Question 1

​Fact Pattern 13-1 
Lewis,an employee of Silos,Inc.,makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids.Consequently,Silos's bid is significantly low.
-Refer to Fact Pattern 13-1.Any contract with AgriCo-op that includes the mistake may be rescinded

Accepted Answer

The mistake in this scenario involves a material fact - the estimated costs for the project. A material fact is one that is significant and would influence the decision of the other party. Therefore, if the mistake relates to a material fact, the contract may be rescinded.

Question 2

Kari,a real estate agent,assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City.Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity.Linc is most likely a victim of

Accepted Answer

Kari's assurance that the property fronts on the most highly trafficked street in Metro City is a misrepresentation of fact, which led Linc to buy the property. This misrepresentation constitutes fraud, making Linc a victim of fraud.

Question 3

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

When Illya assigns his rights in the deal with Kasey to Jenny, it means that Jenny now has the right to collect the $1,000 from Kasey. Illya's debt to Jenny is unaffected and still needs to be paid, but Illya's right to the $1,000 is extinguished because he has transferred that right to Jenny.

Question 4

Seth offers to buy a house from Tia for less than Tia paid for it,stating that he would "hate to see anything bad happen to Tia or her house." Tia agrees to sell.Regarding this agreement,a court would likely

Accepted Answer

This agreement is an example of duress, as Seth is using a threat (the suggestion that something bad may happen to Tia or her house if she does not agree to sell) to force Tia to enter into the contract. Duress makes a contract voidable at the option of the party who was coerced, so a court would not enforce this agreement.

Question 5

Water Rites,LLC,enters into a contract to site and dig a well for Rancho Verde.Water Rites completely performs.Rancho Verde is entitled to

Accepted Answer

Water Rites has completely performed their obligations under the contract by successfully siting and digging the well for Rancho Verde. Therefore, Rancho Verde is not entitled to any further benefits or remedies from the contract.

Question 6

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in Overseas Bank through Newt's investment firm.Unknown to Mona,Newt realizes ongoing commissions from the investment.Most likely,Mona may

Accepted Answer

Newt has exerted undue influence on Mona to sign the contract without fully understanding its terms and conditions. Since Mona was induced by undue influence, she can rescind the contract. The fact that Newt realized commissions from the investment without disclosing it to Mona also strengthens the case of undue influence.

Question 7

Drake enters into a contract with Eve,who claims to have access to a stock-trading algorithm that will multiply an investment many times over.When the results do not match this promise,Drake learns that Eve does not have access to any unique software and files a suit against her,alleging fraud.Proof of an injury is required to

Accepted Answer

In a fraud case, the plaintiff must prove that they suffered an injury or loss as a result of the defendant's false statement or act. This injury or loss is necessary to recover damages in the case. Rescinding the contract, undoing Eve's influence, and punishing the defendant may be possible remedies in a fraud case, but they all require proof of an injury first. So, the best choice is A.

Question 8

Ed's Electric substantially performs its contract with Forest Hills Apartments,Inc.,to deliver and install an alarm system and parking lot lighting.Forest Hills is entitled to

Accepted Answer

When a party substantially performs their contract, the other party is entitled to damages for the part of the contract that was not fully performed. This is to compensate for the slight deviation from the agreed terms.

Question 9

Business Computer Solutions Education Service enters into a contract to employ Chandra as an instructor for two years to begin June 1.One month before the term begins,Business Computer is underbid by a competitor and loses a major client,Debt Consolidation Corporation.Business Computer now refuses to hire Chandra.Business Computer's repudiation of its contract to employ Chandra is most likely

Accepted Answer

Business Computer Solutions' refusal to hire Chandra one month before the agreed starting date is a material breach of contract. The loss of a major client does not excuse Business Computer from fulfilling their obligation to hire Chandra unless the contract explicitly includes a condition that permits them to terminate the agreement in such circumstances.

Question 10

Garland induces Jules to enter into a contract for the purchase of a Chef's Burger House restaurant.Garland knowingly misrepresents a number of material features about the restaurant and the business.When Jules discovers the truth,he can

Accepted Answer

Garland's fraudulent misrepresentation induced Jules to enter into the contract, thus Jules can rescind the contract on the basis of fraud.

