Question 1

Phil enters into a contract to hire Bob's Building Business to build a warehouse for Phil.The contract specifies that the warehouse should be built with HighQual Bricks.When construction starts,HighQual Bricks cannot provide enough bricks for the warehouse.Bob's Building Business substitutes Big Red Bricks,which are comparable in quality and price to HighQual Bricks.This deviation from the contract

Accepted Answer

The substitution of Big Red Bricks, which are comparable in quality and price, does not materially alter the contract and therefore has no effect on the contract. Phil cannot use this deviation to discharge himself from the contract, and Bob's Building Business is not required to increase its duties or suspend its duty to perform.

Question 2

On April 1,O.K.Contractors,Inc.,contracts to build a store for Lo-Cost Jewelers at a specific location in Metro City.On May 1,Metro changes its zoning laws to prohibit the construction of a commercial building at that location.When the store is not built,Lo-Cost files a suit against O.K.In this situation

Accepted Answer

The contract is discharged because it has become impossible to perform due to circumstances beyond the control of both parties, namely the change in zoning laws. Both parties are excused from their contractual obligations.

Question 3

Jason owes Stephen $1,000 for yard work Stephen performed for Jason.The money is due on May 1.On April 30,Jason goes to the bank to get the money and discovers that the bank will be closed until May 2.Jason

Accepted Answer

Jason will be in breach of contract if he fails to pay Stephen on May 1, as the closure of the bank does not constitute objective impossibility, and he is still obligated to fulfill the contract terms.

Question 4

Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week.When Handy cancels the contract,Ilsa spends $100 to obtain a similar job that pays $450 per week for a year.Ilsa is entitled to recover

Accepted Answer

Ilsa is entitled to recover the wages she would have earned at Handy Hardware Store but didn't because of their breach of contract. This includes the difference between the promised salary of $500 per week and the salary of the new job she had to take, which is $450 per week. Additionally, she is entitled to recover the $100 she spent to obtain the new job. Therefore, the best choice is C, which includes the difference between the wages at the two jobs plus the $100 Ilsa spent.

Question 5

Carol enters into a contract to hire Joanne to paint a portrait of Carol's favorite cat.Joanne agrees to do the portrait to Carol's satisfaction for $100.When Joanne finishes the portrait,Carol announces that she is not satisfied with the portrait because it does not look like her cat.Carol

Accepted Answer

The contract stated that Joanne would do the portrait to Carol's satisfaction, so if Carol is not satisfied, she can choose not to accept the portrait and therefore not owe Joanne any money. However, if Carol had provided specific instructions or requirements for the portrait and Joanne followed them but still did not meet Carol's satisfaction, then Carol would be required to pay Joanne for her work.

Question 6

Roy and Sheila are parties to a contract.They subse?quently agree that Tony should take Roy's place and assume all of his rights and duties under the contract.This is

Accepted Answer

A novation is an agreement between parties to a contract to replace one of the original parties with a new party, who will assume all of the rights and obligations of the original party. In this scenario, Tony is taking over Roy's role in the contract, and assuming all of his responsibilities and rights. Therefore, this is a novation rather than an assignment, which would transfer only Roy's rights without relieving him of his obligations.

Question 7

Super Toolmakers,Inc.,contracts to sell its business to True Hardware Corpo?ration.Before either party has performed,rescission of this con?tract requires

Accepted Answer

Rescission before performance by either party typically requires a mutual agreement to rescind.

Question 8

Juan and Isidro enter into a contract to buy,restore and reopen the Coastal Park Carousel.Before either party begins to perform,they agree to cancel their deal.This is

Accepted Answer

Mutual rescission occurs when both parties agree to cancel a contract before any performance has taken place. This is the case in the scenario given, where Juan and Isidro agree to cancel their deal before beginning to perform. Specific performance refers to a court order requiring a party to perform a specific action under the terms of a contract. Accord and satisfaction refers to an agreement between parties to settle a debt for less than the full amount owed. Novation refers to the substitution of a new contract or party for an existing one. None of these apply to the scenario described.

Question 9

Barbara and Johann are parties to a contract.They agree on a novation.The novation requires

Accepted Answer

A novation requires the existence of a previous, valid obligation between the parties. This means that there must already be a contract in place that the parties wish to replace with a new contract. Consideration amount and performance of the original contract are not specifically required for a novation to take place, although they may be elements of the new agreement. An accord and satisfaction is a separate legal concept that involves the settlement of a dispute over an existing obligation, and is not directly related to novation.

