Question 1

Which of the following is a type of damage award that may be granted by a court as a remedy for breach of contract:

Accepted Answer

A)  compensatory 
B)  expectancy 
C)  nominal 
D)  all of the other specific choices are correct 
E)  none of the other specific choices are correct 
A)  compensatory 
B)  expectancy 
C)  nominal 
D)  all of the other specific choices are correct 
E)  none of the other specific choices are correct

Question 2

A court award of $1.00 in damages would be called:

Accepted Answer

A)  compensatory 
B)  expectancy 
C)  liquidated 
D)  nominal 
E)  punitive 
A)  compensatory 
B)  expectancy 
C)  liquidated 
D)  nominal 
E)  punitive

Question 3

____ punish the wrongdoer in a breach of contract case by allowing the plaintiff to receive relief beyond compensatory or expectancy damages because of a tort.

Accepted Answer

A)  Punitive damages 
B)  Real damages 
C)  Super damages 
D)  Liquidated damages 
E)  Nominal damages 
A)  Punitive damages 
B)  Real damages 
C)  Super damages 
D)  Liquidated damages 
E)  Nominal damages

Question 4

Under the doctrine of discharge by impossibility of performance, impossibility occurs when:

Accepted Answer

A)  a party to a contract dies 
B)  a law is passed making performance illegal 
C)  the subject of the contract is destroyed 
D)  none of the other choices 
E)  all of the other specific choices 
A)  a party to a contract dies 
B)  a law is passed making performance illegal 
C)  the subject of the contract is destroyed 
D)  none of the other choices 
E)  all of the other specific choices

Question 5

The basic elements of a contract are: offer, acceptance, consideration, lawful subject matter, and genuine consent.

Accepted Answer

A) True 
 B)False

Question 6

An example of an equitable remedy is:

Accepted Answer

A)  compensatory damages 
B)  specific performance 
C)  nominal damages 
D)  special damages 
E)  none of the other choices 
A)  compensatory damages 
B)  specific performance 
C)  nominal damages 
D)  special damages 
E)  none of the other choices

Question 7

A contract formed by performance of actions requested by another party is:

Accepted Answer

A)  a voidable contract 
B)  a contract with a promissory estoppel clause 
C)  a pre-textual agreement 
D)  a parol evidence contract 
E)  none of the other choices 
A)  a voidable contract 
B)  a contract with a promissory estoppel clause 
C)  a pre-textual agreement 
D)  a parol evidence contract 
E)  none of the other choices

Question 8

The party claiming incapacity, or the lack of legal ability to create a contract:

Accepted Answer

A)  does not have the burden of proving it 
B)  must claim incapacity before the discovery stage of a trial 
C)  must have at least 3 witnesses who can testify on his behalf 
D)  must claim incapacity before acceptance 
E)  none of the other choices are correct 
A)  does not have the burden of proving it 
B)  must claim incapacity before the discovery stage of a trial 
C)  must have at least 3 witnesses who can testify on his behalf 
D)  must claim incapacity before acceptance 
E)  none of the other choices are correct

Question 9

If a house burns down before it sale is completed, the contract for sale is discharged by impossibility.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a form of discharge by agreement:

Accepted Answer

A)  rescission 
B)  novation 
C)  accord 
D)  satisfaction 
E)  all of the other specific choices are correct 
A)  rescission 
B)  novation 
C)  accord 
D)  satisfaction 
E)  all of the other specific choices are correct

Question 11

Termination of the offer can occur through the action of the parties or by the operation of law. The parties can terminate the offer by:

Accepted Answer

A)  revocation 
B)  rejection 
C)  fibulation 
D)  revocation or rejection 
E)  any of the other choices 
A)  revocation 
B)  rejection 
C)  fibulation 
D)  revocation or rejection 
E)  any of the other choices

Question 12

Suess signed a contract which included a covenant not to compete with his employer for a year if he left the firm. When Suess quit, he went into competition with his former employer and was sued. He argued that the covenant was not valid. The court held:

