Question 1

Dodger bought an insurance contract from Liberty Farm Co.The policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred.Time is stated to be of the essence.Dodger sustained a covered farm loss,but did not report it to Liberty Farm until 50 days later.Liberty Farm denied coverage for the claim.If Dodger sues,who wins?
A)Dodger wins; the contract was substantially performed.
B)Liberty Farm wins; there was failure of a condition subsequent.
C)Dodger wins; courts will not enforce a time-of-the-essence clause.
D)Liberty Farm wins; the impossibility doctrine applies.

Accepted Answer

The policy contained a time-of-the-essence clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred. Dodger did not report the loss until 50 days later, which is after the time limit specified in the contract. This clause is a condition subsequent, meaning that it relieves Liberty Farm of any obligation to perform under the contract if Dodger fails to satisfy the condition. Therefore, Liberty Farm wins and is not required to provide coverage for the claim.

Question 2

Oxtron,Inc.substantially performed its obligations under a service contract.Oxtron is entitled to receive
A)the full contract price.
B)substantially nothing.
C)the fair market value of its performance.
D)the full contract price minus the value of the defects.

Accepted Answer

When a party has substantially performed under a contract, they are entitled to the contract price minus any damages for the defects or incomplete performance.

Question 3

Identify four factors courts consider in deciding the validity of commercial impracticability and frustration of purpose claims.

Accepted Answer

The answer of Identify four factors courts consider in deciding...

Question 4

A contract between a company in the U.S.and one in China,contained a clause that stated: "If an event happens which is extraordinary and out of the control of the parties such as a strike,act of God,fire,accident,or transportation difficulties,then the affected party shall be relieved of its obligations under the contract." This type of clause is
A)an objective impossibility clause.
B)a force majeure clause.
C)a concurrent condition clause.
D)a condition precedent clause.

Accepted Answer

This clause is a force majeure clause, which typically excuses performance of a contract in the event of unforeseeable circumstances that are beyond the control of the parties. Such circumstances are often referred to as acts of God or force majeure events. The clause provides a way for the parties to allocate the risk of such events, and to avoid liability for a failure to perform due to circumstances beyond their control.

Question 5

Which of the following statements is accurate concerning express conditions?
A)A court will enforce any express conditions intended by the parties.
B)A court may refuse to enforce an express condition intended by the parties if the court determines it is unfair and harmful to the general public.
C)A court requires strict performance if a clause of the contract expressly demands it.
D)A court applies an objective standard whenever ruling on a personal satisfaction contract.

Accepted Answer

The answer of Which of the following statements is accurate...

Question 6

Sea Rovers,Inc.contracted to sell 1,000 pounds of shrimp to the Seafood Shack with delivery on June 1.On May 1,Sea Rovers advised the Seafood Shack that it would not be able to deliver the shrimp.The Seafood Shack
A)can sue Sea Rovers immediately for breach of contract.
B)must wait until June 1 to see if Sea Rovers will perform before suing for breach of contract.
C)cannot sue Sea Rovers because Sea Rovers gave adequate notice.
D)must wait until actual damages are determined before it can sue.

Accepted Answer

When Sea Rovers informed the Seafood Shack that it would not be able to deliver the shrimp as contracted, it committed what is known as an anticipatory breach of contract. This allows the non-breaching party, in this case, the Seafood Shack, to sue for breach of contract immediately, without having to wait until the contract's performance date.

Question 7

Which of the following events would have the best chance of excusing performance of a contract based on commercial impracticability?
A)The price of a raw material increases slightly so that the contract will not be as profitable.
B)An unforeseeable trade embargo causes prices to triple.
C)The promisor of personal services dies.
D)The subject matter of the contract is destroyed.

Accepted Answer

An unforeseeable trade embargo causing prices to triple would make performance of the contract commercially impracticable, as it would significantly increase the cost of fulfilling the contract. The other events listed may affect the profitability or ability to perform the contract, but they would not necessarily excuse performance under the doctrine of commercial impracticability.

Question 8

Linda agrees to buy Missy's Greyhound race dog for $2,000.Linda is to deliver the money and take possession of the dog the next morning.That night,running his best race ever,the dog runs away from Missy,never to be seen again.What will be the outcome in this case?
A)Linda must give $2000 for the dog, but only if the dog was insured.
B)Linda must give $2000 for the dog, but only if Missy can find a replacement dog within a reasonable time.
C)Missy must find another dog for Linda or pay her $2000.
D)Linda does not have to pay for the dog; the contract duties are discharged.

Accepted Answer

The contract became impossible to perform due to the dog running away, which is considered an unforeseen circumstance. Therefore, Linda is no longer obligated to pay for the dog and the contract duties are discharged.

Question 9

The distinction between a condition precedent and a condition subsequent
A)is important because it determines whether the burden of proof is beyond a reasonable doubt or preponderance of the evidence.
B)seldom arises in insurance cases.
C)determines who has the burden of proof.
D)is important because it determines whether the condition must be express or whether it can be implied.

