Question 1

Adrian operates a recycled metals business and contracts to provide ten tons of scrap steel at $500 per ton to be delivered to Build-It-Rite Materials, Inc., in seven months. An un?fore?seen shortage of scrap steel suddenly develops, making it impossible for Adrian to fulfill the contract for less than $5,000 per ton. Adrian's best de?fense against performing the contract would be that

Accepted Answer

A)   performance of the contract is commercially impracticable.
B)   procuring the steel would force the seller into bankruptcy.
C)   the law has rendered performance of the contract illegal.
D)   the specific subject matter of the contract has been destroyed. A

Question 2

The most common way to discharge one's contractual duties is by breach of contract.

Accepted Answer

A) True 
 B)False  False

Question 3

Dharma enters into a contract to manage the operations of Esther's dental office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be

Accepted Answer

A)   canceled.
B)   breached.
C)   altered.
D)   performed. D

Question 4

Lana agrees to work as Michelle's personal assistant for one year but dies in the ninth month of the contract. Lana's estate

Accepted Answer

A)   is discharged from any contractual liability.
B)   must find a competent assistant to fulfill the contract.
C)   must pay damages.
D)   must refund any money paid to Lana on the contract.

Question 5

A contract will be discharged if supervening circumstances make it impossible to attain the purpose both parties had in mind when they made the contract.

Accepted Answer

A) True 
 B)False

Question 6

Drainage & Irrigation Equipment, Inc., contracts to sell its assets to Earth & Sky Aquatic Corpo?ration. Before either party has performed, rescission of this con?tract requires

Accepted Answer

A)   a mutual agreement to rescind.
B)   an accord and satisfaction.
C)   a novation.
D)   a settlement agreement.

Question 7

To rescind a contract, the parties must make a second agreement that satisfies the legal requirements for a contract.

Accepted Answer

A) True 
 B)False

Question 8

A condition that must be fulfilled before a party's performance can be required is a condition subsequent.

Accepted Answer

A) True 
 B)False

Question 9

Restoration, Inc., contracts to repair a crack in a supporting beam for Stagecraft Theater for $10,000. If Restoration does not per?form, Stagecraft must pay

Accepted Answer

A)   $10,000.
B)   $5,000.
C)   $1,000.
D)   $0.

Question 10

Nina contracts with Office Suites Corporation to buy a suite in its Prospect Point Tower at a premium for its view of Quay Harbor. Unforeseeably, the town of Quay Harbor changes its zoning law, and Resort Hotels, Inc., constructs Seaview Resort, blocking what would have been Nina's view. Nina's best argument for a change in the Office Suites contract or its price is

Accepted Answer

A)   frustration of purpose.
B)   objective impossibility of performance.
C)   anticipatory repudiation.
D)   commercial impracticability.

Question 11

When a party's performance is perfect, it is said to be complete.

Accepted Answer

A) True 
 B)False

Question 12

Any breach entitles the nonbreaching party to sue for damages.

Accepted Answer

A) True 
 B)False

Question 13

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.

Accepted Answer

A) True 
 B)False

Question 14

A contractual obligation may not be discharged through novation.

Accepted Answer

A) True 
 B)False

Question 15

After a contract is made, a supervening event may make performance impossible in an objective sense.

Accepted Answer

A) True 
 B)False

Question 16

Fact Pattern 18-B1 (Questions B9-B10 apply)
Moses sells an apartment building to Noelle with a promise to install a new heating and air conditioning system , before September 1. The following February 1, Moses sends Ollie, an HVAC technician, to begin the installation. Noelle orders Ollie to leave and refuses to make further payments to Moses, who files a suit against Noelle.
-Refer to Fact Pattern 18-B1. Noelle's refusal to make further payments is most likely

Accepted Answer

A)   a material breach.
B)   complete performance.
C)   excused by Moses's failure to timely install the ventilation system.
D)   substantial, but not complete, performance.

Question 17

Herb's Hot Dog Vending, Inc., enters into a contract to pay Idris for a business survey and review of Herb's competitors, which Idris delivers on August 1. Herb's offer, on the same date, to pay Idris is

Accepted Answer

A)   a concurrent condition.
B)   a novation.
C)   tender.
D)   mutual rescission.

Question 18

Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged when Kali and Leony

Accepted Answer

A)   agree to sign a bill of sale.
B)   exchange the car for the $3,000.
C)   sign a receipt.
D)   shake hands and go their separate ways.

Question 19

Fact Pattern 18-B1 (Questions B9-B10 apply)
Moses sells an apartment building to Noelle with a promise to install a new heating and air conditioning system , before September 1. The following February 1, Moses sends Ollie, an HVAC technician, to begin the installation. Noelle orders Ollie to leave and refuses to make further payments to Moses, who files a suit against Noelle.
-Refer to Fact Pattern 18-B1. Moses's late attempt to install the ventilation system is most likely

Accepted Answer

A)   a material breach.
B)   complete performance.
C)   excused by Noelle's refusal to make further payments.
D)   substantial, but not complete, performance.

Question 20

Ed's Electric substantially performs its contract with Forest Hills Apartments, Inc., to deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to

Accepted Answer

A)   damages.
B)   nothing more.
C)   to be excused from performance.
D)   suspend performance.

Exam 18: Performance and Discharge in Traditional E-Contracts

The most common way to discharge one's contractual duties is by breach of contract.

Dharma enters into a contract to manage the operations of Esther's dental office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be

Lana agrees to work as Michelle's personal assistant for one year but dies in the ninth month of the contract. Lana's estate

A contract will be discharged if supervening circumstances make it impossible to attain the purpose both parties had in mind when they made the contract.

Drainage & Irrigation Equipment, Inc., contracts to sell its assets to Earth & Sky Aquatic Corpo?ration. Before either party has performed, rescission of this con?tract requires

To rescind a contract, the parties must make a second agreement that satisfies the legal requirements for a contract.

A condition that must be fulfilled before a party's performance can be required is a condition subsequent.

Restoration, Inc., contracts to repair a crack in a supporting beam for Stagecraft Theater for $10,000. If Restoration does not per?form, Stagecraft must pay

When a party's performance is perfect, it is said to be complete.

Any breach entitles the nonbreaching party to sue for damages.

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.

A contractual obligation may not be discharged through novation.

After a contract is made, a supervening event may make performance impossible in an objective sense.

Herb's Hot Dog Vending, Inc., enters into a contract to pay Idris for a business survey and review of Herb's competitors, which Idris delivers on August 1. Herb's offer, on the same date, to pay Idris is

Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged when Kali and Leony

Ed's Electric substantially performs its contract with Forest Hills Apartments, Inc., to deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to