Question 1

Which of the following is true?

Accepted Answer

If a contract can be performed, but doing so has become illegal, performance will be discharged on the basis of impossibility. This is known as objective impossibility, which means that performance has become impossible due to unforeseeable external circumstances that make performance illegal or impossible. The death of a party may or may not result in the discharge of that party's duties, depending on the terms of the contract and applicable law. A party cannot get out of a contract by destroying the subject matter of the contract, as this would constitute a breach of contract and the other party would be entitled to damages. The duty to sell goods is not discharged due to impossibility if the seller is unable to acquire the goods from its normal supplier, unless this inability was caused by an unforeseeable event beyond the seller's control.

Question 2

Rebecca owes Ian $5,000.Ian needs money in a hurry so he assigns his right to collect from Rebecca to Janet for $4,500.Several days later,Ian assigns his right to collect from Rebecca to Kristin for another $4,500.Ian then leaves town.Kristin is the first to notify Rebecca of the assignment.In the majority of states,which of the following best describes this situation?

Accepted Answer

The answer of Rebecca owes Ian $5,000.Ian needs money in...

Question 3

Ralph Co.enters into an agreement to sell 500 computers to Buyer.Ralph decides that it cannot fulfill its contract,so it transfers all its rights and duties under the contract to George Co.

Accepted Answer

This is both an assignment and a delegation because Ralph Co. is transferring its rights (assignment) and duties (delegation) under the contract to George Co.

Question 4

The bank lends money to Jane to buy a car.After several months,Jane sells the car to Dan.Dan agrees to pay off the loan to the bank.If Dan fails to pay the loan,then:

Accepted Answer

The bank can recover from either Dan or Jane because Dan has agreed to pay off the loan, but Jane is still ultimately responsible for the debt.

Question 5

Tenant has a lease on an apartment through December of the current year.Tenant and Newtenant go to Landlord to have Newtenant take over the lease through the end of December.Landlord agrees and releases Tenant from any responsibility under the lease.This is a(n):

Accepted Answer

This situation is an example of a novation, where a new party (Newtenant) is substituted for an original party (Tenant) in a contract (the lease). The landlord agrees to release the original party from any responsibility under the lease, and the new party takes over those obligations instead.

Question 6

The City of Monroe enters into an oral contract with Allied Construction Co.to pave a gravel road.The gravel road passes in front of John's home.Once the road is paved,John's home would increase significantly in value.Allied fails to pave the gravel road.If John sued Allied for breach of contract,then:

Accepted Answer

John is only an incidental third-party beneficiary in this scenario. An incidental third-party beneficiary is someone who may benefit from a contract but is not a direct beneficiary and cannot enforce the contract. Therefore, John would not prevail in a breach of contract lawsuit against Allied because he does not have standing to enforce the contract.

Question 7

Amy agrees to build a barn for Sally.The contract provides that Sally must be "personally satisfied with the barn." If the barn is completed in a workmanlike manner,which of the following tests would be used to test Sally's satisfaction?

Accepted Answer

The answer of Amy agrees to build a barn for...

Question 8

Pete leases an apartment.The written lease agreement states that the lease is not assignable without consent of the landlord.Pete assigns his lease to his sister Paula,without the landlord's consent.In most states:

Accepted Answer

In most states, a lease is not assignable without the consent of the landlord, and if the lease is assigned without consent, the assignment is invalid until the landlord consents. However, the landlord must be reasonable in any decision to not consent to the assignment. Therefore, in this scenario, Pete's assignment of the lease to his sister Paula without the landlord's consent is invalid until the landlord consents, and the landlord must be reasonable in deciding whether to give consent or not.

Question 9

Roger wants to buy a new car,so he borrows money from the bank.Several months later,he sells his car to Lisa,who agrees to pay the bank loan.

Accepted Answer

In this scenario, Roger borrowed money from the bank to buy a car, which creates a contractual obligation between Roger and the bank. When Lisa agrees to pay the bank loan, she is fulfilling Roger's obligation under the contract. Therefore, the bank is an intended third-party beneficiary of the contract between Roger and Lisa.

Question 10

Which of the following events would probably excuse performance of a contract because of commercial impracticability?

Accepted Answer

Commercial impracticability occurs when performance is made impracticable by an unforeseen event that is beyond the control of the parties, and not caused by the fault of either party. Option B is the only event that fits this description, as it is an unforeseeable trade embargo causing commodity prices to triple. The other options do not meet the requirements for commercial impracticability.

Question 11

A force majeure clause:

Accepted Answer

A force majeure clause excuses performance in the event of unforeseen circumstances beyond the control of the parties, such as natural disasters, wars, and other events that make performance impossible or impracticable. It is not related to the assignment of contract rights, third-party beneficiaries, personal satisfaction of the promisee, or delegation of duties.

Question 12

Assume that the players on the Colorado Rockies baseball team beach their contract by refusing to play the remainder of their games in the season.A restaurant located near Coors Field,where the games would have been played,sues the players.As a result:

Accepted Answer

The restaurant is not an intended beneficiary of the players' contract, meaning it had no legal right to sue the players for breach of contract. The contract was between the Colorado Rockies baseball team and the players, and the restaurant was not a party to that contract. Additionally, public policy considerations would not be relevant in this case. Neither promissory estoppel nor third-party beneficiary apply to this scenario.

Question 13

Luziva Co.enters into a contract to deliver 200 coats to Buyer.Luziva determines that it cannot honor the contract,so it assigns the contract to Maniva Co.Maniva Co.delivers the specified 200 coats to Buyer per the contract.