Question 11

CrossCountry Trucking & Transport enters into a contract with Discount Outlet Stores to load,transport,deliver,and unload the cargo that Discount designates.CrossCountry's offer to perform,when the company is ready,willing,and able to do so,is

Accepted Answer

CrossCountry's offer to perform is a tender, which means an unconditional offer to perform a contract.

Question 12

Gliding Light,LLC,and Hang Gliders,Inc.,are parties to a contract.They subse-quently agree that High Riders Inc.should take Gliding Light's place and assume all of its rights and duties under the contract.This is

Accepted Answer

This is a novation, which is a type of contract that involves the substitution of one party for another. In this case, High Riders Inc. is taking the place of Gliding Light and assuming all of its rights and duties under the contract. This requires the consent of all parties involved, and effectively replaces the original contract with a new one that includes the new party.

Question 13

Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra.Kendra transfers her right to payment under the contract to County Bank.This transfer is

Accepted Answer

The transfer of Kendra's right to payment to County Bank is an assignment. An assignment is a transfer of rights under a contract from one party to another, where the assignee becomes entitled to receive the benefits of the contract in place of the assignor.

Question 14

Emil enters into a contract to buy Foley's cultivated bottomland and hill and bench acreage if County AgriCredit will lend Emil the funds to pay for the land.Emil's duty to perform is

Accepted Answer

Emil's duty to perform is conditional, as it is dependent on whether or not County AgriCredit will lend him the funds to pay for the land. If the loan is not approved or funded, Emil's duty to perform would not arise.

Question 15

Drainage & Irrigation Equipment,Inc.,contracts to sell its assets to Earth & Sky Aquatic Corpo-ration.Before either party has performed,rescission of this con-tract requires

Accepted Answer

Rescission of a contract requires mutual agreement to rescind, which means that both parties must agree to cancel the contract. The other options (accord and satisfaction, novation, settlement agreement) do not apply in this situation.

Question 16

Carpets n' Rugs,Inc.,agrees to carpet Downtown Realty's offices,using a particular brand of durable carpet.Carpets n' Rugs completes the job but uses a dif-ferent brand of wear- and weather-resistant carpeting.This is most likely

Accepted Answer

The answer of Carpets n' Rugs,Inc.,agrees to carpet Downtown Realty's...

Question 17

Nogales Ceramics pays Omar $15,000 to propose an online marketing campaign.Two days later,Omar tells Nogales that he has accepted a job in Silicon Valley and cannot plan the campaign.As compensatory damages,Nogales can recover

Accepted Answer

Nogales can recover the amount paid to Omar as compensatory damages, which is $15,000.

Question 18

Dharma enters into a contract to manage the operations of Esther's dental office for one year,renewable for subsequent one-year terms.If this contract is discharged like most contracts,it will be

Accepted Answer

If the contract is discharged, it means it has been successfully completed or fulfilled. Therefore, the correct answer is "performed".

Question 19

Dondi contracts to buy a custom espresso maker from Caffee Specialties,Inc.,for $4,500,but Caffee fails to deliver.Dondi buys the appliance else-where for $5,500.Dondi's measure of damages is

Accepted Answer

Dondi's measure of damages is the difference between the contract price and the market price of a substitute, which is $1,000. In addition to this, he can also recover incidental damages, such as the cost of searching for a substitute and transportation costs, for a total amount of $1,000 plus incidental damages.

Question 20

App Developers,Inc.(ADI),enters into a contract with Carmen,the chief executive officer of SalesCorp,to create an app for the firm.To fulfill the contract,ADI hires Max and ten other student interns.With respect to the contract between ADI and Carmen,Max is

Accepted Answer

Max is an incidental beneficiary because he is not a party to the contract between ADI and Carmen, nor was the contract made for his direct benefit. He was simply hired by ADI to fulfill their obligations under the contract.

Quiz 13: Contract Performance, breach, and Remedies Voluntary Consent