Accepted Answer

A)  Suess was right, such covenants are void under federal law 
B)  in all states, such covenants violate public policy 
C)  such covenant are unconscionable in all states 
D)  the covenant is probably valid in states that allow them 
E)  the covenant was not backed up by consideration, so there was no contract to be violated 
A)  Suess was right, such covenants are void under federal law 
B)  in all states, such covenants violate public policy 
C)  such covenant are unconscionable in all states 
D)  the covenant is probably valid in states that allow them 
E)  the covenant was not backed up by consideration, so there was no contract to be violated

Question 13

A novation occurs when a third party comes forward to take over the duties of a party who has breached a contract.

Accepted Answer

A) True 
 B)False

Question 14

Fraud occurs when there is false material information passed to the party being induced to enter into a contract.

Accepted Answer

A) True 
 B)False

Question 15

To allow recovery and avoid injustice when a contract does not exist the courts may allow:

Accepted Answer

A)  restitution 
B)  voidable contract 
C)  mitigation 
D)  quantum meruit 
E)  none of the other choices 
A)  restitution 
B)  voidable contract 
C)  mitigation 
D)  quantum meruit 
E)  none of the other choices

Question 16

A counteroffer ____ the original offer.

Accepted Answer

A)  completes 
B)  terminates 
C)  enhances 
D)  improves 
E)  increases 
A)  completes 
B)  terminates 
C)  enhances 
D)  improves 
E)  increases

Question 17

A minor is someone who:

Accepted Answer

A)  is under the legal age of majority 
B)  is over the legal age of majority 
C)  is old enough to drive 
D)  is old enough to vote 
E)  does not earn any taxable income 
A)  is under the legal age of majority 
B)  is over the legal age of majority 
C)  is old enough to drive 
D)  is old enough to vote 
E)  does not earn any taxable income

Question 18

If you win a lot of money at a poker game, and the other players refuse to pay you, in many states you could not sue to collect your winnings.

Accepted Answer

A) True 
 B)False

Question 19

An accord is an agreement by parties to a contract to give and accept some performance different from that originally bargained for.

Accepted Answer

A) True 
 B)False

Question 20

Liquidated damages may be any amount, so long as both parties to a contract agree to the sum.

Accepted Answer

A) True 
 B)False

Exam 10: Contracts

Which of the following is a type of damage award that may be granted by a court as a remedy for breach of contract:

A court award of $1.00 in damages would be called:

____ punish the wrongdoer in a breach of contract case by allowing the plaintiff to receive relief beyond compensatory or expectancy damages because of a tort.

Under the doctrine of discharge by impossibility of performance, impossibility occurs when:

The basic elements of a contract are: offer, acceptance, consideration, lawful subject matter, and genuine consent.

An example of an equitable remedy is:

A contract formed by performance of actions requested by another party is:

The party claiming incapacity, or the lack of legal ability to create a contract:

If a house burns down before it sale is completed, the contract for sale is discharged by impossibility.

Which of the following is not a form of discharge by agreement:

Termination of the offer can occur through the action of the parties or by the operation of law. The parties can terminate the offer by:

Suess signed a contract which included a covenant not to compete with his employer for a year if he left the firm. When Suess quit, he went into competition with his former employer and was sued. He argued that the covenant was not valid. The court held:

A novation occurs when a third party comes forward to take over the duties of a party who has breached a contract.

Fraud occurs when there is false material information passed to the party being induced to enter into a contract.

To allow recovery and avoid injustice when a contract does not exist the courts may allow:

A counteroffer ____ the original offer.

A minor is someone who:

If you win a lot of money at a poker game, and the other players refuse to pay you, in many states you could not sue to collect your winnings.

An accord is an agreement by parties to a contract to give and accept some performance different from that originally bargained for.

Liquidated damages may be any amount, so long as both parties to a contract agree to the sum.

Todays Business Environment: Law and Ethics

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