Accepted Answer

When a contract is properly assigned, the assignee (in this case, Maniva Co.) assumes all of the rights and obligations of the original party (Luziva Co.). Therefore, Buyer must accept the coats and pay Maniva Co. since they fulfilled the obligations of the original party. Option A is incorrect because the assignment is valid and Buyer cannot refuse to accept the coats because of the assignment. Option C is also incorrect because once a contract is assigned, the assignee becomes the responsible party to fulfill the obligations of the contract.

Question 14

Homeowner enters into an agreement with Grasscutter to cut the grass at Homeowner's house.The contract says nothing about delegation or assignment.Grasscutter gets a friend,Lawnmower to do the actual work.Which is true?

Accepted Answer

The contract does not prohibit delegation or assignment, so Grasscutter can have Lawnmower do the work. However, Grasscutter remains responsible for the quality of the work, so if Lawnmower fails to do the work properly, Grasscutter may still be held responsible.

Question 15

Ralph Co.contracts to sell 500 televisions to Buyer.Ralph decides that it cannot fulfill its contract,so it transfers all its rights and duties to George Co.If George Co.fails to deliver the televisions as scheduled,then:

Accepted Answer

The answer of Ralph Co.contracts to sell 500 televisions to...

Question 16

Paragon Studios hires Harry Ford to play Indiana Bones in one of its new movies.Harry decides that he cannot fulfill this contract so he assigns his rights and delegates his duties under the contract to Tom Smellnik,another famous actor and friend of Harry's.Which of the following best describes this situation?

Accepted Answer

In contracts involving personal services, especially those requiring unique skills or talents, duties cannot be delegated without the consent of the other party.

Question 17

A husband buys an insurance policy with a face value of $100,000 and names his wife as sole beneficiary.When the husband dies,the insurance company refuses to pay the wife the $100,000.Which of the following best describes this situation?

Accepted Answer

The wife in this case is a third-party beneficiary, and as such, has the right to enforce the contract and be paid the benefits. The insurance policy was meant to benefit her, even though she was not a party to the original contract. Therefore, she can sue the insurance company for the $100,000. Choice A is incorrect because lack of privity does not always prevent recovery by a third-party beneficiary. Choice B is incorrect because the wife was not a party to the contract. Choice C is incorrect because the wife has an insurable interest in her husband, which is why the policy was taken out in the first place.

Question 18

Under a mutual rescission,the parties to a contract:

Accepted Answer

Mutual rescission is the agreement between the parties to cancel and undo the entire contract. It terminates the obligations and rights created under the contract, making it as if the contract never existed. Therefore, choice C is the correct option.

Question 19

Which of the following is true?

Accepted Answer

An accord and satisfaction discharges the duties under the original contract only when it has been performed, whereas a substituted contract discharges duties under the original contract upon formation of the substituted contract. Additionally, an accord and satisfaction does not involve a new party, but a substituted contract does. Both types of contracts can occur for any kind of contract, not just contracts for the sale of goods.

Question 20

Roger contracted with Lori to produce a sculpture of her.The sculpture was to be made to Lori's satisfaction.Upon completion of the sculpture,which of the following is true?

Accepted Answer

The contract between Roger and Lori states that the sculpture must be made to Lori's satisfaction. This means that if Lori does not like the sculpture, she may refuse to accept it. The contract does not mention anything about a reasonable person's opinion or affordability, so options B and C are incorrect. Option E is also incorrect because Lori has the right to refuse the sculpture if it does not meet her satisfaction.

Quiz 7: Third-Party Rights and Discharge

Which of the following is true?

Ralph Co.enters into an agreement to sell 500 computers to Buyer.Ralph decides that it cannot fulfill its contract,so it transfers all its rights and duties under the contract to George Co.

The bank lends money to Jane to buy a car.After several months,Jane sells the car to Dan.Dan agrees to pay off the loan to the bank.If Dan fails to pay the loan,then:

Tenant has a lease on an apartment through December of the current year.Tenant and Newtenant go to Landlord to have Newtenant take over the lease through the end of December.Landlord agrees and releases Tenant from any responsibility under the lease.This is a(n) :

Amy agrees to build a barn for Sally.The contract provides that Sally must be "personally satisfied with the barn." If the barn is completed in a workmanlike manner,which of the following tests would be used to test Sally's satisfaction?

Pete leases an apartment.The written lease agreement states that the lease is not assignable without consent of the landlord.Pete assigns his lease to his sister Paula,without the landlord's consent.In most states:

Roger wants to buy a new car,so he borrows money from the bank.Several months later,he sells his car to Lisa,who agrees to pay the bank loan.

Which of the following events would probably excuse performance of a contract because of commercial impracticability?

A force majeure clause:

Assume that the players on the Colorado Rockies baseball team beach their contract by refusing to play the remainder of their games in the season.A restaurant located near Coors Field,where the games would have been played,sues the players.As a result:

Luziva Co.enters into a contract to deliver 200 coats to Buyer.Luziva determines that it cannot honor the contract,so it assigns the contract to Maniva Co.Maniva Co.delivers the specified 200 coats to Buyer per the contract.

Homeowner enters into an agreement with Grasscutter to cut the grass at Homeowner's house.The contract says nothing about delegation or assignment.Grasscutter gets a friend,Lawnmower to do the actual work.Which is true?

Ralph Co.contracts to sell 500 televisions to Buyer.Ralph decides that it cannot fulfill its contract,so it transfers all its rights and duties to George Co.If George Co.fails to deliver the televisions as scheduled,then:

A husband buys an insurance policy with a face value of $100,000 and names his wife as sole beneficiary.When the husband dies,the insurance company refuses to pay the wife the $100,000.Which of the following best describes this situation?

Under a mutual rescission,the parties to a contract:

Which of the following is true?

Roger contracted with Lori to produce a sculpture of her.The sculpture was to be made to Lori's satisfaction.Upon completion of the sculpture,which of the following is true?