Q&A Hero

Q: Which of the following may require specific performance? A. Sale of a real estate (a house or tract of land). B. Sale of a very expensive personal property (a car or big-screen TV). C. Personal service. D. Anything that may cause irreparable injury.

Q: Martha entered into a contract with Terry, an art dealer. According to the contract Terry was to supply 18th century artifacts to Martha for the play she was directing. Martha was paying $50,000 for this. Another director needed the same wigs and was ready to pay $60,000. Terry decided not to sell the artifacts to Martha. In this case, the court may order Terry to: A. specifically perform the contract. B. repudiate the contract. C. pay nominal damages. D. substantially perform the contract.

Q: An employee with special skills who has agreed not to work for a competitor may be enjoined from breaching his or her contract and working for that competitor by: A. a mandatory injunction. B. liquidated damage provisions. C. a prohibitory injunction. D. nominal damage provisions.

Q: A liquidated damages provision will be enforced only when: A. the subject matter of the contract has a value which cannot be put in monetary terms. B. the amount specified is reasonable and actual damages would be difficult to determine. C. the nature of the contract is such that damages would not be difficult to determine. D. the amount agreed on is not the injured party's only remedy.

Q: An award for a purely technical breach of contract (usually $1.00) is: A. nominal. B. punitive. C. liquidated. D. compensatory.

Q: Ronny hires a car from Greens Transport with global positioning system (GPS) for his holiday in Las Vegas. The rent for the car was $175 a day and was hired for 7 days. The contract did not state anything regarding speed. At times Ronny drove at a high speed of which the GPS kept a record and Greens imposed damages worth $4000 for the wear and tear caused due to high speed. What kind of damage is this? A. Compensatory damages. B. Penalty damages. C. Liquidated damages. D. Punitive damages.

Q: The duty to mitigate damages: A. is a non-equitable doctrine frowned upon by modern courts. B. requires the non-breaching party to take steps only in case of physical injuries. C. holds the non-breaching party liable to a minimal amount. D. requires the non-breaching party to take steps to minimize the damage.

Q: Punitive damages: A. are usually unavailable. They are sometimes awarded for bad faith breach. B. are so called because they are small in amount, not more than $10.00. C. usually punish and are frequently available as a performance remedy. D. are so called because they are small in amount and are usually specified in the contract.

Q: Consequential damages: A. occur when the special circumstances of the plaintiff cause him to suffer losses that would not ordinarily be foreseeable as a result of breach. B. are usually recoverable unless the defendant had reason to foresee them at the time the contract was created. C. are measured by the loss in value of the promised performance. D. are not limited to losses that would occur as a result of breach of contract.

Q: An award for loss in value of a promised performance is: A. nominal. B. punitive. C. liquidated. D. compensatory.

Q: Adam contracts to sell Ben 100 widgets for $100 for use in Ben's factory. Adam does not know that Ben's factory is closed as it is waiting for supply of widgets from Adam. Will Adam be liable for the damages caused due to late delivery? A. Will be liable for compensatory damages. B. Will be liable for consequential damages. C. Will not be liable for any damages. D. Will be liable for nominal damages.

Q: Rebecca contracted Matthew Properties to repair her apartment for $20,000. Matthew Properties repaired the apartment and handed it over to her. She saw that the garages and the attic had not been properly worked upon. She filed a suit against them but the court said that Matthew Properties had been discharged from obligations by a(n): A. statute of limitations. B. waiver. C. occurrence of condition subsequent. D. altercation.

Q: The time limit set by the UCC statute of limitations for contracts involving the sale of goods is: A. four years. B. five years. C. ten years. D. twenty years.

Q: Which of the following statements is not true about discharge by alteration? A. If the parties' agreement is represented by a written instrument, a material, intentional alteration of the instrument by one of the parties discharges the other party. B. If a party consents to an alteration or does not object to it after learning of it, even then he or she will be discharged. C. Alterations by third parties without the knowledge or consent of either contracting party will affect the parties' rights. D. Since contracts are created by mutual agreement, they are not allowed to be altered by either of the parties.

