Question 1

Adrienne contracted to convey real estate to Rich.However Adrienne died before the conveyance is completed.What is the status of the parties?
A)Adrienne is excused for nonperformance.
B)Rich will be directed by the court to end the contract.
C)Adrienne's performance was impossible.
D)Rich can enforce the contract against Adrienne's estate.

Accepted Answer

The promisor's death or illness does not amount to an excuse of nonperformance of duties in contracts that can be delegated to another,such as the duty to deliver goods,pay money,or convey real estate.

Question 2

Damages that are agreed upon at the time the contract is entered into are called ________.
A)compensatory damages
B)consequential damages
C)liquidated damages
D)mitigation of damages

Accepted Answer

The parties to a contract may expressly provide in their contract that a specific sum shall be recoverable if the contract is breached.Such provisions are called liquidated damages provisions.

Question 3

Sklar,an accountant,purchased two computers from Wiz Corp.Sklar discovered material defects in the computers 10 months after taking delivery.Three years after discovering the defects,Sklar commenced an action for breach of warranty against Wiz.Wiz raised the statute of limitations as a defense.The original contract between Wiz and Sklar contained a conspicuous clause providing that the statute of limitations for breach of warranty actions would be limited to 18 months.Under the circumstances,Sklar will:
A)win because the action was commenced within the four-year period as measured from the date of delivery.
B)win because the action was commenced within the four-year period as measured from the time he discovered the breach or should have discovered the breach.
C)lose because the clause providing that the statute of limitations would be limited to 18 months is enforceable.
D)lose because the statute of limitations is three years from the date of delivery with respect to written contracts.

Accepted Answer

Since the contract explicitly stated that the warranty actions would be limited to 18 months,Sklar cannot claim any damages.

Question 4

Winston contracts to sell a plot of land called Blackacre to Paris for $500,000.Winston breaches the contract and Paris sues him.Blackacre's reasonable market value at the time of the breach was $525,000.Paris can recover:
A)nothing,for he hasn't really suffered any harm.
B)nothing,because specific performance is his only remedy here.
C)only $25,000.
D)the entire $500,000.

Accepted Answer

The calculation of the loss in value experienced by an injured party differs according to the sort of contract involved and the circumstances of the breach.In contracts involving nonperformance of the sale of real estate,for example,courts normally measure loss in value by the difference between the contract price and the market price of the property.

Question 5

Price signed a contract to sell Wyatt a parcel of land for $90,000.The entire sales price was payable at the closing.Price decided to keep the land.If Wyatt commences an action against Price,what relief is Wyatt most likely to receive?
A)Specific performance
B)Compensatory damages and specific performance
C)Punitive damages
D)Compensatory damages and punitive damages

Accepted Answer

The remedy of specific performance is available in cases for goods considered to be unique;contracts for the sale of real estate are the most common subjects of such decrees because every tract of real estate is presumed to be unique.Since Wyatt has not made any payment for the land,he cannot claim monetary damages.

Question 6

Someone who attempts to recover for breach of contract:
A)can recover only for those losses that he can prove with reasonable certainty.
B)can recover for all consequences of the breach,whether foreseeable or not.
C)can only do so for consequential damages.
D)has no duty to mitigate (or minimize)damages.

Accepted Answer

In a claim of breach of contract,a person may recover damages only for those losses that he/she can prove with reasonable certainty.

Question 7

Maria and Joe entered into a contract for the sale of Maria's car.Delivery of the car and payment were to be made on March 1.Joe clarified that he needed the car so that he can commute between San Francisco and Oakland to his new job that is starting on March 2.Maria breached the contract and failed to deliver the car on March 1.Joe needed a car to commute so he rented a car at $30 per day for 20 days,which was the reasonable amount of time it took him to locate and buy another car.Joe sued Maria for his losses,including the $600 car rental.The $600 makes up the ________ damages.
A)liquidated
B)consequential
C)punitive
D)specific performance

Accepted Answer

Consequential damages compensate for losses that occur as a consequence of the breach of contract.In this case,Joe is claiming the money he lost as a consequence of Maria's failure to deliver the car on time.

Question 8

Which of the following characterizes the statute of limitations?
A)The time period fixed by the statute of limitations is uniform throughout the states.
B)The recording of the contract stops the running of the statute of limitations.
C)The time period fixed by the statute of limitations begins when the contract is recorded.
D)The time period for oral contracts is different from that of written ones.

Accepted Answer

The time period for bringing a contract action varies from state to state,and many states prescribe time periods for cases concerning oral contracts that are different from those for cases concerning written ones.

Question 9

Upon ________,each party who has been benefited by the other's performance must compensate the other for the value of the benefit conferred.
A)rescission
B)novation
C)accord and satisfaction
D)revocation

Accepted Answer

Upon rescission,each party that has been benefited by the other's performance must compensate the other for the value of the benefit conferred.

Question 10

The legal remedy of ________ requires the defendant to pay the value of the benefits that the plaintiff has conferred on him.
A)restitution
B)waiver
C)compensatory damages
D)accord and satisfaction

Accepted Answer

An injured party can take recourse to the remedy of restitution that requires the defendant to pay the value of the benefits that the plaintiff has conferred on him.

Question 11

The equitable remedy of specific performance is most likely to be awarded by a court in which of the following circumstances?
A)Sale of a Da Vinci original where the seller refuses to deliver
B)Sale of a perfume bottle which the seller refuses to deliver
C)A promisee's failure to perform at a charity event
D)A promisee's failure to deliver a contract of employment

Accepted Answer

The remedy of specific performance is given in cases where the goods involved are unique or goods for which no substitute can be found;such as,heirlooms,works of art etc.

