Q&A Hero

Q: Mike contracts with Bob to purchase Bob's boat. Mike promises to pay Bob $5,000 upon delivery of the boat to Mike's beach house. Bob arrives at Mike's house without the boat, and demands full payment before the boat is to be delivered. Is Mike obligated to pay Bob the money? Why or why not?

Q: Richard contracts with Yuan to buy Yuan's house for $100,000 "unless my horse does not win the Kentucky Derby." This is a condition subsequent, or at least an attempted condition subsequent. Rephrase it as a condition precedent with the same effect. If you can do this, why does the law bother to distinguish conditions precedent from conditions subsequent?

Q: On October 31, a Congressional candidate orders a quantity of campaign literature from a local printer. The stated time of performance is November 2. November 8 is Election Day. The printer is not delivered until November 9. Thus, the candidate refuses to pay the printer one cent. Is this position justified? Why or why not? Assume that nothing was said in the contract about time being of the essence.

Q: Which of the following characterizes the statute of limitation? A. The time period fixed by the statute of limitations is uniform throughout the states. B. The recording of the contract stops the running of the statute of limitations. C. The time period fixed by the statute of limitations begins when the contract is recorded. D. The time period for oral contracts is different from that of written ones.

Q: Bing engaged Dill to perform personal services for $2,200 a month for a period of four months. The contract was entered into orally on July 1, 1984, and performance was to commence September 1, 1984. On August 10, Dill anticipatorily repudiated the contract. As a result, Bing: A. may not assign his rights to damages under the contract to a third party. B. can obtain specific performance. C. may not enforce the contract against Dill since the contract is oral. D. can immediately sue for a breach of contract.

Q: Stacey wanted someone to paint her house. Jessica offered to do it for $300 while Nancy offered to do it for $250. A few days after Stacey entered into a contract with Nancy, the latter increased her fees to $400. By this time, Jessica was not interested in entering into a contract with Stacey anymore. Stacey can seek to be compensated on the basis of a _____. A. quasi-contract B. part performance C. reliance interest D. compensatory damages

Q: Which of the following is the starting point in calculating the compensatory damages that the plaintiff had the right to expect? A. Loss in value of performance B. Loss in value of the contract C. Time taken for the performance D. Delay from the expected time of performance

Q: Where the parties to a contract wish to cancel their contract and be in the same position as they were prior to forming the contract, they should seek to obtain a(n) _____. A. rescission B. novation C. accord and satisfaction D. revocation

Q: Which form of damages involves a court ordering a party to a contract to perform his/her obligations under the contract? A. Quasi-contract B. Specific performance C. Rescission D. Promissory estoppel

Q: On May 2, 1972, Mix, CPA, entered into an oral contract with Dell to provide certain accounting services to Dell. The contract was fully performed by both parties in 1974. On April 25, 1988, Dell commenced a breach of contract action against Mix claiming that Mix had improperly performed the accounting services. Mix's best defense to the action would likely be: A. Parol evidence rule B. Statute of limitations C. Statute of frauds D. Lack of consideration

Q: Sklar, CPA, purchased from Wiz Corp. two computers. Sklar discovered material defects in the computers 10 months after taking delivery. Three years after discovering the defects, Sklar commenced an action for breach of warranty against Wiz. Wiz has raised the statute of limitations as a defense. The original contract between Wiz and Sklar contained a conspicuous clause providing that the statute of limitations for breach of warranty actions would be limited to 18 months. Under the circumstances, Sklar will: A. win because the action was commenced within the four-year period as measured from the date of delivery. B. win because the action was commenced within the four-year period as measured from the time he discovered the breach or should have discovered the breach. C. lose because the clause providing that the statute of limitations would be limited to 18 months is enforceable. D. lose because the statute of limitations is three years from the date of delivery with respect to written contracts.

Q: Price signed a contract to sell Wyatt a parcel of land for $90,000. The entire sales price was payable at the closing. Price has decided to keep the land. If Wyatt commences an action against Price, what relief is Wyatt most likely to receive? A. Specific performance B. Compensatory damages and specific performance C. Punitive damages D. Compensatory damages and punitive damages

Q: Damages that are agreed upon at the time the contract is entered into are called _____. A. compensatory damages B. consequential damages C. liquidated damages D. mitigation of damages

Q: Maria and Joe entered into a contract for the sale of Maria's car. Delivery of the car and payment were to be made on March 1. Joe clarified that he needed the car so that he can commute between San Francisco and Oakland to his new job that is starting on March 2. Maria broke the contract and failed to deliver the car on March 1. Joe needed a car to commute so he rented a car at $30 per day for 20 days, which was the reasonable amount of time it took him to locate and buy another car. Joe sued Maria for his losses, including the $600 car rental. The $600 makes up the _____ damages. A. liquidated B. consequential C. punitive D. specific performance

