an example of divisibility of performance.

Question 7

A party to a contract is discharged when that party is relieved from all further responsibility of performance.

Question 8

Complete performance discharges a party to a contract.

Question 9

When parties fail to provide details, the law states the buyer's payment is a condition that must be satisfied after the seller has performed his/her duty to deliver.

Question 10

Increased difficulty of performance or reduced profitability will constitute valid grounds for claiming impossibility of performance.

Question 11

Under the UCC a party to a sale-of-goods contract receives discharge from performance because of commercial impracticability.

Question 12

Homer hired Bob Builders Pvt. Ltd to construct his house. They signed a contract, which stated that Bob Builders wouldill complete the work by April 4th 2012, and Homer wouldill pay them in full. Homer has the right to deny them payments if they miss the date.

Question 13

Oral evidence that changes the meaning of written terms can be given if necessary to prevent fraud.

Question 14

If a contract is silent as to delivery, there is a presumption that the buyer is responsible for picking up the goods at the seller's location.

Question 15

When only one of the parties drafts (writes) a contract, courts will interpret ambiguous or vague terms against the party that drafts them.

Question 16

If something must take place in future, before a party has a duty to perform, it is a condition subsequent.

Question 17

Releases usually occur after a contracting party fails to perform.

Question 18

Sheena is a week late in paying her rent. She requests her landlord to not charge her the late payment fees, and the landlord agrees. This is an example of a waiver.

Question 19

One party's tender of performance may satisfy a required condition leading to the other party's duty to perform.

Question 20

Paying for the items purchased at a store, as the store delivers the items is an example of implied concurrent conditions of performance.

Question 21

Shareholders of corporations and members of LLCs are protected from tort liability that exceeds the amount of their investment.

Question 22

Which of the following is an exception to the parol evidence rule?

A) Evidence of oral agreement that merely explains the meaning of written terms without changing them.
B) Evidence of oral agreements made at the time of the written contract.
C) Evidence of oral agreements made before signing a written contract.
D) Evidence of oral modifications arising after the parties have made the written contract.
E) Evidence of oral agreements that changes the meaning of written terms.

Question 23

If a contract contains a condition subsequent it means that:

A) performance must be completely done according to contract specifications or the contract is breached.
B) performance will be excused upon the happening of some specified future event.
C) impossibility of performance will not be an acceptable excuse for nonperformance.
D) performance will not be excused due to an unexpected event in the future.
E) performance will be due upon the happening of some specified future event.

Question 24

A principal interacts with someone (or some organization) for the purpose of obtaining an agent's assistance.

Question 25

A partner in a trading partnership, such as an accounting or other service firm, has no implied power to borrow money. In the latter case, such authority must be actual before the firm will be bound.

Question 26

Any time an employee is liable for tortious acts in the scope of employment, the employer is also liable.

Question 27

If a word of a term in a written contract has _____, particular to the industry to which the parties belong, the court will give the term or word that meaning.

A) ambiguous terms
B) a handwritten term
C) business banter
D) a trade usage
E) common words

Question 28

In a _____, the seller must put the goods in the possession of a carrier and contract with that carrier for their transportation.

A) destination contract
B) tender of performance
C) seller's contract
D) shipment contract
E) tender of deliver

Question 29

Most of our every day purchases involve:

A) implied concurrent conditions.
B) express conditions precedent.
C) express conditions subsequent.
D) implied conditions precedent.
E) implied conditions subsequent

Question 30

Jimmy, a cashier at Maker Stores, gets into a heated argument with a customer over which party will win the upcoming elections, which results in a fight. Maker Stores is liable for Jimmy's tortious actions.

Question 31

An employer who must pay for an employee's tort under respondeat superior may legally sue the employee for reimbursement.

Question 32

Liquidated damages can simplify disputes when a breach occurs.

Question 33

Which of the following is true in cases where only one party drafts the contracts, which contain terms that appear vague and ambiguous to the other party?

A) The court will give the terms the meaning as per trade usage.
B) The court will reject the non-drafting party's attempt to reinterpret the terms after the contract has been signed.
C) The court will declare the drafting party's behavior as a tort due to intentional ambiguity of terms.
D) The court will interpret the terms as they mean in the common language.
E) The court will interpret the ambiguous and vague terms against the party that drafts them.

Question 34

In a situation where a buyer and seller have not mentioned details about delivery, which of the following can be applied?

A) The seller will have to personally deliver the goods to the buyer.
B) The seller will have to ship the goods, assuming the risks of damages that take place in transit.
C) The buyer and the seller will have to enter into another contract stating the details of the delivery of the goods.
D) The buyer will have to make arrangements to pick up the goods at the location the seller designates.
E) The contract will be held as a void contract by the court, since it contains indefinite, unclear terms.

Question 35

An employee who is on a frolic or detour is no longer acting for the employer.

