Deck 10: Performance and Breach of Contracts

Question 1

Intentional misrepresentation is commonly referred to as ________.

A) mutual mistake of a material fact
B) mutual mistake of value
C) fraud
D) unilateral mistake

Answer 1

fraud

Question 2

________ refers to the knowledge that a representation is false.

A) Collusion
B) Duress
C) Ambiguity
D) Scienter

Answer 2

Scienter

Question 3

John feels that Matt defrauded him in the sale of a used car and wants to sue him. For John to succeed in court he will have to prove that Matt ________.

A) did not know John previously
B) made a false representation of a material fact
C) acted without scienter
D) was secretly working for John's long-time rival

Answer 3

made a false representation of a material fact

Question 4

The doctrine of undue influence, by which a court may permit the rescission of a contract, is a(n) ________ doctrine.

A) law
B) equitable
C) statutory
D) constitutional

Question 5

In a situation involving undue influence, the party who takes advantage of another person's mental, emotional, or physical weakness to unduly persuade that person to enter into a contract is called the ________.

A) servient party
B) correspondent
C) dominant party
D) fraudster

Question 6

In a situation involving undue influence, the party who is unduly persuaded to enter into a contract due to their mental, emotional, or physical weakness is called the ________.

A) servient party
B) correspondent
C) dominant party
D) fraudster

Question 7

Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000. Chelsea pays him $100,000 and moves in. A month later, Jonas learns that his state requires contracts for the lease of goods with payments of $1,000 or more to be in writing. Which of the following options does either party have?

A) Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds and is hence void.
B) The contract cannot be rescinded by either party as it has already been executed.
C) Chelsea can rescind the contract on the grounds of noncompliance with the Statute of Frauds.
D) Jonas can rescind the contract on the grounds of noncompliance with the Statute of Frauds.

Question 8

Section 2-201(1) of the ________ is the basic Statute of Frauds provision for sales contracts.

A) Uniform Commercial Code (UCC)
B) Sarbanes-Oxley Act
C) Uniform Computer Information Transactions Act (UCITA)
D) Lanham Act

Question 9

The term ________ refers to any oral or written words outside the four corners of a written contract.

A) concurrent condition
B) parol evidence
C) merger clause
D) implied condition

Question 10

Under the Statute of Frauds, any contract that transfers an ownership interest in real property must be in writing to be enforceable. Describe what is meant by "real property"for purposes of the Statute of Frauds.

Question 11

An obligee who transfers a right is known as a(n) ________.

A) third-party contractor
B) subassignee
C) incidental beneficiary
D) assignor

Question 12

After signing his latest contract, professional basketball star Michael James contracted with MacMansion Construction to build a $1 million home for his mother. If MacMansion Construction fails to build the home, can Michael James' mother sue MacMansion?

A) No, as she is not a party to the contract.
B) Yes, because she is an incidental beneficiary.
C) No, because she is an incidental beneficiary.
D) Yes, because she is an intended third-party beneficiary.

Question 13

After signing his latest contract, professional basketball star Michael James contracted with MacMansion Construction to build a $1 million home for his mother. Home developer Eric Muldoon purchased all of the lots surrounding the lot where James' mother's home would be built, figuring that the James house would increase the value of all of the real estate in the neighborhood. If MacMansion Construction fails to build the home, can Eric Muldoon sue MacMansion?

A) Yes, because he is an intended third-party beneficiary.
B) Yes, because he is an incidental beneficiary.
C) No, because he is an incidental beneficiary.
D) No, because he is an intended third-party beneficiary.

Question 14

In general, third parties do not acquire any rights under other people's contracts. Two exceptions include those for ________.

A) obligees and incidental beneficiaries
B) assignees and intended third-party beneficiaries
C) assignees and incidental beneficiaries
D) obligees and intended third-party beneficiaries

Question 15

A ________ is an unconditional promise to perform.

A) parol evidence
B) covenant
C) condition subsequent
D) rescission

Question 16

Contract language such as if, on condition that, provided that, when, after, and as soon as indicate a(n) ________.

A) condition
B) covenant
C) concurrence
D) incidental

Question 17

An agreement whereby the parties agree to settle a contract dispute by accepting something different than in the original contract, and the subsequent performance of this agreement, is called a(n) ________.

A) accord and satisfaction
B) novation and rescission
C) agree to disagree
D) plea bargain

Question 18

An accord, by itself, does not discharge the original contract. The accord ________ the original contract until the accord is performed, i.e., satisfaction.

A) rescinds
B) novates
C) suspends
D) cancels

Question 19

Satisfaction of an accord discharges ________.

A) only the accord
B) only the original contract
C) both the accord and the original contract
D) neither the accord nor the original contract if it is without a novation

Question 20

If an accord is not satisfied when it is due, the aggrieved party may ________.

A) enforce only the accord
B) enforce either the accord or the original contract
C) enforce only the original contract
D) prosecute for fraud

Question 21

Describe a force majeure clause in a contract, and give some examples.

Question 22

Substantial performance is also called ________.

A) minor breach
B) material breach
C) complete breach
D) strict breach

Question 23

Inferior performance is also called ________.

A) minor breach
B) material breach
C) complete breach
D) strict breach

Question 24

Compensatory damages are intended to place the nonbreaching party in the same position as if ________.

A) the contract had never existed
B) the contract had been drafted more favorably to the nonbreaching party
C) the nonbreaching party had contracted with the next best offer
D) the contract had been fully performed

Question 25

Specific performance would NOT be available for a contract where the subject matter of the contract is ________.

A) land
B) a rare work of art
C) ordinary personal property
D) heirlooms

Question 26

Before she had her first gold record, singer Taylor Gaga signed a contract with Louis' Bowl 'N' Brew to perform in the bowling alley's lounge on Labor Day weekend. Louis has been promoting the concert because without this concert, Louis will have to shutter the Bowl 'N' Brew. Louis learns that Taylor Gaga has recently signed a contract to perform at the municipal arena on Labor Day weekend. In his lawsuit against Taylor Gaga, what would be the most appropriate equitable relief that Louis should request.

Question 27

To promotes the arbitration of contract disputes, the U.S. Congress has enacted the ________.

A) Federal Arbitration Act
B) Uniform Commercial Code
C) Securities Exchange Act
D) Labor Relations Act

Question 28

Describe the arbitration process and how a contract dispute can go to arbitration.