Question 1

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

Accepted Answer

A) the existence of a previous,valid obligation. 
B) consideration greater than $5,000. 
C) performance of the original contract by all of the parties. 
D) an accord and satisfaction. 
A) the existence of a previous,valid obligation. 
B) consideration greater than $5,000. 
C) performance of the original contract by all of the parties. 
D) an accord and satisfaction.

Question 2

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

A) discharged. 
B) completely enforceable. 
C) enforceable only to the extent of finding an alterna-tive supply. 
D) enforceable only to the extent of transferring to the next year's crop. 
A) discharged. 
B) completely enforceable. 
C) enforceable only to the extent of finding an alterna-tive supply. 
D) enforceable only to the extent of transferring to the next year's crop.

Question 3

A novation occurs when there is a substitution,by agreement,of a new contract for an old one,with the rights under the old one being terminated.

Accepted Answer

A) True 
 B)False

Question 4

Only personal contracts can be discharged by agreement of the parties.

Accepted Answer

A) True 
 B)False

Question 5

As long as a contract is personal in nature,all rights under the contract can be assigned.

Accepted Answer

A) True 
 B)False

Question 6

Stephanie's sale of rights she has under a contract with Runway Retail,Inc.,to buy the retailer's clothing overstock is

Accepted Answer

A) a delegation. 
B) an assignment. 
C) a third party beneficiary contract. 
D) none of the choices. 
A) a delegation. 
B) an assignment. 
C) a third party beneficiary contract. 
D) none of the choices.

Question 7

Performance can be accomplished by tender.

Accepted Answer

A) True 
 B)False

Question 8

Valley View Farms enters into a contract to sell Sarah's Corner Shop a truckload of eggs from free range chickens.Valley View then fails to deliver the eggs to Sarah's Corner Shop.Sarah

Accepted Answer

A) must still pay for the eggs or she will be in breach of contract. 
B) does not have to pay for the eggs because Valley View failed to perform. 
C) must still pay for the eggs,but can file suit against Valley View for breach of contract. 
D) does not have to pay for the eggs,but cannot file suit against Valley View for breach of contract. 
A) must still pay for the eggs or she will be in breach of contract. 
B) does not have to pay for the eggs because Valley View failed to perform. 
C) must still pay for the eggs,but can file suit against Valley View for breach of contract. 
D) does not have to pay for the eggs,but cannot file suit against Valley View for breach of contract.

Question 9

A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.

Accepted Answer

A) True 
 B)False

Question 10

Marco and Fred enter into a contract for the sale of Marco's apartment for which Fred agrees to pay him $100,000.Marco cannot prohibit Fred from transfering his right to the ownership of the apartment because such a prohibition is

Accepted Answer

A) against public policy. 
B) immoral. 
C) unconscionable. 
D) a crime. 
A) against public policy. 
B) immoral. 
C) unconscionable. 
D) a crime.

Question 11

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

A) neither the accord nor the contract. 
B) the accord only. 
C) the accord or the contract. 
D) the contract only. 
A) neither the accord nor the contract. 
B) the accord only. 
C) the accord or the contract. 
D) the contract only.

Question 12

Phillip assigns his rights under a contract with Maria to his college roommate,John.Neither Phillip nor John notifies Maria of the assignment.The assignment

Accepted Answer

A) will not be effective until notice is given to Maria. 
B) will become effective after thirty days even if no notice is given to Maria. 
C) is immediately effective. 
D) can be circumvented. 
A) will not be effective until notice is given to Maria. 
B) will become effective after thirty days even if no notice is given to Maria. 
C) is immediately effective. 
D) can be circumvented.

Question 13

A contract between Slim and Goldie may not be assigned if it

Accepted Answer

A) does not expressly permit assignment. 
B) involves a sale of goods. 
C) involves personal services. 
D) is oral. 
A) does not expressly permit assignment. 
B) involves a sale of goods. 
C) involves personal services. 
D) is oral.

Question 14

Performance that provides a party with most of the benefits of a con-tract,in spite of a deviation from the terms,is substantial performance.

Accepted Answer

A) True 
 B)False

Question 15

All that a delegator needs to do to make a delegation effective is to express an intention to make the delegation.

Accepted Answer

A) True 
 B)False

Question 16

Kathleen offers to buy Richard's prize stallion for $10,000 only if a licensed veterinarian certifies that the horse is sound for breeding.After inspecting the stallion,the veterinarian concludes that the stallion is sterile and thus not fit for breeding.Kathleen

Accepted Answer

A) must still buy the stallion. 
B) does not have to buy the stallion. 
C) must still buy the stallion,but may pay a lower price. 
D) does not have to buy the stallion,but must buy another horse of similar value from Richard. 
A) must still buy the stallion. 
B) does not have to buy the stallion. 
C) must still buy the stallion,but may pay a lower price. 
D) does not have to buy the stallion,but must buy another horse of similar value from Richard.