Question 36

Which of the following states that parties to a written contract may not introduce oral evidence to change written terms?

A) The statute of frauds
B) Concurrent conditions
C) The parol evidence rule
D) Conditions subsequent
E) Conditions precedent

Question 37

If a contract contains a condition precedent it means that:

A) performance will be due upon the happening of some specified future event.
B) performance will be excused upon the happening of some specified future event.
C) performance must be completely done according to contract specifications or the contract is breached.
D) impossibility of performance will not be an acceptable excuse for nonperformance.
E) performance will be due upon the simultaneous duty to perform of the parties.

Question 38

Apparent authority can be inferred from the acts of an agent who holds a position of authority or who had actual authority in previous situations.

Question 39

If it is established in court that an employer warned the employee against the tortious behavior, the employer will not be held liable for the employee's actions.

Question 40

_____ is a legal term referring to the transfer of possession from the seller to the buyer.

A) Performance
B) Condition
C) Delivery
D) Waiver
E) Release

Question 41

Finishing the construction of a home two days after the contract called for completion (no injury occurs) most likely will be considered:

A) significant performance.
B) implied performance.
C) breach of contract.
D) substantial performance.
E) material breach.

Question 42

An offer to perform one's required duties under a contract is called a:

A) conditional performance.
B) qualified performance.
C) substantial performance.
D) tender of performance.
E) complete performance.

Question 43

Which of the following is true of a waiver?

A) It occurs when a party announces the other party does not have to perform as promised.
B) It occurs before a contracting party fails to perform.
C) It can take the form of a negotiated contract.
D) It is bargained for and is supported by consideration.
E) It occurs after a contracting party fails to perform.

Question 44

Jenna has contracted with Ebenezer to buy his land for $50,000. Jenna has paid the amount in full. However, Ebenezer has not transferred the land to Jenna. Which of the following remedies is the court most likely to enforce in case Jenna files a suit?

A) Arbitration
B) Consequential damages
C) Rescission
D) Liquidated damages
E) Specific performance

Question 45

_____ is a level of performance below what is reasonably acceptable.

A) Breach of contract
B) Material breach
C) Complete performance
D) Substantial performance
E) Quantitative performance

Question 46

Daniel's failure to deliver ice-cream makers and waffle makers on time, resulted in a two-week delay in the opening of Sheena's new ice-cream parlor. Sheena incurred a heavy loss since she had to pay the rent for those two weeks, as well as salaries to the personnel hired. Which of the following damages can Sheena claim from Daniel for breach of contract?

A) Liquidated damages
B) Consequential damages
C) Compensatory damages
D) Nominal damages
E) Negotiated damages

Question 47

If performance of a party to a contract only slightly deviates from contract requirements, this will be considered:

A) complete performance.
B) substantial performance.
C) breach of contract.
D) waiver of performance.
E) divisibility of performance

Question 48

The purposeful reduction of damages, usually the responsibility of the nonbreaching party, is known as _____.

A) mitigation
B) negotiation
C) waiver
D) release
E) novation

Question 49

A _____ exists when a party announces that the other party does not have to perform as promised.

A) release
B) waiver
C) surrender
D) breach
E) condition

Question 50

Great year Tires orders 50 tons of rubber from a Bill, a rubber broker. The broker has a number of rubber plantations that it can deal with but does almost all of its business with Ritchie's Rubber Farm. The delivery of the rubber is due on September 1st. On August 1st, a fire destroys Ritchie's Rubber Farm.

A) Bill's performance is excused due to impossibility of performance.
B) Bill's performance is excused due to commercial impracticality.
C) Bill's performance will not be excused if obtaining rubber from another plantation is reasonable and possible.
D) Bill's performance will not be excused if he can get the rubber from another source even if a higher cost cuts his profit margin.
E) Bill's performance will be excused even if Great year proves that rubber from other plantations is reasonably available.

Question 51

Ian owes $5000 to Shirley, which is payable in five instalments at an interest. However, after two instalments, Ian offers to pay Shirley the entire debt to avoid paying the interest. Which of the following will take place if Shirley announces that Ian does not have to pay the debt in further instalments?

A) Waiver
B) Negotiation
C) Release
D) Arbitration
E) Rescission

Question 52

Which of the following remedies is used in fraud or misrepresentation cases?

A) Arbitration
B) Rescission
C) Consequential damages
D) Liquidated damages
E) Specific performance

Question 53

Alan's Saddles makes high level seats for racing bicycles and sells to many of the top bicycle manufacturers. There are eight available sources of the type of rubber that Alan's uses; however, Alan's has always dealt with a company in the Republic of Anaerobia exclusively due to their reasonable cost. Porter's company has a contract with Alan's for 10,000 seats. Porter has just received a letter from Alan's explaining that due to turmoil in Anaerobia, their supplier cannot export their product so Alan's cannot complete the contract. Which of the following is true of this situation?

