Question 1

A material breach occurs when performance is substantial, but not complete.​

Accepted Answer

A material breach occurs when the breach is so significant that it undermines the contract's very essence, preventing the contract from being fully performed or completed as intended.

Question 2

A novation requires the existence of a previous, valid obligation.​

Accepted Answer

A novation involves the substitution of a new obligation for an existing one, and therefore requires the existence of a previous, valid obligation.

Question 3

If no time for performance is stated in a contract, a reasonable time is implied.​

Accepted Answer

This is known as the implied term of a reasonable time in a contract. If no specific time for performance is stated in the contract, the law implies that the work must be completed within a reasonable period of time. The exact definition of a reasonable time can vary depending on the circumstances of the contract.

Question 4

Retail Outlets, Inc., contracts with Smooth Paving Inc. to grade and pave a parking lot. Smooth assigns the contract to Tough Road Company, which has a poor record of completing projects. Retail could most successfully argue that the contract cannot be assigned because​

Accepted Answer

Retail could argue that the assignment to Tough Road Company will materially increase the risk of nonperformance due to their poor record of completing projects. This is a valid reason for objecting to the assignment under the doctrine of assignment.

Question 5

Performance can be accomplished by tender.​

Accepted Answer

Tendering is a process through which a company invites bids or offers for a project or job. If the company selects the right tender or proposal, then it can achieve optimal performance in the project or job. Therefore, performance can be accomplished by tender.

Question 6

Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then​

Accepted Answer

By assigning his rights in the deal with Kasey to Jenny, Illya is giving up his right to collect the $1,000 from Kasey. Therefore, his right to the $1,000 is extinguished or no longer exists.

Question 7

Steel, Inc., and Transport Company enter into a contract. UniOil Corporation, which will indirectly benefit from the deal, is prevented from having rights under the contract by the principle of​

Accepted Answer

The principle that prevents UniOil Corporation from having rights under the contract is privity. Privity of contract means only the parties who have entered into the contract are bound by its terms and have rights under it. UniOil Corporation is just an indirect beneficiary and not a party to the contract between Steel, Inc., and Transport Company. As a result, they have no right to sue for breach of contract or enforce any terms of the contract.

Question 8

Lestor and MaryElise enter into a contract. Lestor agrees to mow MaryElise's yard every week for the summer. MaryElise is​

Accepted Answer

MaryElise is the party who is receiving the benefit of Lestor's promise to mow her yard, making her the obligee in the contract. Lestor is the party who is bound to perform the obligation, making him the obligor.

Question 9

A contractual obligation may not be discharged through novation.​

Accepted Answer

Novation is a process by which a new contract replaces an existing one, with the agreement of all parties involved. This new contract can discharge a contractual obligation, as it effectively replaces the original obligation with a new one. Therefore, option A is incorrect, and option B is correct.

Question 10

A discharge in bankruptcy will ordinarily allow a creditor to subsequently enforce the debtor's contract.​

Accepted Answer

A discharge in bankruptcy typically releases the debtor from personal liability for certain specified types of debts, meaning creditors cannot take legal action to enforce the debtor's obligation on those discharged debts.

Question 11

To rescind a contract, the parties must make a second agreement that satisfies the legal requirements for a contract.​

Accepted Answer

Rescinding a contract means cancelling or nullifying it. This can only be done by entering into a new agreement that is binding and satisfies the legal requirements for a contract, such as mutual assent, consideration, and capacity. Therefore, the statement is true.

Question 12

Rachel and Stuart enter into a contract for the sale of Rachel's textbook at the end of the fall semester for which Stuart agrees to pay $75. Rachel's transfer of her right to payment for the book to Terry is​

Accepted Answer

This is an example of an assignment, as Rachel is transferring her right to payment (which is considered an intangible property right) to Terry.

Question 13

When a contract party materially alters a written contract without consent, the other party must adapt his or her performance accordingly.​

Accepted Answer

When a contract party materially alters a written contract without consent, it is considered a breach of contract, and the other party may have legal remedies such as rescission, damages, or specific performance. The other party is not required to adapt their performance accordingly.

Question 14

Contracts that are executory on both sides can be rescinded by agreement.​

Accepted Answer

Contracts that are executory on both sides can be rescinded by agreement, meaning both parties can agree to cancel or end the contract.

Question 15

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.​

Accepted Answer

This is known as the doctrine of material breach and it allows the innocent party to be released from their obligations under the contract. The material breach occurs when one party makes a significant change to the terms of the contract without the other party's consent.