Question 17

If one party's performance is substantial,the other party's duty to perform remains absolute.

Accepted Answer

A) True 
 B)False

Question 18

Richly Merchandise,Inc.,contracts with Stand-Rite Contractors to build a store.Stand-Rite assigns the contract to Town Builders,which has a poor record of completing projects.Richly could most successfully argue that the con-tract cannot be assigned because

Accepted Answer

A) Richly did not consent to the assignment. 
B) Richly did not receive adequate consideration for the assignment. 
C) the assignment will materially increase the risk of nonperformance. 
D) Town Builders was not an original party to the deal. 
A) Richly did not consent to the assignment. 
B) Richly did not receive adequate consideration for the assignment. 
C) the assignment will materially increase the risk of nonperformance. 
D) Town Builders was not an original party to the deal.

Question 19

Jen agrees to buy Kev's Dirt Bike business on the express condition that Valley Credit Union approves the financing.This approval is

Accepted Answer

A) a concurrent condition. 
B) a condition precedent. 
C) a condition subsequent. 
D) an implied condition. 
A) a concurrent condition. 
B) a condition precedent. 
C) a condition subsequent. 
D) an implied condition.

Question 20

A novation requires the existence of a previous,valid obligation.

Accepted Answer

A) True 
 B)False

Exam 12: Third Party Rights and Discharge

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

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

A novation occurs when there is a substitution,by agreement,of a new contract for an old one,with the rights under the old one being terminated.

Only personal contracts can be discharged by agreement of the parties.

As long as a contract is personal in nature,all rights under the contract can be assigned.

Stephanie's sale of rights she has under a contract with Runway Retail,Inc.,to buy the retailer's clothing overstock is

Performance can be accomplished by tender.

Valley View Farms enters into a contract to sell Sarah's Corner Shop a truckload of eggs from free range chickens.Valley View then fails to deliver the eggs to Sarah's Corner Shop.Sarah

A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.

Marco and Fred enter into a contract for the sale of Marco's apartment for which Fred agrees to pay him $100,000.Marco cannot prohibit Fred from transfering his right to the ownership of the apartment because such a prohibition is

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

Phillip assigns his rights under a contract with Maria to his college roommate,John.Neither Phillip nor John notifies Maria of the assignment.The assignment

A contract between Slim and Goldie may not be assigned if it

Performance that provides a party with most of the benefits of a con-tract,in spite of a deviation from the terms,is substantial performance.

All that a delegator needs to do to make a delegation effective is to express an intention to make the delegation.

Kathleen offers to buy Richard's prize stallion for $10,000 only if a licensed veterinarian certifies that the horse is sound for breeding.After inspecting the stallion,the veterinarian concludes that the stallion is sterile and thus not fit for breeding.Kathleen

If one party's performance is substantial,the other party's duty to perform remains absolute.

Richly Merchandise,Inc.,contracts with Stand-Rite Contractors to build a store.Stand-Rite assigns the contract to Town Builders,which has a poor record of completing projects.Richly could most successfully argue that the con-tract cannot be assigned because

Jen agrees to buy Kev's Dirt Bike business on the express condition that Valley Credit Union approves the financing.This approval is

A novation requires the existence of a previous,valid obligation.

The Legal and Constitutional Environment of Business

Courts and Alternative Dispute Resolution

Ethics and Business Decision Making

Tort Law

Intellectual Property

Internet Law,social Media,and Privacy

Criminal Law and Cyber Crime

Nature and Classification

Agreement in Traditional and E-Contracts

Consideration, capacity, and Legality

Defenses to Contract Enforceability

Breach and Remedies

The Formation of Sales and Lease Contracts

Performance and Breach of Sales and Lease Contracts

Warranties and Product Liability

Negotiability, transferability, and Liability

Checks and Banking in the Digital Age

Secured Transactions

Creditors Rights and Bankruptcy

Agency Relationships

Employment Law

Sole Proprietorships, partnerships, and Limited Liability Companies

Corporate Formation, financing, and Termination

Corporate Directors, officers, and Shareholders

Investor Protection, insider Trading, and Corporate Governance

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Insurance, wills, and Trusts

Liability of Accountants and Other Professionals

International Law in a Global Economy

Filters