Question 1

Which of the following is true of "time for performance"?

Accepted Answer

When the time for performance is not stated in the contract, the contract must be performed within a reasonable time. This is known as the "doctrine of reasonable time," which implies that both parties involved should act in good faith and with reasonable promptness. If a reasonable time for performance is not met, then the party who failed to act will be in breach of the contract.

Question 2

Time Zone sells Gary an iWatch for $4,000 by representing it has a real gold case and watch band.Later,Gary finds that the iWatch case and band are just polished with golden color,and the watch could be bought in the local store for $100.Gary can sue Time Zone for:

Accepted Answer

Time Zone's misrepresentation about the iWatch being real gold when it was not constitutes fraud, which can justify an award of exemplary (or punitive) damages to punish the wrongdoer and deter similar conduct.

Question 3

________ performance occurs when a party,in good faith,executes all promised terms and conditions with the exception of minor details that do not affect the real intent of their agreement.

Accepted Answer

Substantial performance occurs when a party fulfills most of the terms and conditions but may have minor deviations or omissions, which do not affect the primary purpose or goal of the agreement. This performance is considered adequate, and the other party must fulfill their contractual obligations.

Question 4

Which of the following is true of consequential damages?

Accepted Answer

Consequential damages, also known as special damages, result from a breach due to special circumstances that exist with a particular contract. They are not the same as direct damages, which are the immediate and foreseeable losses that result from a breach. Consequential damages are unique to the specific contract and can include things like lost profits or other indirect losses that are not necessarily a direct result of the breach itself.

Question 5

Which of the following beneficiaries has no enforceable legal rights?

Accepted Answer

An incidental beneficiary is a third party who benefits from a contract between two other parties but has no enforceable legal rights. The other options (donee beneficiary, creditor beneficiary, and insurance beneficiary) all have enforceable legal rights.

Question 6

Better Houses,Inc.has been contracted to build an addition on the Joyners' house.It built half of the addition and then unexpectedly announced that it was not going to finish the job.Better Houses' decision to stop the job is called a(n):

Accepted Answer

Abandonment of contractual obligations occurs when one party stops performing their duties under a contract without justification or agreement from the other party.

Question 7

Tom and Nancy enter into a written contract for the sale of a dollhouse that Tom will custom-make for Nancy.In the contract,Nancy agrees to pay $350 if she breaks the contract.This sum of money is known as:

Accepted Answer

The sum of money agreed upon in the contract that Nancy will pay if she breaks the contract is known as liquidated damages. It is a predetermined amount agreed upon by both parties as the amount of compensation for any breach of contract.

Question 8

A(n)________ is a new agreement resulting from a bona fide dispute between the parties as to the terms of their original agreement.

Accepted Answer

Accord and satisfaction is a new agreement resulting from a bona fide dispute between the parties as to the terms of their original agreement. This new agreement involves a compromise where one party agrees to accept something less than what was originally promised, and the other party agrees to provide it in exchange for a release from further obligation. Mutual rescission involves both parties agreeing to terminate the original agreement, novation involves substituting a new party in place of one of the original parties, and termination by waiver involves one party voluntarily giving up their rights under the original agreement without creating a new agreement.

Question 9

________ occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract,even before being required to act.

Accepted Answer

Anticipatory breach occurs when one party to a contract clearly indicates that they will not perform their contractual obligations before the performance is due. This statement or action by the party demonstrates an intention not to perform the contract.

Question 10

________ occurs when one party makes false statements or commits some sort of false action that causes another party to rely on those falsehoods and then experience an injury or loss as a result.

Accepted Answer

Fraudulent misrepresentation involves the making of false statements or some sort of false action with the intention of inducing another party to rely on those falsehoods, resulting in injury or loss to the other party. This is a type of tort, or civil wrong, that can have legal consequences. The other choices are related to breaches of contract, which may or may not involve fraudulent misrepresentation.

Question 11

________ requires that both the parties return to the other any consideration already received or pay for any services or materials already rendered.

