Question 1

When a contracting party refuses to complete the contract before the actual time of performance,it is called a(n)________.

Accepted Answer

Anticipatory repudiation occurs when a contracting party decides not to complete the contract before the actual time of performance.This situation often arises when market conditions change and one party realizes that it will not be profitable to carry out the terms of the contract.

Question 2

Which of the following occurs when parties agree that they simply wish to discharge each other from their mutual obligations and,therefore,rescind or cancel the contract?

Accepted Answer

Parties may agree that they simply wish to discharge each other from their mutual obligations and,therefore,rescind or cancel their contract.This is known as mutual rescission.

Question 3

If the plaintiff is seeking legal damages which would put him in the same position he would have been in had the contract been fully performed,he is suing for ________ damages.

Accepted Answer

If the plaintiff is seeking legal damages which would put him in the same position he would have been in had the contract been fully performed,he is suing for compensatory damages.

Question 4

Monetary damages are also referred to as ________ damages.

Accepted Answer

Monetary damages are also referred to as legal damages,and they include compensatory,punitive,nominal,and liquidated damages.

Question 5

If the parties to a contract put a new agreement in place of their original agreement,it is called a(n)________.

Accepted Answer

Sometimes,instead of canceling their agreement and terminating their relationship,contracting parties may choose to substitute a new agreement in place of the original.The substituted contract immediately discharges the parties from their obligations under the old contract and replaces those obligations with the new obligations imposed by the substituted contract.

Question 6

If the plaintiff is seeking legal damages that are designed to punish the defendant and deter him and others from engaging in similar behavior in the future,the plaintiff is seeking ________ damages.

Accepted Answer

If the plaintiff is seeking legal damages that are designed to punish the defendant and deter him and others from engaging in similar behavior in the future,the plaintiff is seeking punitive damages.

Question 7

What doctrine arose from cases in England in which parties,who had contracted for rooms along a parade route for the king's coronation,received their money back when the coronation was canceled because the king became ill?

Accepted Answer

The frustration of purpose doctrine arose from the so-called coronation cases in England.Numerous parties had contracted for rooms along the parade route for the king's coronation,but the king became ill and the coronation was canceled.The courts held that the parties' duties under the room contracts should be discharged,and that any payments made in advance should be returned because the essential purposes of the contracts could no longer be fulfilled,through no fault of any of the parties.

Question 8

From what country did equitable remedies recognized in the United States originate?

Accepted Answer

Equitable remedies grew out of the English courts.Today,the most common equitable remedies include rescission and restitution,orders for specific performance,and injunctions.

Question 9

Which of the following occurs when the parties to the agreement wish to replace one of the parties with a third party?

Accepted Answer

Sometimes the parties to an agreement choose to replace one of the parties with a third party.This substitution of a party is called a novation.The original duties remain the same under the contract,but one party is discharged and the third party now takes the original party's place.All three parties must agree to the novation for it to be valid.

Question 10

Suppose that Jeremiah was unfairly terminated before his employment contract expired,and he had to spend $500 to find another job.His job search expenditures would be considered ________ damages.

Accepted Answer

In addition to losing the benefit of the bargain,the plaintiff may suffer other losses caused directly by the breach.These losses may be compensated as incidental damages.

Question 11

Monetary damages awarded to a plaintiff in a very small amount are ________ damages.

Accepted Answer

If no actual damages resulted from the breach of contract,the court may award the plaintiff nominal damages.The award is typically for $1 or $5,but it serves to signify that the plaintiff has been wronged by the defendant.

Question 12

A(n)________ breach occurs when a party unjustifiably fails to substantially perform his obligations under the contract.

Accepted Answer

A material breach discharges the nonbreaching party from his obligations under the contract.A material breach occurs when a party unjustifiably fails to substantially perform his obligations under the contract.

Question 13

The obligation to use reasonable efforts to minimize damage resulting from a breach is referred as the duty to ________ one's damages.

Accepted Answer

To recover damages in a breach-of-contract case,the plaintiff must demonstrate that he used reasonable efforts to minimize the damage resulting from the breach.This is known as the duty to mitigate one's damages.

Question 14

Which is not considered a discharge of contractual obligations by agreement?

Accepted Answer

Sometimes the parties to a contract agree to discharge each other from their obligations.They may do so through four primary means: a)discharge by mutual rescission; b)discharge by a substituted contract; c)discharge by accord and satisfaction; or d)discharge by novation.Bankruptcy is the discharge of contractual obligations by operation of law.

Question 15

Which of the following is not an equitable remedy available for a breach of contract?

Accepted Answer

Today,the most common equitable remedies include rescission and restitution,orders for specific performance,and injunctions.Novation is not an equitable remedy but is instead the substitution of a party in an agreement.

Question 16

When one of the parties to an agreement wants to substitute a different performance for his original duty under the contract,he is seeking a(n)________.

Accepted Answer

An accord and satisfaction is used when one of the parties wishes to substitute a different performance for his original duty under the contract.The promise to perform the new duty is called the accord,and the actual performance of that new duty is called the satisfaction.

Question 17

Which type of damages would occur if the parties specify in advance the amount of losses or a formula in assessing the losses against the breaching party?

Accepted Answer

Typically,the court determines the amount of damages to which a nonbreaching party is entitled.Sometimes,however,the parties recognize that if a breach of contract occurs,it will probably be somewhat difficult for the court to determine exactly what the damages are.To prevent a difficult court battle,the parties may specify in advance what the liquidated damages will be if there is a particular kind of breach.

Question 18

A contract may be discharged by operation of law through ________.

Accepted Answer

Sometimes a contract may be discharged not by anything the parties do,but instead by operation of law.Alteration of the contract,bankruptcy,tolling of the statute of limitations,objective impossibility of performance,commercial impracticability,and frustration of purpose are all situations in which a contract may be discharged by operation of law.

Question 19

Why did equitable remedies come into being?

Accepted Answer

Equitable remedies grew out of the English court's authority to fashion remedies when existing laws did not provide adequate ones.These remedies were typically unique solutions specifically crafted to the demands of the situation.Today,the most common equitable remedies include rescission and restitution,orders for specific performance,and injunctions.

Question 20

________ is used as a basis for discharge by operation of law when performance is still objectively possible but would be extraordinarily injurious or expensive to one party.

Accepted Answer

Commercial impracticability is used to discharge a contract when performance is still objectively possible but would be extraordinarily injurious or expensive to one party.Commercial impracticability arises when,because of an unforeseeable event,one party would incur unreasonable expense,injury,or loss if that party were forced to carry out the terms of the agreement.

Quiz 14: Discharge and Remedies

When a contracting party refuses to complete the contract before the actual time of performance,it is called a(n) ________.