A) Alan's can get out of the contract based on impossibility of performance.
B) Alan's can get out of the contract based on commercial impracticality since they can't be forced to buy from suppliers they have not dealt with before.
C) Porter can sue for breach since the raw materials are reasonably available from another source, and Alan's cannot be discharged due to impracticality.
D) Porter can sue for specific performance if the seats are typical of all bicycle seats and not special or unique in any way.
E) Porter can rightfully file a lawsuit, and Alan's will be liable to pay Porter damages for nonperformance.

Question 54

Which of the following is true of liquidated damages?

A) A small amount is awarded by the court to the plaintiff for a breach of contract which causes no financial injury to the plaintiff.
B) Damages awarded by the court arising from unusual losses, which the parties knew would result from breach of contract.
C) Damages awarded by the court to put the plaintiff in the same position as if the contract had been performed.
D) Damages specified in the contract, where real damages for breach of contract are likely to be uncertain.
E) Courts will enforce these "liquidated" damages to penalize the defendant.

Question 55

When a party intentionally relinquishes a right to enforce a contract, it is called a/an _____.

A) agreement
B) waiver
C) breach
D) disclaimer
E) release

Question 56

_____ are court-awarded damages to put the plaintiff in the same position as if the contract had been performed.

A) Nominal damages
B) Consequential damages
C) Liquidated damages
D) Compensatory damages
E) Specific damages

Question 57

Jessica hires Bob Builders to construct a house for her. The contract specifies that grade A+ carpeting is to be installed on the entire second floor. Bob accidentally installs grade A shag carpeting instead. Few people except for carpeting experts can tell the difference. Jessica, however, refuses to pay for the construction citing that Bob has breached the contract. Which of the following is true of this situation?

A) This would likely be considered complete performance and Jessica will have to pay the contractor.
B) Jessica can claim a breach of contract and refuse to pay for the construction of the house.
C) This will be considered a substantial performance and Jessica would be entitled to monetary damages.
D) Jessica has materially breached the contract by refusing to pay Bob's, and hence cannot sue Bob's for the carpeting.
E) The court is likely to declare that Bob's has breached the contract, and will ask Jessica to pay half the cost decided as per contract.

Question 58

_____ damages are awarded by the court to the plaintiff for a breach of contract which causes no financial injury to the plaintiff.

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

Question 59

Kent and Turner get into an argument over the money Turner had loaned Kent. They decide to allow Erika, their friend and a professor, to make a decision. Turner and Kent agree to abide by whatever decision Erika makes. This is an example of _____.

A) a negotiated settlement
B) compensatory damage
C) arbitration
D) specific performance
E) a rescission

Question 60

Which of the following is true of the assumption of risks during delivery of goods?

A) The seller is always responsible for shipping the goods to the buyer.
B) The seller is liable for any damages incurred to the goods during shipment.
C) The buyer is liable for damages incurred to the goods during shipment.
D) The buyer is responsible for damages to goods when the seller is about to transfer for shipment.
E) The buyer assumes the risk of loss till he/she receives the goods, as per destination contracts.

Question 61

If a contract contains ambiguous terms, how will the court interpret and resolve the ambiguities?

Question 62

A partner in a _____ partnership is one engaged in the business of buying and selling commodities, has the implied authority to borrow money in the usual course of business and to pledge the credit of the firm.

A) trading
B) superior
C) traditional
D) business
E) nontrading

Question 63

Omi works as a cashier for Trinity Grocery Store. Omi believes that a customer is attempting to use counterfeit money to make a purchase and gets into a fist fight with the customer who truthfully denies using counterfeit money. Is Trinity liable for injuries the customer received in the fist fight?

A) Yes, if Omi reasonably intended to further Trinity's business interests.
B) Yes, since Trinity gave Omi apparent authority.
C) No, since this was a personal incident not related to work.
D) Yes, since Trinity supplied the instrumentality for the action.
E) No, since a fist fight is outside the scope of employment.

Question 64

Radford Co. hired Leeds Associates, a law firm, to manage their legal matters. In this contract, Leeds Associated is a/an _____.

A) principal
B) agent
C) third party
D) independent contractor
E) cyber agent

Question 65

_____ can be inferred from the acts of an agent who holds a position of authority or who had actual authority in the previous situation.

A) Principal authority
B) Legal authority
C) Situational authority
D) Implied authority
E) Apparent authority

Question 66

Which of the following is an example of a tortious act in the scope of employment?

A) At a law firm, a lawyer and his client get into a heated argument over the passing of a women's bill.
B) A professor hits a student each time the student fails to finish his schoolwork.
C) A store manager and a customer have a fist fight over which football team will win the World Cup.
D) An executive gets involved in an argument with another business associate over vegetarianism.
E) A seller and a buyer argue over the price of a washing machine, trying to arrive at a discounted amount.