Q: Which form of damages can have the effect of reducing the liability of the party guilty of a breach of contract? A. Incidental damages B. Consequential damages C. Liquidated damages D. Mitigated damages

Q: The equitable remedy of specific performance is most likely to be awarded by a court in which of the following circumstances? A. Sale of a Da Vinci original where the seller refuses to deliver B. Sale of a perfume bottle which the seller refuses to deliver C. A promisee's failure to perform at a charity event D. A promisee's failure to deliver a contract of employment

Q: The legal remedy of _____ requires the defendant to pay the value of the benefits that the plaintiff has conferred on him. A. restitution B. waiver C. compensatory damages D. accord and satisfaction

Q: Someone who attempts to recover for breach of contract: A. can recover only for those losses that he can prove with reasonable certainty. B. can recover for all consequences of the breach, whether foreseeable or not. C. can only do so for consequential damages. D. has no duty to mitigate (or minimize) damages.

Q: Winston contracts to sell a plot of land called Blackacre to Paris for $500,000. Winston breaches the contract and Paris sues him. Blackacre's reasonable market value at the time of the breach was $525,000. Paris can recover: A. nothing, for he hasn't really suffered any harm. B. nothing, because specific performance is his only remedy here. C. only $25,000. D. the entire $500,000.

Q: Which form of damages is intended to give the victim of the breach of contract the "benefit of the bargain"? A. Compensatory B. Punitive C. Nominal D. Liquidated

Q: When a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on, both parties can use the remedy of: A. specific performance. B. accord and satisfaction. C. waiver. D. rescissions.

Q: The relinquishment of rights by a party in a contract is called a(n) _____. A. waiver B. recission C. impossibility D. reliance interest

Q: Which of the following circumstances is a valid reason for the delay of a lawsuit once the statutory period is over? A. Illegality of the contract B. Change of mind of the nonbreaching party C. Minority of the nonbreaching party D. Addition of a third party

Q: Which of the following instances is sufficient reason to cause commercial impracticability? A. Increased cost B. War C. Collapse of market D. Shortage of good

Q: Kyle promised to mow Heidi's lawn for $20 and clean Heidi's gutters for $50, but only mowed the lawn. Which of the following is true of Kyle? A. He is the nonbreaching party and can, therefore, sue Heidi. B. He cannot be sued by Heidi because he has performed one of the promises. C. He can recover the contract price for the activity he performed. D. He will be directed by the court to complete the entire contract for free.

Q: Which of the following allows a party who has materially breached a contract to recover the reasonable value of any benefits he has conferred on the promise? A. Quasi-contract B. Anticipatory repudiation C. Specific performance D. Accord and satisfaction

Q: What is a remedy for a party that is in material breach of a contract but has incurred economic harm by already performing substantially for the contract? A. Liquidated damages B. Quasi-contract C. Bilateral contract D. Incorporation

Q: When is a person's duty to perform discharged on grounds of impossibility? A. When a substitute is available B. When there is a delay in the delivery of goods C. In the presence of supervening illegality D. A promisee's dissatisfaction with the performance

Q: Adrienne had contracted to convey real estate to Rich. However Adrienne died before the conveyance is completed. What is the status of the parties? A. Adrienne is excused for nonperformance. B. Rich will be directed by the court to end the contract. C. Adrienne's performance was impossible. D. Rich can enforce the contract against Adrienne's estate.

Q: Mr. Green contracts with Mr. Brown to repair his roof. Mr. Brown is about 75% done when the deadline of the contract occurs. Which legal standard would prevent Mr. Brown from being considered to be in breach of his agreement with Mr. Green? A. Substantial performance standard B. Strict performance standard C. Reasonable person standard D. Egg shell person standard

Q: Nina has breached a contract between Milo and her, but not so materially. This means that Milo can: A. sue only for damages caused by the breach B. sue for damages for a total breach of the contract C. cancel the contract D. withhold his performance, even if the breach is remedied

Q: Which of the following is true of the materiality of breach? A. Courts generally adopt strict standards to determine materiality. B. The magnitude of the breach is of relatively less importance. C. There is a no concern about compensating the nonbreaching party. D. The timing of the breach is generally taken into consideration.

Q: Justin agrees to start a life-size portrait of Julia beginning 2nd November. On the 28th of October he writes to Julia that due to unforeseeable circumstances he would not be able to perform his promise, Justin has used the doctrine of: A. accord and satisfaction. B. anticipatory repudiation. C. specific performance. D. quasi-contract.

Q: Performance under a contract must be within a reasonable time when: A. the value of the contract is high. B. one of the parties is a government agency. C. a specific time is implied in the contract. D. no time for performance is expressly stated in the contract.

