Deck 15: Discharge of Obligations

Question 1

The promise of a landowner to transfer title to the purchaser and the purchaser to tender payment to the seller is a condition subsequent.

Answer 1

False

Question 2

If, as often occurs, a contract is not performed exactly on time, failure to do so is a material breach.

Answer 2

False

Question 3

When a promisor announces before the time his performance is due that he will not perform, he is said to have committed an anticipatory breach.

Answer 3

True

Question 4

If an obligee makes a demand of reasonable assurance and no adequate assurances are forthcoming, the obligee may assume that the obligor will commit an anticipatory breach.

Question 5

If there is a novation, the original promisor remains liable to the promisee if the latter fails to perform.

Question 6

A waiver is whereby a party voluntarily gives up a right she has under a contract but doesn't give up the entire right to performance by the other side.

Question 7

A contract clause requiring performance "to the satisfaction" of the obligee is too subjective to be enforced.

Question 8

Implied conditions are stated in words in the contract, orally or written.

Question 9

No consideration is required to rescind an executory bilateral contract.

Question 10

Under Uniform Commercial Code Section 2-106(4), a party that ends a contract breached by the other party is said to have effected a termination.

Question 11

A condition precedent terminates a contract obligation upon the happening of an event in the future.

Question 12

At common law, any failure by the promisor to perform as contracted is grounds for the promisee to declare a breach.

Question 13

In discharge by substituted agreement, the parties to a contract agree to substitute some performance different from what was originally agreed, and once this new agreement is executed, the original contract is satisfied.

Question 14

When performance cannot be undertaken except with extreme difficulty or at highly unreasonable expense, it might be excused on the theory of commercial impracticability.

Question 15

A substituted agreement may simply replace the original one between the original parties.

Question 16

Under UCC Section 2-720, the use of a word like "cancellation" or "rescission" does, by itself, amount to a renunciation of the right to sue for breach of a provision that may have occurred before a rescission.

Question 17

Under the Uniform Commercial Code, there is no such thing as substantial performance.

Question 18

A condition precedent is a term in a contract (express or implied) that requires performance only in the event something else happens first.

Question 19

"The thing cannot be done" refers to that which is subjectively impracticable.

Question 20

Parties are free to agree to almost any contract they want, and they are free to agree to end the contract whenever they want.

Question 21

Nathan agrees to maintain the Jones' garden for as long as the original gardener, Deb, is away on vacation. This is an example of _____.

A) termination of Deb's services
B) a condition subsequent
C) cancellation of Nathan's services
D) a concurrent condition
E) an implied condition

Question 22

A condition that terminates an already existing duty of performance is known as a(n) _____.

A) concurrent condition
B) condition subsequent
C) implied condition
D) express condition
E) mutual rescission

Question 23

Under the Uniform Commercial Code, which of the following is said to have occurred when either of the two parties exercises a lawful right to end the contract other than for breach?

A) Cancellation
B) Termination
C) A perfect tender
D) Anticipatory breach
E) Mutual rescission

Question 24

The trend of the common law in the last 100 years has been toward more stringent enforcement of contract obligations.

Question 25

The doctrine of "substantial performance" allows the seller of goods who mostly performs the contract to collect some of the consideration due from the buyer

Question 26

Mary is obligated to deliver a parcel to Tony. But it is agreed between the two that Sheila will deliver the parcel to Tony instead of Mary. This is an example of discharge by _____.

A) material breach
B) waiver
C) substituted agreement
D) release
E) accord and satisfaction

Question 27

Upon Wally's graduation from college, his father ceremoniously rips up the promissory note for $20,000 that Wally had made in his father's favor for Wally's college expenses. Wally is discharged.

Question 28

When a promisor announces before the time for his performance is due that he will not perform, he is said to have committed a(n) _____.

A) substituted agreement
B) novation
C) waiver
D) condition subsequent
E) anticipatory breach

Question 29

When an obligor is discharged upon delivery of the writing or upon occurrence of a condition, _____ is said to have taken place.

A) a substituted agreement
B) a release
C) accord and satisfaction
D) novation
E) an implied condition

Question 30

The Uniform Commercial Code does not recognize any such thing as a substantial performance. In its place, it requires for there to be a(n):

A) demand of reasonable assurance.
B) anticipatory breach.
C) perfect tender.
D) implied condition.
E) condition subsequent.

Question 31

It is said that 'time is of essence' when:

A) the promisor refuses to fulfill the promised act in time.
B) the delay in time taken to fulfill the act results in financial loss to the promisor.
C) the promisee refuses to owe the promisor the value of the assignment.
D) an event terminates an existing duty of performance.
E) the promisee is affected by whether the promisor acts on time or not.