Question 10

Ben and Andrew are parties to a contract.They agree on a novation.The novation does NOT require

Accepted Answer

Novation involves the substitution of a new contract for an existing one, with the intention of discharging the obligations of the original contract. Therefore, the performance of the original contract by all parties is not necessary for a novation to take place. However, the agreement by all parties to a new contract and the creation of a new valid contract are essential for a novation to be effective. The existence of a previous valid obligation is also not necessary, as a novation can occur even if the original contract was voidable or unenforceable.

Question 11

Coco agrees to work as Darcy's personal accountant for one year but dies in the sixth month of the contract.Coco's estate

Accepted Answer

Coco's death makes it impossible for her to fulfill the contract, and therefore her estate is discharged from any contractual liability. Coco's estate is not obligated to find a replacement or pay liquidated damages, nor is it required to refund any money paid to Coco on the contract, as Coco did provide some accounting services before her death.

Question 12

Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee Stand chain.The next day,Damien tells Clarice that he has accepted a job in New York and cannot design her campaign.She files a suit against Damien.As compensatory damages,she can recover

Accepted Answer

The compensatory damages in this case would be the amount of money Clarice paid to Damien, which is $10,000. Therefore, the best choice would be B, as it is the only option that reflects this amount.

Question 13

Hal contracts with Credit Services,Inc.(CSI),to pay $500 for its serv?ices.After CSI performs,they sign an accord,in which Hal promises to pay $400 within ten days instead of the $500.Hal does not pay.CSI can sue Hal under

Accepted Answer

Hal and CSI had initially entered into a contract where Hal would pay $500 for CSI's services. However, after the services were performed, they signed an accord, which is a new agreement modifying the original contract. In the accord, Hal promised to pay $400 within ten days instead of the $500. This accord is a legally binding agreement, and Hal is obligated to pay the $400. Since Hal did not pay, CSI can sue him under both the accord and the original contract.

Question 14

Wilson owes Shelby $5,000 for repairs on Wilson's Bobcat Skidsteer.Wilson has financial troubles and he and Shelby sign an accord,in which Wilson promises to pay $4,000 and give Shelby his mountain bike within thirty days instead of the $5,000.Wilson's delivery of the bike and $4,000 to Shelby is

Accepted Answer

This is an example of satisfaction, which occurs when parties agree upon a new performance to replace an original performance that was not fulfilled. In this case, Wilson and Shelby agreed that Wilson would pay $4,000 and give Shelby his mountain bike instead of the full $5,000 owed for the repairs. If Wilson delivers the bike and the $4,000 within thirty days, he will have satisfied his obligation to Shelby.

Question 15

Fact Pattern 16-1 (Questions 7-8 apply)
Mutual Company enters into a contract to employ Neil as an investment manager for two years.During the first year,Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.
-Refer to Fact Pattern 16-1.Neil's performance is most likely

Accepted Answer

Neil's frequent absences and inadequate management of Mutual's investments would most likely be considered a material breach of his employment contract.

Question 16

Lily is a farmer.When bad weather destroys her crop,her obliga?tion to deliver it un?der an outstanding contract with Macro Food Corporation is

Accepted Answer

Lily's obligation to deliver the crop under the contract is discharged as bad weather, a natural calamity, is an unforeseeable event that is beyond her control. Under the doctrine of frustration of purpose, the performance of a contract is excused when an unforeseeable event makes it impossible for the parties to achieve the purpose for which they entered into the contract. As such, Lily is not liable for non-performance of the contract.

Question 17

Ruth contracts to provide Stan with fifty hours of telepathic personal coaching.The state legisla?ture sub?sequently passes a law making tele?pathic personal coaching illegal.This law will

Accepted Answer

The contract is impossible to perform due to the new law, which is considered an unforeseen event that makes performance illegal. Therefore, the contract will be discharged.

Question 18

Fact Pattern 16-1 (Questions 7-8 apply)
Mutual Company enters into a contract to employ Neil as an investment manager for two years.During the first year,Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.
-Refer to Fact Pattern 16-1.With respect to Mutual's duties,Neil's performance most likely

Accepted Answer

The answer of Fact Pattern 16-1 (Questions 7-8 apply)
Mutual Company...

Question 19

Hybrid Corporation enters into a contract with Insure Service,Inc.(ISI),to obtain health insurance for Hybrid employees.If ISI breaches the contract and Hybrid is awarded compensatory damages,the purpose would be to

Accepted Answer

The answer of Hybrid Corporation enters into a contract with...

Question 20

Mona and Nero want to discharge their contract by executing and per?forming a new agreement.They can best accomplish this by

Accepted Answer

The answer of Mona and Nero want to discharge their...

Quiz 16: Contract Discharge and Remedies