Q: Which of the following promises is subject to a "strict performance" standard? Assume that performance of the promise is not an express condition of the promisee's duty to perform. A. A promise to build a road B. A promise to paint a house C. A promise to destroy a building D. A promise to deliver a deed

Q: What is the law's main purpose in imposing the implied covenant of good faith and fair dealing? A. Providing adequate remedial measures to injured parties B. Punishing the breaching parties in a contract C. Encouraging litigation regarding breach of contracts D. Encouraging ethical behaviour in contracts

Q: Which of the following is subject to a "substantial performance" standard in the absence of an express condition? A. A promise to pay money B. A promise to deliver a deed C. A promise to build a house D. A promise to deliver some goods

Q: For which of the following contracts, is a party's subjective dissatisfaction sufficient to excuse his performance under a "personal satisfaction" clause in a contract? A. A contract to construct an intercontinental ballistic missile B. A contract to paint someone's portrait C. A contract to build a steam boiler D. A contract to rebuild an automobile engine

Q: When a person whose duty is conditional leads the other party to rely on his noninsistence on the condition, the condition will be excused because of a(n) _____. A. waiver B. estoppel C. recission D. liability

Q: What is the term for a condition that is specified in the contract? A. Express condition B. Implied condition C. Corporate condition D. Bilateral condition

Q: What is the term for a condition that is not stated in the contract but is construed by the action of the parties? A. Express condition B. Implied-in-fact condition C. Corporate condition D. Bilateral condition

Q: Damages associated with the real harm that a plaintiff in a contract case suffered is referred to as punitive damages.

Q: An uncertain future event, the occurrence of which is necessary for the existence of a contractual obligation is called: A. a condition precedent B. a condition subsequent C. a concurrent condition D. a constructive condition

Q: Which of the following is a condition subsequent? A. "I promise to do X if I succeed in getting a loan." B. "I promise to do X on the condition that the Cubs win the World Series." C. "I promise to do X unless Al Gore is elected President in 2000." D. "I promise to do X assuming that inflation stays below 3% in 1997."

Q: Which of the following is also known as an implied-in-law condition since they are imposed by law rather than by agreement of the parties? A. Condition precedent B. Express condition C. Constructive condition D. Subsequent condition

Q: Roe promises to build a house for Crown for which, Crown agrees to pay him $10,000 when the house is complete. This example is related to the concept of: A. express condition. B. constructive condition. C. subsequent condition. D. implied condition.

Q: Ms. White is contracted by Mr. Green to make her "world famous" apple pies. Ms. White has an accident, falls into a coma and the pies are not delivered to Mr. Green by the time stated in the contract. Ms. White will be considered in breach of her contract to Mr. Green.

Q: In general, an employee who has been fired and who wants to sue for breach of contract need not do anything to limit or mitigate his damages, such as looking for another job. This would unfairly benefit an employer who has wrongfully breached a contract.

Q: Arthur and Brian have entered into a contract with an enforceable liquidated damages provision that states that Ben's recovery will be $10,000 in the event of Arthur's breach. Arthur breaches the contract. Ben loses $50,000 in consequential damages as a result. Ben's recovery is limited to $10,000.

Q: Specific performance is almost never awarded in contracts for the sale of land.

Q: In the eyes of law, breach of any contract is of equal seriousness.

Q: Andy contracts with Yvonne to produce an advertisement for a Fourth-of-July fundraising party. Yvonne does not produce the advertisement until July 6. Here, Yvonne's breach of the contract is not a material breach unless the contract explicitly stated that time is of the essence.

Q: If there is no time specified in contract by the parties, then it is presumed that performance shall be completed whenever possible.

Q: Bill contracts to build a building for Harvey. A few changes in the building code that were made after the contract was signed will increase Bill's costs in performing his duties. He is excused from performance under the contract.

Q: Mr. Green contracts to repair his roof with Mr. Brown. Prior to the work starting a tornado destroys Mr. Green's home. Mr. Brown fails to perform the duty on the contract, but the court will not consider Mr. Brown in breach due to impossibility.

Q: When a promisor's performance is an express condition of the promisee's duty to perform, that performance must meet a strict performance standard.

Q: An accountant who substantially performs her duties to her client triggers the client's duty to pay the contract price, less any damages resulting from defects in her performance.

Q: The substantial performance standard is more lenient than the strict performance standard of judicial contract legal interpretation.

Q: There cannot be subjective standards of personal taste and comfort when determining a promisee's performance.

Q: In a contract for Adam to sell Carrie a steam boiler, Carrie's obligation to pay is conditioned upon her personal satisfaction with the boiler. Even though the boiler meets every mechanical test imaginable, Carrie refuses to pay because she just doesn't like the boiler for some reason. She is not obligated to pay, because the contract said that he must be personally satisfied, and a contract is a contract.