Question 32

_____ is said to exist when there is a radical departure from the circumstances that the parties reasonably contemplated would exist at the time they entered into the contract.

A) Cancellation
B) Impossibility
C) Termination
D) Impracticability
E) Frustration of purpose

Question 33

_____ comes into play when circumstances make the value of one party's performance virtually worthless to the other.

A) Impossibility
B) Impracticability
C) Frustration of purpose
D) Termination
E) Cancellation

Question 34

Which of the following represents an express condition?

A) Nora will babysit her sister's children only until the original nanny returns from vacation.
B) Beth can buy a car only when she has gathered enough funds.
C) Ruth promises to drop the mail at her mother's place provided there is no traffic.
D) If Anna gets support from her family, she will pursue further studies.
E) It is implied that when Jack promises to mow the front yard, he will mow the back yard as well.

Question 35

A concurrent condition arises when:

A) it terminates an already existing duty of performance.
B) it makes a difference to the promisee when the promisor acts on time.
C) it is unexpressed but understood to be part of the contract.
D) the duty to perform the contract is simultaneous.
E) the condition is stated in words in the contract, orally or written.

Question 36

A "time is of the essence" clause in a contract boilerplate is conclusive evidence that failure by the promisor to perform on time is a material breach.

Question 37

If a landlady accepts late payment by a tenant without objection, what means of discharge is she implementing?

A) Novation
B) Accord and satisfaction
C) Substituted agreement
D) Waiver
E) Release

Question 38

What is substantial performance?

A) If one side has performed, but not completely, so that the other side has received a benefit, the nonbreaching party owes something for the value received.
B) If one side has made efforts to perform, so that the other side has received a detrimental service, the nonbreaching party owes something for the effort made.
C) If the goods delivered according to the contract are the exact things ordered, and the party receives a detrimental performance, the nonbreaching party owes something for the damages done.
D) If one side has performed according to the contract and the other side is not satisfied, the latter owes something for the effort made.
E) When zero performance was executed, none of the parties owe anything to each other.

Question 39

Buyer agreed to buy Seller's house for $270,000. Buyer was relying a loan from her father to make the deal, but after Buyer signed the contract her father fell ill and was unable to make the loan. Buyer is excused from performance by impossibility.

Question 40

_____ conditions are understood to be part of the contract.

A) Implied
B) Expressed
C) Concurrent
D) Mutual
E) Negotiable

Question 41

What is a condition?

Question 42

Alice Accountant agrees to do Carl Client's federal income tax, state income tax, and gift taxes for the year. Alice fails to do the gift taxes, but she does the others. Client . . .

A) owes Alice nothing as she did not fully perform.
B) owes Allice something for what she did.
C) only owes Alice if he is satisfied with what she did.
D) can declare Alice in "anticipatory breach" and refuse to pay.
E) may, at his discretion, pay Alice or not.

Question 43

Thom takes his 1956 Thunderbird to Upholstery Shop for a new interior with the agreement that Thom "must be satisfied." When he gets the car back Thom says he is not satisfied because of very small imperfections in the seams sewed on the back seat-the imperfections are not noticeable except on a minute examination. Thom . . .

A) has to pay a fair amount for the job: he is being unreasonable.
B) Moderate
B) doesn't have to pay anything until Upholstery Shop does the job right.
C) doesn't have to pay anything at all and can take the car.
D) will only have to pay if a knowledgeable third party agrees the imperfections would not cause a reduction in points awarded for restoration at an antique car show.

Question 44

Seller agreed to sell and Buyer to buy gasoline at $3.95 per gallon, 1000 gallons a month, for four years. Two years in, the price of gasoline increased to $4.80 a gallon. Seller refused to perform further unless Buyer agreed to pay $4.50 per gallon.

A) Buyer must pay the higher price on the theory of "commercial impracticability."
B) Buyer must pay the higher price on the theory of "frustration of purpose"
C) If Buyer paid the higher price, Buyer could sue for a refund because Seller is not acting in good faith.
C) Moderate
D) Buyer must pay the higher price because Seller has substantially performed.

Question 45

Owner contracts with Painter for Painter to paint the interior of Owner's house while Owner is on vacation in Europe for six weeks. Owner, however, forgot to give Painter a house key or make other arrangements for Painter's access to the interior of the house. Painter moves on and takes other work. When Owner returns . . .

A) Painter must find time to paint Owner's house or answer in damages.
B) Moderate
Short Answer Questions
B) Painter is discharged from further obligation.
C) Owner will have to wait until Painter has time to do the job.
D) Painter must be given a right of first refusal to do the job.

Question 46

What is impracticability?