Q: Farmer Logan had agreed to supply maize to Roxy Inc. There was a terrible winter in his state which destroyed his crop and later he fell sick and ultimately died. Farmer Logan can be excused for nonperformance on grounds of: A. commercial impracticability. B. illness or death of the promisor. C. nonoccurrence of condition subsequent. D. destruction of subject matter.

Q: Which of the following statements is true? A. Personal service contracts, like all contracts, terminate with the promisor's death. B. Personal service contracts are the only contracts which terminate with the promisor's death. C. Personal service contracts are the only contracts which cannot terminate with the promisor's death. D. Personal service contracts can terminate under any circumstance.

Q: In which of the following situations can a party's duty to perform be discharged? A. Statutes and legislation that make a performance more difficult. B. When something that is essential to the promisor's performance is destroyed through no fault of the promisor but its substitute is available. C. When events occur after the formation of the contract that would make the return performance of the other party worthless to the promisor. D. When the promisor impliedly assumed the risk that the event would occur.

Q: "Frustration of venture": A. is the same as "commercial frustration." B. is the same the same as "commercial impracticability." C. occurs when the return performance becomes worthless for the promisee. D. occurs when the promisor expressly assumes the risk that the event occurred.

Q: In which of the following situation a party's duty to perform cannot be discharged? A. The nonoccurrence of a condition subsequent B. The nonoccurrence of a condition precedent C. Anticipatory breach D. Material breach

Q: Conditions in contracts: A. must be created in writing to be binding. B. can be created only by the use of special words. C. can be implied. D. must always occur concurrently.

Q: Metz and Desman contracted for Metz to build a house for Desman on Desman's lot according to specifications provided by Desman. The contract provided that Metz would be paid $125,000 for this. Metz unintentionally deviated from the specifications in several minor respects. The house is soundly constructed and Metz completed the work within the promised time. Desman refused to pay Metz any of the $125,000, arguing that the house did not conform to the specifications. In this case: A. Desman can get a decree of specific performance. B. Metz has no right to be paid for any of his work because he breached the contract. C. if the court finds that Metz has substantially performed, he will be able to recover the contract price less any damages caused by his failure to perform as promised. D. if the court finds that he substantially performed, Metz will be able to recover the contract price less any damages caused to him because of the delay in payment.

Q: Which of the following is true of "anticipatory repudiation"? A. It occurs if promisors, prior to the time for performance, indicate an intent not to perform their duties under the contract. B. Its indication can arise only from implicit actions and the other party can sue after two weeks for breach of contract. C. It occurs when the promisee's performance fails to reach the degree of perfection the other party is justified in expecting under the circumstances. D. Its indication can arise only in the form of an express statement by the promisor and the other party can sue for the breach immediately.

Q: Which of the following is true about building and construction contracts? A. The promisee who is dissatisfied with the mechanical fitness, utility, or marketability may reject the performance without liability, even if doing so is unreasonable. B. The engineer's or architects certificates, which are often issued at each stage of completion, indicate that the work is done to the satisfaction of the architect or engineer. C. These contracts require the builder to give the owner an engineer's certificate for satisfactory performance after the owner has paid the builder for the project. D. In contracts involving matters of personal taste and comfort most courts require the promisee to accept performance that would satisfy a reasonable person.

Q: Kids Corner ordered for a supply of stuffed toys looking like Santa Claus from Toyland Inc. The toys were to be supplied by 1st of December but were sent to Kids Corner on 25th of December. There has been a _____ of contract. A. compensatory breach B. anticipatory breach C. material breach D. non-occurrence of concurrent condition

Q: The plaintiff in a contract action has no duty to mitigate his damages because he is the injured party.

Q: Tony contracted to buy wheat from farmer Brown. It was contracted that Tony would pay farmer Brown, three days after the delivery of the wheat. Brown's delivery would be a _____ of Tony's duty to pay. A. constructive condition B. condition subsequent C. constructive concurrent condition D. constructive condition precedent

Q: Tim and Sam entered into a bilateral contract that does not state a time for performance. In this case the law infers that each party's performance is a: A. condition subsequent. B. constructive concurrent condition of the other party's duty to perform. C. constructive condition precedent of the other party's duty to perform. D. condition concurrent.

Q: Normally, both parties to a contract are discharged when they have completely performed their contractual duties.

