Question 1

Assignments require the consent and agreement of all parties to the contract.

Accepted Answer

Assignments typically do not require the consent of all parties to the contract, as they involve transferring the rights or benefits from one party to another, not the obligations or duties, unless the contract specifically prohibits or restricts assignment.

Question 2

Liquidated damages must be directly related to the breach of contract for which they are compensating the non-breaching party.

Accepted Answer

Liquidated damages should be specifically tied to the breach of contract and the damages suffered by the innocent party. If they are not directly related to the breach, they may be considered a penalty and deemed unenforceable by a court.

Question 3

Anticipatory repudiation may be used when a party has knowledge that either a complete or a partial breach will occur by the other party.

Accepted Answer

The answer of Anticipatory repudiation may be used when a...

Question 4

Burt and Mel have entered into a contract in which Burt agrees to put a concrete driveway on Mel's property.If Burt delegates the duty of laying the driveway to Chuck and Chuck does an unacceptable job,Mel may sue Burt for damages.

Accepted Answer

Burt is responsible for fulfilling the contractual obligation of putting a concrete driveway on Mel's property. If Burt delegates this duty to Chuck and Chuck does an unacceptable job, it is still ultimately Burt's responsibility to ensure that the driveway is installed properly. Therefore, Mel may sue Burt for damages if the job is not satisfactory.

Question 5

Incidental beneficiaries are identified during the formation of the contract and known to the parties.

Accepted Answer

Incidental beneficiaries are not specifically identified during the formation of the contract and are not known to the parties; they benefit from the execution of the contract by chance or as a side effect, rather than by the contract's explicit intention.

Question 6

Impossibility of performance is subjective,meaning that one of the parties may unilaterally decide that performance is impossible,thus discharging the contract.

Accepted Answer

Impossibility of performance is an objective standard, meaning it must be proven that performance is truly impossible due to circumstances beyond the control of the obligated party, not simply decided unilaterally by one of the parties.

Question 7

Generally,courts do enforce a strict compliance standard for contract conditions.

Accepted Answer

Courts typically require strict compliance with the conditions outlined in a contract, meaning that parties must adhere to the exact terms specified in the agreement in order for it to be enforceable. This helps to promote certainty and predictability in contractual relationships. However, there may be some exceptions to this rule depending on the circumstances of the case and the specific language of the contract.

Question 8

Kent Corp.(KC),a general contractor building a new dorm at a university,contracted with Fine Rugs Inc.(FRI)to have a certain grade of industrial rugs installed in the dorm.The contract price was $180,000.After the rugs were installed,KC was dissatisfied with the rug quality.FRI insisted that the rugs installed were appropriate to the contract specifications and demanded full payment.KC sends FRI a check for $120,000,which KC believes is the proper value for the rugs installed,and marks the check "Paid in Full." FRI writes "Under Protest" on the check and deposits it.FRI may now,in most states,successfully sue KC for the balance of $60,000.

Accepted Answer

If FRI accepted the check marked "Paid in Full" and deposited it, they have effectively agreed to settle the debt for the amount stated in the check. By adding the notation "Under Protest," FRI has not refused the check, but they also cannot sue for the remaining balance. However, laws may vary by state, and it is always best to consult with a legal professional in such matters.

Question 9

Substantial performance will be enforced only if the deviation from complete performance is not material to the contract.

Accepted Answer

Substantial performance is a legal concept where if a party has performed enough of the contract to warrant payment, the performance is considered sufficient, provided the deviation from complete performance is not material or significant to the overall contract.

Question 10

Specific performance is almost always available when a real estate contract for the sale of land is involved.

Accepted Answer

Specific performance is a legal remedy that requires a party to fulfill the contractual obligations as agreed upon in a contract. In real estate, specific performance is almost always available when a contract for the sale of land is involved because real estate is considered a unique asset, and money damages may not adequately compensate the injured party if the contract is not fulfilled. However, there may be some exceptions based on the specific circumstances of the case.

Question 11

Mel is under contract with a textbook publisher to write an instructor's manual to accompany a new textbook.The contract states that the instructor's manual is to be completed by August 1.On July 1,the publisher calls Mel and asks for an update.Mel states that he's working hard and making progress.He then states that the August 1 deadline is "doable but it's going to be tough." Based on Mel's statement,the textbook publisher may claim an anticipatory repudiation and find another author to complete the project.