Question 12

Which of the following circumstances is a valid reason for the delay of a lawsuit once the statutory period is over?
A)Illegality of the contract
B)Change of mind of the nonbreaching party
C)Minority of the nonbreaching party
D)Addition of a third party

Accepted Answer

The statutory period ordinarily begins to run from the date of the breach.It may be delayed if the party who has the right to sue is under some incapacity at that time (such as minority or insanity)or is beyond the jurisdiction of the state.

Question 13

When a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on,both parties can use the remedy of:
A)specific performance.
B)accord and satisfaction.
C)waiver.
D)rescissions.

Accepted Answer

An accord is an agreement whereby a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on.When the promisor performs the accord,it is called a satisfaction.

Question 14

When is a person's duty to perform discharged on grounds of impossibility?
A)When a substitute is available
B)When there is a delay in the delivery of goods
C)In the presence of supervening illegality
D)A promisee's dissatisfaction with the performance

Accepted Answer

If a statute or governmental regulation enacted after the creation of a contract makes performance of a party's duties illegal,the promisor is excused from performing.This is called the doctrine of supervening illegality.

Question 15

On May 2,1972,Mix,an accountant,entered into an oral contract with Dell to provide certain accounting services to Dell.The contract was fully performed by both parties in 1974.On April 25,1988,Dell commenced a breach of contract action against Mix claiming that Mix improperly performed the accounting services.Mix's best defense to the action would likely be:
A)Parol evidence rule
B)Statute of limitations
C)Statute of frauds
D)Lack of consideration

Accepted Answer

According to the statute of limitations,a person who has breached a contractual duty is discharged from liability for breach if no lawsuit is brought before the statutory period elapses.In this case there has been unreasonable delay on the part of Dell in bringing a lawsuit against Mix.

Question 16

A party cannot recover for losses that he could have avoided without undue risk,burden,or humiliation.This is an example of:
A)Incidental damages
B)Consequential damages
C)Liquidated damages
D)Mitigating damages

Accepted Answer

A party cannot recover for losses that he could have avoided without undue risk,burden,or humiliation.For example,an employer who has wrongfully fired an employee would be liable only for the damages equal to his wages for the remainder of the employment period.It is the employee's duty to make reasonable amends by seeking a job elsewhere.

Question 17

The relinquishment of rights by a party in a contract is called a(n)________.
A)waiver
B)rescission
C)impossibility
D)reliance interest

Accepted Answer

A party to a contract may voluntarily relinquish any right he has under a contract,including the right to receive return performance.Such a relinquishment of rights is known as a waiver.

Question 18

Which of the following instances is a sufficient reason to cause commercial impracticability?
A)Increased cost
B)War
C)Collapse of market
D)Shortage of good

Accepted Answer

To be successful in claiming excuse based on impracticability,a promisor must be able to establish that the event that makes performance impracticable occurred without his fault and that the contract was made with the basic assumption that this event would not occur.Cost and market fluctuations,and the shortage of goods are assumptions that would automatically be taken into account in commercial transactions.

Question 19

Which form of damages involves a court ordering a party to a contract to perform his/her obligations under the contract?
A)Quasi-contract
B)Specific performance
C)Rescission
D)Promissory estoppel

Accepted Answer

Specific performance is an equitable remedy whereby the court orders the breaching party to perform his contractual duties as promised.

Question 20

Which form of damages is intended to give the victim of the breach of contract the "benefit of his bargain"?
A)Compensatory
B)Punitive
C)Nominal
D)Liquidated

Accepted Answer

In calculating the compensatory remedy,a court will attempt to protect the expectation interest of the injured party by giving him the "benefit of his bargain"-placing him in the position he would have been in had the contract been performed as promised.

Quiz 18: Performance and Remedies

Adrienne contracted to convey real estate to Rich.However Adrienne died before the conveyance is completed.What is the status of the parties?

Damages that are agreed upon at the time the contract is entered into are called ________.

Winston contracts to sell a plot of land called Blackacre to Paris for $500,000.Winston breaches the contract and Paris sues him.Blackacre's reasonable market value at the time of the breach was $525,000.Paris can recover:

Price signed a contract to sell Wyatt a parcel of land for $90,000.The entire sales price was payable at the closing.Price decided to keep the land.If Wyatt commences an action against Price,what relief is Wyatt most likely to receive?

Someone who attempts to recover for breach of contract:

Which of the following characterizes the statute of limitations?

Upon ________,each party who has been benefited by the other's performance must compensate the other for the value of the benefit conferred.

The legal remedy of ________ requires the defendant to pay the value of the benefits that the plaintiff has conferred on him.

The equitable remedy of specific performance is most likely to be awarded by a court in which of the following circumstances?

Which of the following circumstances is a valid reason for the delay of a lawsuit once the statutory period is over?

When a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on,both parties can use the remedy of:

When is a person's duty to perform discharged on grounds of impossibility?

A party cannot recover for losses that he could have avoided without undue risk,burden,or humiliation.This is an example of:

The relinquishment of rights by a party in a contract is called a(n) ________.

Which of the following instances is a sufficient reason to cause commercial impracticability?

Which form of damages involves a court ordering a party to a contract to perform his/her obligations under the contract?

Which form of damages is intended to give the victim of the breach of contract the "benefit of his bargain"?