Question 67

Principals hire _____ to do tasks and represent them in transactions.

A) contractors
B) agents
C) third parties
D) organizations
E) suppliers

Question 68

When may oral evidence be introduced after a written contract has been agreed to?

Question 69

Leslie is on his way to meet his girlfriend, when he meets with a car accident. Leslie's over speeding causes the accident and injures two other people involved in it. Which of the following is true of this situation as per the doctrine of respondeat superior?

A) Leslie was acting within the scope of employment; hence his employer is liable for Leslie's tort.
B) Since this was an accident, no one will be held liable.
C) Leslie was on a frolic and detour when the accident occurred; hence the employer is not liable for the accident.
D) Since the accident was an intentional tort by Leslie, the employer will not be held liable.
E) Leslie's employer will be held liable for all of Leslie's actions, but can sue Leslie for a reimbursement.

Question 70

Which of the following is true of the doctrine of respondeat superior?

A) An employee may be held liable under tort law for the torts committed by his/her employer, while the employee was working at the organization.
B) An employer will be held liable for the actions of an employee who is on a frolic and detour.
C) An employee working with an organization and having committed a tort can be held liable for even though he/she did not intend the harm.
D) Torts committed by an employee working for an organization will result in the employee and the employer being held liable under tort law.
E) An organization is not held liable under tort law for the torts committed by its employees during their work tenure at the organization.

Question 71

Discuss the parol evidence rule?

Question 72

Which of the following is true according to the Uniform Electronic Transactions Act?

A) A principal can be bound by a contract created by a cyber agent, only if the principal is aware of the contract.
B) A principal can be bound by a contract created by a cyber agent, even if the principal is unaware of the contract.
C) A principal can be bound by a contract created by a cyber agent, only if the principal is aware of the contract and manifests assent to the contract.
D) A principal can be bound by a contract created by a cyber agent, even if the principal is unaware of the creation of a cyber agent.
E) A principal can be bound by a contract created by a cyber agent, only if the action of one electronic agent is involved.

Question 73

Acme Corporation is being sued by Howard Bank for $50,000 borrowed by Samantha, the Chief Financial Officer of Acme. Acme had granted a written authority to Samantha to borrow only $50,000. However, a week later, Samantha resigns from the company, and in the name of Acme, borrows an additional $50,000 for personal reasons. If Acme denies the liability of this debt and files a lawsuit against Samantha, which of the following is most likely to be the court's decision?

A) Acme will be excused from the liability based upon the fact that it had authorized Samantha only for $50,000.
B) Acme will be excused from the liability based upon the fact that Samantha was not an agent for Acme.
C) Samantha was not granted authority by Acme to enter into this specific transaction, hence Samantha will be held liable for a tort.
D) Samantha will be liable to pay the debt, since she did not take the loan for the benefit of the company.
E) Acme will have to pay the debt as it allowed Samantha to have apparent authority to borrow the additional amount.

Question 74

Any time an employee is liable for tortious acts in the scope of employment, the employer is also liable. This is because of the tort doctrine of _____.

A) negotiation
B) juriscience
C) respondeat superior
D) frolic and detour
E) liability

Question 75

Explain how condition precedent and condition subsequent affect a contract?

Question 76

_____ occurs when a principal voluntarily decides to honor an agreement, which otherwise would not be binding due to an agent's lack of authority.

A) Novation
B) Ratification
C) Negotiation
D) Release
E) Waiver

Question 77

Herman writes a note to Gerard, the manager of the neighborhood grocery store, asking him to allow Bernard, Herman's restaurant manager, to charge $500 worth of groceries to the restaurant's account at the grocery store. This is an example of which of the following?

A) Nontrading partnership
B) Apparent authority
C) Implied authority
D) Expressed authority
E) Actual authority

Question 78

An agent who causes harm to a third party may create legal liability owed by the principal to the third party. This liability is known as:

A) product liability
B) contractual liability
C) principal liability
D) professional liability
E) vicarious liability

Question 79

Which of the following is true in case an employee carries a respondeat superior insurance?

A) The employer can sue the employee for reimbursements.
B) The employee will be held liable for the employer's torts, while working with the employer.
C) The insurer who has paid the respondeat superior claim will sue the employee who caused the claim.
D) The employee is entitled to receive respondeat superior claims from the employer.
E) An employer will be held liable for an employee's tortious acts whether or not they are in the scope of employment.

Question 80

Sosa signs a health club membership contract based on the salesperson's statements that the contract is cancellable at any time. Later, when Sosa applies for a cancellation of the membership, she is informed that the contract is non-cancellable. Discuss if Sosa can give oral evidence in the court for a written contract in this case.