Accepted Answer

Mutual rescission is the cancellation of a contract by mutual agreement between the parties involved. It requires both parties to return any consideration that has already been exchanged or pay for any work that has already been completed. It effectively terminates the contract, and neither party has any further obligations or rights under it.

Question 12

Joe pays for his food at the drive-thru window as he receives it.The payment and the receipt of the food are ________ conditions.

Accepted Answer

The payment and receipt of the food happen at the same time, so they are concurrent conditions. Precedent conditions are those that must be met before something else can happen, subsequent conditions are those that happen after something else has occurred, and spontaneous conditions occur without any predictability or influence.

Question 13

Morey and Sheryl enter into a contract in which Morey agrees to pay Sheryl $40 to collect his mail while he is on a month-long vacation.Sheryl then delegates the duty to her son,Greg.In this delegation,Sheryl is the:

Accepted Answer

Sheryl is delegating a duty to her son, making her the assignor. Morey is the obligor and Greg is the assignee. The obligee is not mentioned in this scenario.

Question 14

John,a highly skilled mechanic specializing in Jabooti motorcycles,agrees to repair Gladys's Jabooti motorcycle,but when he becomes ill,he transfers that responsibility to Clark,a friend of his.The transfer to Clark is called a(n):

Accepted Answer

The transfer of responsibility from John to Clark is a delegation. A delegation is when one person transfers their responsibility to another person, and the second person assumes that responsibility.

Question 15

Jo is duly notified that her mortgage with Fund All Savings has been transferred to Big Loan Co.and that she should,henceforth,pay Big Loan Co.Jo continues to pay Fund All Savings and Big Loan Co.sues Jo for nonpayment.Which of the following is most likely to be the court's judgment?

Accepted Answer

Jo received a notice that her mortgage has been transferred to Big Loan Co. Therefore, she is liable to pay them and not Fund All Savings. The fact that she continued to pay Fund All Savings does not absolve her of her responsibility to pay the new mortgage holder.

Question 16

Henry borrows money from Commerce Bank to purchase a house.However,he moves to another city to attend graduate school and sells the house to Maria.Henry wants to be released from his payment obligations to Commerce Bank.Which of the following would release Henry from his liability to Commerce Bank?

Accepted Answer

A novation is an agreement between the original debtor (Henry) and the creditor (Commerce Bank) to substitute a new debtor (Maria) for the original debtor, with the creditor agreeing to release the original debtor from any further payment obligations. This would be the best option for Henry to be released from his liability to Commerce Bank. Option A is incorrect because a delegation only transfers the right to perform the obligation, but Henry is still liable to Commerce Bank. Option B is incorrect because the sale of the house does not automatically release Henry from his payment obligation. Option C is incorrect because a written notice alone would not release Henry from his liability, but a novation in which Commerce Bank agrees to substitute Maria for Henry would release Henry.

Question 17

Aspen assigns his right to receive payment from Donna to Henry.Later,Aspen assigns this same right to Doris.Doris gives notice to Donna on May 1,and Henry gives notice to Donna on May 2.Which of the following is most likely to be the court's ruling?

Accepted Answer

The answer of Aspen assigns his right to receive payment...

Question 18

Which of the following is an equitable remedy under contract law?

Accepted Answer

Injunctions are a type of equitable remedy in contract law, where a court orders a party to do or refrain from doing specific acts. Unlike monetary damages, which compensate the injured party, equitable remedies such as injunctions are designed to provide a more just and fair outcome by preventing or requiring actions.

Question 19

Claudia contracts with Friendly Paving Co.to install a new driveway.To pay for this work,Claudia transfers to Friendly Paving Co.her right to receive payment from Clifford for a loan she made him.Friendly Paving Co.is now a(n):

Accepted Answer

Claudia has transferred her right to receive payment from Clifford to Friendly Paving Co. This means that Friendly Paving Co. now has the right to collect payment as a creditor beneficiary.

Question 20

Satisfactory performance:

Accepted Answer

Satisfactory performance is an express or implied condition of every contract.

Quiz 12: Third Parties,discharge,and Remedies