Question 1

An implied-in-law condition and constructive condition are the same.

Accepted Answer

The answer of An implied-in-law condition and constructive condition are...

Question 2

Wilmer and Grace have an executory contract for the sale of some goods.Wilmer files for bankruptcy and is then discharged by the bankruptcy court.Wilmer has no obligation to perform under the contract with Grace.

Accepted Answer

Wilmer's discharge in bankruptcy releases him from all pre-petition debts and obligations, including his obligation to perform under the contract with Grace.

Question 3

Marie owes Nathan $900 and the parties agree that Marie will paint Nathan's house in satisfaction of the debt.The debt is not discharged until Marie performs the substituted agreement by painting Nathan's house.

Accepted Answer

The debt is not considered discharged until Marie completes the act of painting Nathan's house, as this act is the performance of the substituted agreement that both parties agreed upon to settle the original debt.

Question 4

Objective impossibility occurs if a particular contracting party is unable to perform because of financial inability or lack of competence.

Accepted Answer

Objective impossibility refers to external factors beyond the control of the contracting parties, such as natural disasters or unexpected government actions. Financial inability or lack of competence are considered subjective impediments, as they depend on the individual contracting party and are usually addressed in the negotiation and drafting stages of a contract.

Question 5

A contract may condition the performance of a party upon the approval of a third party.

Accepted Answer

A contract may include a condition that requires the approval or consent of a third party before one or both parties can perform their obligations. For example, a construction contract may require the approval of a local government authority before work can begin.

Question 6

After the coronation of Edward VII was postponed and parties who had entered into contracts in anticipation of the event filed numerous suits, the doctrine of frustration of purpose evolved.

Accepted Answer

This statement is true. The doctrine of frustration of purpose evolved as a result of the postponement of the coronation of Edward VII and the legal disputes that arose from parties who had entered into contracts in anticipation of the event.

Question 7

Paul, a contractor, has a contract to build a new office building for Bill.The contract contains a provision requiring Paul to furnish a certificate of occupancy from the building inspector before Bill is required to pay.This provision is:
A) an implied-in-fact condition.
B) an implied-in-law condition.
C) an express condition.
D) a condition subsequent.

Accepted Answer

This provision is an express condition because it is explicitly stated in the contract that Paul must furnish a certificate of occupancy before Bill is required to pay. Express conditions are clearly set out in the contract terms.

Question 8

The Code and the Restatement have no provisions for discharge of contractual duties in cases involving commercial impracticability.

Accepted Answer

Both the Uniform Commercial Code (UCC) and the Restatement of Contracts have provisions for discharge of contractual duties in cases involving commercial impracticability. The UCC refers to it as "impracticability of performance" while the Restatement refers to it as "impracticability of performance or frustration of purpose."

Question 9

Belinda has a household insurance policy, which requires that she notify the insurance company within 30 days of any loss before she is eligible to receive payment for her loss.The notification requirement is a condition precedent to the insurance company's obligation to perform, even though the notification must occur subsequent to the loss.

Accepted Answer

The statement accurately describes a condition precedent in Belinda's insurance policy.

Question 10

An express condition is usually preceded by which of the following terms?
A) Provided that.
B) After.
C) While.
D) All of these.

Accepted Answer

The answer of An express condition is usually preceded by...

Question 11

A breach of contract always gives rise to a cause of action for damages by the injured party.

Accepted Answer

This statement is generally true. A breach of contract means that one party has failed to fulfill their obligations under the contract, and as a result, the other party may suffer damages. The injured party can seek compensation for these damages through legal action. However, there may be certain exceptions and limitations to this rule depending on the specific circumstances of the case and the terms of the contract.

Question 12

A novation is an agreement between two parties to have one substitute for the other in a contract.

Accepted Answer

Novation is an agreement between three parties where a new party replaces an original party in a contract, with the consent of all parties involved, including the remaining original party.

Question 13

Tender is an offer by a party, who is ready, willing, and able, to perform his obligations under the contract.

Accepted Answer

Tender refers to the act of an individual or entity presenting to perform their obligations under a contract, indicating they are prepared, willing, and capable of fulfilling the terms agreed upon.

Question 14

The majority of courts hold that the running of the statute of limitations operates to discharge a contract.

Accepted Answer

The running of the statute of limitations does not discharge a contract; it merely bars the remedy to enforce the contract through the courts. The obligation still exists, but the legal ability to enforce it through a lawsuit is limited after the statute of limitations has expired.

Question 15

A contract may condition the duty of one contracting party to accept and pay for the performance of the other contracting party upon the approval of a third party who is not a party to the contract.

Accepted Answer

This is a valid provision that can be included in a contract. It is known as a "third-party approval" clause, and it means that one party's performance is contingent upon the approval or acceptance of a third party who is not a party to the contract. This is common in industries where third-party certification or inspection is required, such as construction or manufacturing.

Question 16

The Restatement and the Code have made the traditional test of objective impossibility more stringent by requiring that the performance must be actually or literally impossible in order to excuse a party from contractual duties.

Accepted Answer

The Restatement and the Code have not made the traditional test of objective impossibility more stringent; they recognize that performance can be excused not only when it is literally impossible but also when it is impracticable or fundamentally altered due to unforeseen events.

Question 17

If the performance of a contract that was legal when formed becomes illegal because of a subsequently enacted law, the duty of performance is discharged.

Accepted Answer

This is known as the doctrine of impossibility or impracticability of performance, which excuses performance of a contract if a supervening event (such as a change in law) makes performance illegal or impossible.

Question 18

If a party's principal purpose is substantially frustrated without his fault by the occurrence of an event whose nonoccurrence was a basic assumption on which the contract was made, the party's remaining duties to render performance are discharged, unless the party has assumed the risk.

Accepted Answer

This is a statement of the doctrine of frustration of purpose, which holds that a party may be excused from performance if an unforeseen event occurs that makes it impossible or impracticable to achieve the purpose of the contract, and the event was not anticipated by the parties when they entered into the agreement. However, this rule only applies if the frustrated party did not assume the risk of the event occurring, such as by including a force majeure clause in the contract.

Question 19

Carl, a contractor, has a contract with Ron, a realtor, to construct a new condominium complex.The contract provides that Carl must furnish a certificate of occupancy and conformity with the local fire code before Ron has an obligation to pay.The furnishing of the certificate is an implied-in-fact condition subsequent to the construction of the building.

Accepted Answer

The furnishing of the certificate is a condition precedent to Ron's obligation to pay, not a condition subsequent. Conditions precedent must be fulfilled before a party's contractual obligation becomes due.

Question 20

Concurrent conditions occur when mutual duties of performance are to take place simultaneously.

Accepted Answer

Concurrent conditions refer to a situation where both parties have duties to perform at the same time. This means that performance by one party is contingent on performance by the other party, and failure of one party to perform can result in a breach of contract.

Quiz 17: Performance, Breach, and Discharge