Accepted Answer

Mel's statement does not constitute an anticipatory repudiation as he still expresses an intention to complete the project, albeit with difficulty. Anticipatory repudiation occurs when one party unequivocally expresses an intention not to perform a contractual duty.

Question 12

In an assignment or delegation,third-party rights or duties occur after the contract is formed.

Accepted Answer

Third-party rights or duties occur after the contract is formed, typically through an assignment or delegation. This means that a third party gains or assumes certain rights or duties under the contract, but this occurs after the contract is already in effect between the original parties.

Question 13

A rescission of a contract may occur when one party chooses to end the agreement.

Accepted Answer

A rescission of a contract typically requires mutual agreement from all parties involved, or it may occur due to specific legal grounds, not just one party's unilateral decision.

Question 14

Kathy and Tom have entered into a contract in which Mike has been named and included as an intended beneficiary by Kathy.Should Tom or Kathy breach the contract,Mike may sue both Tom and Kathy for breach of contract.

Accepted Answer

Since Mike has been named and included as an intended beneficiary in the contract, he has legal rights and can sue both Tom and Kathy for breach of contract if either of them fails to fulfill their obligations under the contract.

Question 15

Patios R Us contracts with Karl's Concrete to have 35 yards of concrete delivered to a job site it is working on.Payment is to be made 30 days after delivery.Five days after the concrete is delivered,Patios R Us files for bankruptcy and the filing is accepted by the court.Karl cannot sue to enforce the contract and receive payment.

Accepted Answer

The filing of a bankruptcy petition by Patios R Us operates as an automatic stay, which prevents creditors from taking any action to collect debts from the debtor. This stay would prevent Karl from suing to enforce the contract and receive payment.

Question 16

When an assignment is made,the assignee has the right to reform the contract and change the obligor's rights and duties as he or she sees fit.

Accepted Answer

When an assignment is made, the assignee receives the right to receive performance from the obligor but does not have the right to reform the contract or change the obligor's rights and duties. The assignee must accept the contract as it exists.

Question 17

Lisa is doing some landscaping around her house and ordered a delivery of topsoil.Her contract with the landscape supply company states that the payment for the topsoil must be paid when the truck arrives at her house to deliver the soil.The requirement that payment be made on delivery is an example of a concurrent condition.

Accepted Answer

A concurrent condition is a contractual condition in which the performance of two obligations is dependent on each other, meaning that one party's obligation to perform is contingent upon the other party's fulfillment of their obligation. In this case, the landscape supply company's obligation to deliver the topsoil is contingent upon Lisa's obligation to pay for it on delivery, making it an example of a concurrent condition.

Question 18

Steve is an avid bicyclist and sends in a $150 fee to participate in an across-the-state ride in the Midwest.A week before the ride,he breaks his leg.Unless the contract specifically provides for no refunds under any conditions,he will be able to receive a refund based on impossibility.

Accepted Answer

Steve's situation is an example of impossibility, as he is physically unable to participate in the ride due to his broken leg. Therefore, he may be eligible for a refund, unless the contract explicitly states that no refunds will be given under any circumstances.

Question 19

Carla has a contract with Alexis in which Alexis is to deliver 1,000 hand-decorated beverage holders in 60 days.When Carla calls the Psychic Hotline for her weekly reading,the psychic informs her that she has entered into a contract and the other party will not perform all the conditions and specifications in accordance with the agreement.Based on this knowledge,Carla may sue for an anticipatory repudiation.

Accepted Answer

Carla cannot sue for anticipatory repudiation based solely on the prediction from a psychic, as anticipatory repudiation requires a clear and unequivocal indication from the party in breach (Alexis in this case) that they will not perform their contractual obligations.

Question 20

George has entered into a contract with Mark to supply raw materials to Mark's factory.The contract does not contain an anti-delegation clause.George then delegates his duty to supply the raw materials to Wayne,a competitor of Mark.This is an example of a valid delegation.

Accepted Answer

Delegation of duties is generally allowed unless it involves personal skills or trust, or if it significantly changes the expected performance. Delegating to a competitor could be seen as altering the nature of the agreement, potentially making it invalid.

Quiz 7: Contract Enforceability and Performance