Question 16

A contract will be discharged if unforeseeable circumstances make it impossible to attain the contract's purpose.​

Accepted Answer

This is known as the doctrine of frustration, which relieves parties from their obligations when an unforeseeable event occurs that makes the contract impossible to perform.

Question 17

An occurrence or event that makes performance temporarily impossible operates to discharge the parties' contractual duties.​

Accepted Answer

An occurrence or event that makes performance temporarily impossible does not discharge the parties' contractual duties; it may only suspend them until performance becomes possible again.

Question 18

Any breach allows the nonbreaching party to sue for damages.​

Accepted Answer

This is the basic principle of breach of contract law. If one party breaches the contract, the other party can sue for compensation for the damages incurred as a result of the breach.

Question 19

​Anything less than complete performance is a material breach of contract.

Accepted Answer

Not all instances of incomplete performance constitute a material breach of contract. A material breach is one that significantly undermines the contract's purpose, but minor or partial non-performance might be considered an immaterial breach, depending on the contract's terms and the circumstances.

Question 20

An intentional failure to comply with the terms of a contract is not a breach.​

Accepted Answer

A deliberate failure to adhere to the terms of a contract is a breach, even if it was done on purpose.

Quiz 11: Third Party Rights and Discharge

A material breach occurs when performance is substantial, but not complete.​

A novation requires the existence of a previous, valid obligation.​

If no time for performance is stated in a contract, a reasonable time is implied.​

Retail Outlets, Inc., contracts with Smooth Paving Inc. to grade and pave a parking lot. Smooth assigns the contract to Tough Road Company, which has a poor record of completing projects. Retail could most successfully argue that the contract cannot be assigned because​

Performance can be accomplished by tender.​

Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then​

Steel, Inc., and Transport Company enter into a contract. UniOil Corporation, which will indirectly benefit from the deal, is prevented from having rights under the contract by the principle of​

Lestor and MaryElise enter into a contract. Lestor agrees to mow MaryElise's yard every week for the summer. MaryElise is​

A contractual obligation may not be discharged through novation.​

A discharge in bankruptcy will ordinarily allow a creditor to subsequently enforce the debtor's contract.​

To rescind a contract, the parties must make a second agreement that satisfies the legal requirements for a contract.​

Rachel and Stuart enter into a contract for the sale of Rachel's textbook at the end of the fall semester for which Stuart agrees to pay $75. Rachel's transfer of her right to payment for the book to Terry is​

When a contract party materially alters a written contract without consent, the other party must adapt his or her performance accordingly.​

Contracts that are executory on both sides can be rescinded by agreement.​

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.​

A contract will be discharged if unforeseeable circumstances make it impossible to attain the contract's purpose.​

An occurrence or event that makes performance temporarily impossible operates to discharge the parties' contractual duties.​

Any breach allows the nonbreaching party to sue for damages.​

​Anything less than complete performance is a material breach of contract.

An intentional failure to comply with the terms of a contract is not a breach.​

A material breach occurs when performance is substantial, but not complete.

A novation requires the existence of a previous, valid obligation.

If no time for performance is stated in a contract, a reasonable time is implied.

Retail Outlets, Inc., contracts with Smooth Paving Inc. to grade and pave a parking lot. Smooth assigns the contract to Tough Road Company, which has a poor record of completing projects. Retail could most successfully argue that the contract cannot be assigned because

Performance can be accomplished by tender.

Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then

Steel, Inc., and Transport Company enter into a contract. UniOil Corporation, which will indirectly benefit from the deal, is prevented from having rights under the contract by the principle of

Lestor and MaryElise enter into a contract. Lestor agrees to mow MaryElise's yard every week for the summer. MaryElise is

A contractual obligation may not be discharged through novation.

A discharge in bankruptcy will ordinarily allow a creditor to subsequently enforce the debtor's contract.

To rescind a contract, the parties must make a second agreement that satisfies the legal requirements for a contract.

Rachel and Stuart enter into a contract for the sale of Rachel's textbook at the end of the fall semester for which Stuart agrees to pay $75. Rachel's transfer of her right to payment for the book to Terry is

When a contract party materially alters a written contract without consent, the other party must adapt his or her performance accordingly.

Contracts that are executory on both sides can be rescinded by agreement.

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.

A contract will be discharged if unforeseeable circumstances make it impossible to attain the contract's purpose.

An occurrence or event that makes performance temporarily impossible operates to discharge the parties' contractual duties.

Any breach allows the nonbreaching party to sue for damages.

Anything less than complete performance is a material breach of contract.

An intentional failure to comply with the terms of a contract is not a breach.