Q: The term condition means an event that may affect a party's duty to perform under a contract.

Q: There is prescribed formal language that must be used to create an express condition as part of a contract.

Q: When a person owes an unconditional duty to another, then he/she must perform it unless the performance is excused.

Q: Pat promises to install granite countertops in the home at 123 Main Street that Bruce is purchasing "provided that the escrow on the sale of 123 Main Street closes." The close of escrow on the sale of 123 Main Street is a condition precedent to Pat's promise.

Q: A condition subsequent cannot be a valid reason for the discharge of a duty.

Q: If Grant promises to sell his regular season football tickets to Carson on condition that Indiana University wins the Rose Bowl, Indiana's winning the Rose Bowl is an express condition of Grant's duty to sell the tickets.

Q: Barry and Andrew contract for the sale of 100 widgets (goods) from Barry to Andrew for $1,000. The contract contains a clause prohibiting assignment of "the contract." Nonetheless, Andrew assigns "the contract" to Smith. Is there a valid assignment of contract rights here? Is there a delegation of duties?

Q: Why is it important for an assignee to immediately notify the obligor of the assignment?

Q: Amelia contracts to have her portrait painted by Hamilton for $10,000. Hamilton assigns the contract to Drew, another artist. Has there been a valid delegation of duties here? Why or why not?

Q: The Mandarin City contracts with the Zoid Construction Company to construct a new sewer system for the city. Later, Zoid breaches the contract. George, a resident of the city, sues Zoid for its breach of contract. Can George recover? Why or why not?

Q: What is the purpose of vesting?

Q: Union Bank lent $200,000 to Wagner. Union required Wagner to obtain a life insurance policy naming Union as beneficiary. While the loan was outstanding, Wagner stopped paying the premiums on the policy. Union paid the premiums, adding the amounts paid to Wagner's loan. Wagner died and the insurance company refused to pay the policy proceeds to Union. Union may: A. recover the policy proceeds because it is a creditor beneficiary. B. recover the policy proceeds because it is an incidental beneficiary. C. not recover the policy proceeds because it is not in privity of contract with the insurance company. D. not recover the policy proceeds because one cannot claim insurance for oneself.

Q: Martha purchases a book from Just Books on credit and later sells the book to her friend, Christina. Christina in turn sells the book to David, who agrees to pay the balance to Just Books. Who is the creditor beneficiary in this exchange? A. Martha B. Christina C. David D. Just Books

Q: Courts have held that a beneficiary's rights cannot be lost by modification or discharge. This is known as: A. assignment. B. dissociation. C. malfeasance. D. vesting.

Q: Mr. Green contracts with Mr. Brown for $500 to landscape the home of Roy who is Mr. Green's son. What is Roy's status in the contract with Mr. Green and Mr. Brown? A. Donee beneficiary B. Incidental beneficiary C. Corporate beneficiary D. International beneficiary

Q: Stella buys a car from Marble Sales for $10,000 on credit. Joel's daughter likes the car and so Joel buys the car from Stella. Joel also agrees to pay the balance due to Marble Sales, on behalf of Stella. Joel defaults. Marble Sales can bring a suit for breach of contract against: A. Stella only. B. Joel only. C. Stella and Joel. D. Joel and his daughter.

Q: As a general rule, members of the public are held to be _____ of contracts entered into by their municipalities or other governmental units in the regular course of carrying on governmental functions. A. promisees B. incidental beneficiaries C. donee beneficiaries D. creditor beneficiaries

Q: Jada owned an insurance policy in her life, on which she paid all the premiums. Shaun was named the beneficiary. Jada died and the insurance company refused to pay the insurance proceeds to Shaun. An action by Shaun against the insurance company for the insurance proceeds will be: A. successful because Shaun is a third-party donee beneficiary. B. successful because Shaun is a proper assignee of Jada's rights. C. unsuccessful because Shaun is not the owner of the policy. D. unsuccessful because Shaun did not pay any of the premiums.

Q: Rice contracted with Locke to build an oil refinery for Locke. The contract provided that Rice was to use United Pipe Fittings. Rice did not do so. United learned of the contract and, anticipating the order, manufactured additional fittings. United sued Locke and Rice. United is: A. entitled to recover from Rice only, because Rice breached the contract. B. entitled to recover from either Locke or Rice because it detrimentally relied on the contract. C. not entitled to recover because it is a donee beneficiary. D. not entitled to recover because it is an incidental beneficiary.

Q: For a third person to have the right to enforce a contract, he/she must necessarily prove that: A. he/she was the party to the contract. B. he/she had been given a promise. C. the contract was made to benefit him. D. the contract provides him/her incidental benefit.