Question 1

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; rather, they recognize that performance can be excused not only when it is literally impossible but also under circumstances where performance has become impracticable due to extreme and unreasonable difficulty, expense, injury, or loss involved.

Question 2

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 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

This statement is true according to the concept of accord and satisfaction in contract law. When parties agree to substitute a new contract for an existing one to satisfy a debt, the debt is not considered discharged until the substituted agreement is performed by the debtor. In this case, Marie must paint Nathan's house to fully satisfy the debt of $900.

Question 4

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

Accepted Answer

Concurrent conditions refer to the situation where both parties have the obligation to perform their duties simultaneously.

Question 5

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 express condition.
B) an implied-in-fact condition.
C) an implied-in-law condition.
D) a condition subsequent.

Accepted Answer

The provision in the contract requiring the certificate of occupancy is an express condition because it is explicitly stated in the contract. An express condition is a term in a contract that must be fulfilled before performance under the contract is required. In this case, Paul must provide the certificate of occupancy before Bill is required to make payment.

Question 6

Which of the following is a contract with a condition subsequent?
A) Rhonda enters into a contract to buy a new car conditional upon her getting a loan from her bank.
B) Roger bought a VCR but he may return the VCR within ten days and get all of his money back.
C) Both (a) and (b) are examples of a condition subsequent.
D) Neither (a) nor (b) is an example of a condition subsequent.

Accepted Answer

A condition subsequent is an event or state of affairs that brings an end to something else. In option B, the contract is valid until Roger decides to return the VCR within ten days, which would terminate the contract.

Question 7

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

Accepted Answer

Both the Code and the Restatement have provisions for discharge of contractual duties in cases involving commercial impracticability. Under the Code, this is covered under the doctrine of impracticability, while the Restatement uses the term "impracticability of performance."

Question 8

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 court system. The obligation or debt still exists, but cannot be legally enforced after the statute of limitations has expired.

Question 9

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

The statement accurately describes the evolution of the doctrine of frustration of purpose.

Question 10

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. This means Carl must fulfill this condition before Ron is obligated to pay, rather than after some other event or condition has been satisfied.

Question 11

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 a situation where it is physically or legally impossible for anyone to perform the contract, not due to personal incapacity like financial inability or lack of competence.

Question 12

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 correctly describes a condition precedent in an insurance policy.

Question 13

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

When a debtor files for bankruptcy and is discharged by the court, they are released from all dischargeable debts, including any obligations under an executory contract. Therefore, Wilmer has no obligation to perform under the contract with Grace.

Question 14

If the contract does not state otherwise, standard goods under a contract for sale to meet the satisfaction of the buyer must:
A) meet the buyer's actual satisfaction, if honest and in good faith, even if unreasonable.
B) meet the buyer's actual satisfaction, only if reasonable.
C) meet a subjective standard.
D) satisfy a reasonable person.

Accepted Answer

The answer of If the contract does not state otherwise,...

Question 15

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 supervening illegality, and it means that if a contract becomes illegal due to a change in the law, the parties are no longer obligated to perform under the terms of the original agreement.

Question 16

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

Accepted Answer

A novation involves three parties: the original contracting parties and the new party. It is an agreement where the new party replaces one of the original parties in the contract, taking on their rights and obligations.

Question 17

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

Accepted Answer

This is the correct definition of tender in the context of contracts.

Question 18

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

Accepted Answer

It is common for contracts to require approval from third parties, such as government agencies, lenders, or other stakeholders. This condition is often included to ensure that all relevant parties are satisfied with the terms of the agreement before it is fully executed.

Question 19

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

Accepted Answer

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

Question 20

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

Accepted Answer

This statement is true. When one party breaches a contract, the other party has the right to pursue legal action for damages incurred as a result of the breach.

Quiz 17: Performance, Breach, and Discharge