Accepted Answer

The distinction between a condition precedent and a condition subsequent determines who has the burden of proof. A condition precedent must be satisfied before a party is required to perform under the contract, and the burden of proving that the condition has been satisfied falls on the party seeking performance. On the other hand, a condition subsequent relieves a party of their obligation to perform if a certain event occurs, and the burden of proving that the condition has occurred falls on the party seeking to be relieved of their obligation.

Question 10

Dana hires Paris to paint a portrait of her poodle,"Mack." The painting is to be done to Dana's personal satisfaction.Upon completion of the painting,which of the following will be true?
A)Dana may refuse to accept the painting if she really does not like it.
B)Dana may refuse to accept the painting only if a reasonable person would not like it.
C)Dana may refuse to accept the painting if she cannot afford to pay for it.
D)Dana may not refuse to accept the painting.

Accepted Answer

Since the painting is to be done to Dana's personal satisfaction, she may refuse to accept the painting if she really does not like it. This is because satisfaction is subjective, and therefore, she has the right to reject the painting if it does not meet her expectations.

Question 11

What is the key to all conditional clauses?
A)If a condition in a contract does not occur, public policy will require only substantial performance by the party for whom the condition failed.
B)If a contract contains a conditional clause, the requirement of good faith will be eliminated.
C)If a condition in a contract does not occur, one party will probably be discharged without having to perform his or her obligations under the contract.
D)If a contract contains a conditional clause, it must be expressly written with specific language.

Accepted Answer

The key to all conditional clauses in contracts is that if the condition specified in the clause does not occur, one party will likely be discharged from having to perform their obligations under the contract. This means that the failure of the condition acts as a trigger for non-performance.

Question 12

The Grand Performance Hall is in the process of remodeling and is scheduled to open for business after being closed for 50 years.As part of the remodeling,it is installing a new sound system.The sound system is to be installed by Sound Systems,Inc.on or before April 10.Opening night of the hall is May 1.The contract states that "time is of the essence" because of the opening-night deadline.Sound Systems has some financial difficulties and doesn't deliver the system until April 20.Grand Hall refuses to accept it,and Sound Systems sues.What will be the result?
A)Grand Hall wins; the contract date was strictly enforceable.
B)Sound Systems wins; the contract was substantially performed.
C)Grand Hall wins; there was commercial frustration.
D)Sound Systems wins; there was a true impossibility.

Accepted Answer

The contract clearly stated that "time is of the essence" due to the opening-night deadline. Sound Systems did not deliver the sound system on time and breached the contract. Grand Hall has the legal right to refuse to accept the system and terminate the contract. Sound Systems cannot sue for breach of contract because they did not fulfill their obligations within the required timeframe. Therefore, Grand Hall will likely win the case.

Question 13

Harry agreed to pay $100 to rent a rooftop spot in downtown Seattle to watch the New Year's Eve festivities.The festivities were unexpectedly canceled because of concern over a terrorist attack.Harry is
A)obligated to pay the $100.
B)not obligated to pay under the commercial impracticability doctrine.
C)not obligated to pay under the force majeure doctrine.
D)not obligated to pay under the frustration of purpose doctrine.

Accepted Answer

The frustration of purpose doctrine applies here because the primary purpose of renting the rooftop spot was to watch the New Year's Eve festivities, which were canceled due to unforeseen circumstances (concern over a terrorist attack). This makes the contract voidable since the fundamental reason for the agreement can no longer be fulfilled.

Question 14

What does it mean if a party to a contract has been discharged?
A)It means that person has been "let go" and has terminated the contract.
B)It means that person has "transferred" by assigning his or her duties to another party.
C)It means that person is "finished" and has no more duties under the contract.
D)It means that person has "delegated" and chosen to give up his or her contract rights.

Accepted Answer

If a party to a contract has been discharged, it means that he or she has fulfilled all duties, obligations, and responsibilities under the contract and is released from any further obligations or actions. It essentially means that person is "finished" with the contract.

Question 15

Jackie hires Charles to lay new carpet in her bedroom.Charles does such a bad job,that the only way to fix the carpet is to start over and relay the carpet.Which of the following best describes this situation?
A)This is substantial performance.Jackie must still pay something to Charles.
B)This is a material breach. Jackie must still pay something to Charles.
C)This is substantial performance. Jackie owes nothing to Charles.
D)This is a material breach. Jackie owes nothing to Charles.

Accepted Answer

Charles has committed a material breach of the contract by doing such a bad job that the only way to fix the carpet is to start over. In cases of a material breach, the non-breaching party is excused from performing any further and owes nothing to the breaching party. Therefore, Jackie owes nothing to Charles in this situation.

Question 16

Which of the following statements is accurate regarding a condition?
A)A condition is created only when the phrase "provided that" or a similar phrase introduces it.
B)A condition is an event that must occur before a party becomes obligated under a contract.
C)A condition must be expressly stated in order to be enforced.
D)A condition will not be enforced by the courts unless formal language is used, regardless of the intent of the parties to create a condition.

Accepted Answer

A condition is a requirement that must be met before a party is obligated under a contract, such as the completion of certain tasks or the occurrence of a specific event. It does not require any specific language to be enforced, and may be implied from the context of the agreement.

Question 17

Statutes of limitations
A)define how much money the injured party can sue for under a breach of contract claim.
B)define whether there has been substantial performance of a contract or a material breach.
C)limit the time in which an injured party may sue.
D)only apply to the sale of goods. There is no statute of limitations on a service contract.

Accepted Answer

Statutes of limitations limit the time in which an injured party can sue. They do not define how much money can be sued for, the nature of the breach, or only apply to the sale of goods.

Question 18

In January 2014,Professor Noe entered into a contract with State University.She agreed to teach full time during the 2014-2015 academic year.Professor Noe died on May 31,2014.Her estate
A)is obligated to find another person who will agree to teach during the academic year.
B)is discharged from any further obligations under the contract.
C)will be discharged from any obligations under the contract only if it can be shown that her death was unexpected.
D)will not be discharged. If the University has to pay more in order to hire a comparable substitute professor at the last minute, then the estate will be responsible for the difference in pay.

Accepted Answer

In case of death, the contract is terminated and the estate is discharged from any further obligations under the contract. This is due to the fact that death is an event that is beyond the control of the estate and cannot be attributed to any fault on their part. Therefore, the estate is not responsible for finding a replacement or paying for any additional costs that may be incurred by the University in order to find a substitute professor.

Question 19

Ron operates a garbage pickup business.He contracts to pick up garbage from an apartment complex for the next 52 weeks at a price of $150 per week.Unexpectedly,the landfill center where Ron takes the garbage to dispose of it,files for bankruptcy.As a result,Ron must travel an additional 100 miles to the nearest landfill center,turning Ron's expected profit into a loss of $40 per week.Ron's best argument in support of his petition to be discharged from the contract is
A)the mail box rule.
B)commercial impracticability.
C)frustration of purpose.
D)true impossibility.

Accepted Answer

The best choice is commercial impracticability. This situation falls under the doctrine of commercial impracticability where an unforeseeable event has made the performance of the contract impracticable for one of the parties. The bankruptcy of the landfill center has made it impracticable for Ron to perform the contract as agreed upon, resulting in a loss rather than a profit. Therefore, Ron can petition to be discharged from the contract due to commercial impracticability.

Question 20

Mary contracted to buy 100 table lamps.Under the terms of the agreement,Mary is to pay for the lamps upon delivery.This is an example of
A)a condition precedent.
B)a concurrent condition.
C)a condition subsequent.
D)a service condition.

Accepted Answer

A concurrent condition is when both parties are required to perform their obligations simultaneously. In this case, Mary is required to pay for the lamps at the time they are delivered.

Quiz 18: Performance, Breach and Discharge

Oxtron,Inc.substantially performed its obligations under a service contract.Oxtron is entitled to receive

Identify four factors courts consider in deciding the validity of commercial impracticability and frustration of purpose claims.

Which of the following statements is accurate concerning express conditions?

Sea Rovers,Inc.contracted to sell 1,000 pounds of shrimp to the Seafood Shack with delivery on June 1.On May 1,Sea Rovers advised the Seafood Shack that it would not be able to deliver the shrimp.The Seafood Shack

Which of the following events would have the best chance of excusing performance of a contract based on commercial impracticability?

Linda agrees to buy Missy's Greyhound race dog for $2,000.Linda is to deliver the money and take possession of the dog the next morning.That night,running his best race ever,the dog runs away from Missy,never to be seen again.What will be the outcome in this case?

The distinction between a condition precedent and a condition subsequent

Dana hires Paris to paint a portrait of her poodle,"Mack." The painting is to be done to Dana's personal satisfaction.Upon completion of the painting,which of the following will be true?

What is the key to all conditional clauses?

Harry agreed to pay $100 to rent a rooftop spot in downtown Seattle to watch the New Year's Eve festivities.The festivities were unexpectedly canceled because of concern over a terrorist attack.Harry is

What does it mean if a party to a contract has been discharged?

Jackie hires Charles to lay new carpet in her bedroom.Charles does such a bad job,that the only way to fix the carpet is to start over and relay the carpet.Which of the following best describes this situation?

Which of the following statements is accurate regarding a condition?

Statutes of limitations

In January 2014,Professor Noe entered into a contract with State University.She agreed to teach full time during the 2014-2015 academic year.Professor Noe died on May 31,2014.Her estate

Mary contracted to buy 100 table lamps.Under the terms of the agreement,Mary is to pay for the lamps upon delivery.This is an example of