Q: Punitive damages are recoverable for breach of contract.

Q: If time is not of the essence of a contract, the promisee must accept late performance rendered within a reasonable time of when performance was due.

Q: Rob contracted to play football for the United Lions in May 2007. However, he had an accident and he died. His death will terminate his contract.

Q: The destruction of items that the promisor intended to use in performing would not excuse nonperformance if it just made performance more difficult for the promisor.

Q: Emma had contracted with Queen Arts to perform a ballet. A day before the program there was a fire and the dance floor was burnt and Emma could not perform. Since Emma cannot perform her contractual duties, she is liable for material breach.

Q: Contracts can be created by mutual agreement, but cannot be discharged by mutual agreement.

Q: Rob's construction firm did not give Casey a certificate issued by Timothy Engineering Firm indicating that the work has been done to satisfaction. Casey has no duty to pay Rob's firm.

Q: Promisors in complete performance contracts who do not completely perform can always recover the contract price.

Q: The doctrine of substantial performance applies when a promisor willfully fails to completely perform.

Q: A building that deviates slightly from the contract's specifications would not qualify as substantial performance.

Q: A promisor who is guilty of material breach has no right of action under the contract.

Q: Anticipatory repudiation may never be implied.

Q: Who is a creditor beneficiary? Can he/she enforce the contract?

Q: An underground water main burst in Manhattan and flooded the building where the Acme electric company has an electricity supply substation. A fire resulted and disrupted electric power for four days. This occurred during the biannual "Buyers Week" when merchandisers from around the world were in town to visit fashion showrooms and place orders for future seasons. Some 200 merchandisers brought suit against Acme. Some of the businesses had no direct contractual relationship with Acme. They argued that their lease agreements with their landlords, who were the direct contracting entities with Acme, obligated them to pay a share of the electricity expenses and therefore they could sue under the contracts between the landlords and Acme. Are they correct?

Q: If an event must occur before a party's duty to perform arises, it is called a condition precedent.

Q: Explain what types of contracts are assignable and name the types of contracts that are not assignable.

Q: What is an implied guarantee?

Q: Ford owned an apartment complex and was converting the complex to a cooperative by selling individual units. Each purchaser was required to pay Ford an extra $30 per month for utilities, taxes, and insurance. Ford sold all his rights in the complex to Roberts and assigned the purchasers' contracts to him. Roberts failed to pay the applicable property tax, and Crowe, a purchasing tenant, sued him to compel payment of the tax. Roberts argued that in purchasing Ford's interest, all he bought was the right to collect the payments made by tenants and that he assumed no duties. Is Roberts liable for the property tax?

Q: The municipality of College Town enters into a contract with Streetz to have the town's roads repaired. Katie is a resident of College Town and is considered a(n): A. donee beneficiary. B. incidental beneficiary. C. implied beneficiary. D. creditor beneficiary.

Q: X, a builder, contracts with the city of Y to build a new convention center. Z, a hotel owner, stands to benefit once the convention center is built, so Z is angry when X backs out of the contract. Z wants to sue X. Can Z sue X? A. Z is a creditor beneficiary and can sue X. B. Z is a donee beneficiary and can sue X. C. Z can sue X because Z is a citizen of Y, with whom X contracted. D. Z is an incidental beneficiary and cannot sue X.

Q: GP had been contracted by the city of Kingston to install a monitoring system at all public places. This was to be done in two phases and the city had the right to terminate the contract. GP had plans to use a subcontractor, Rex, whom they usually hired for the last phases of projects executed by them. After two weeks of the work, the city of Kingston found that things were not going properly and terminated GP's contract. Can Rex sue the city of Kingston? A. Yes, because Rex is a third-party donee beneficiary. B. No, because Rex is only an incidental beneficiary. C. Yes, because Rex is involved in a novation. D. No, because donee beneficiaries cannot enforce a contract.

Q: If the promisor's performance will satisfy a legal duty that the promisee owes a third party, the third party is a(n): A. donee beneficiary. B. incidental beneficiary. C. creditor beneficiary. D. implied beneficiary.

Q: An incidental beneficiary can: A. sue for nonperformance. B. acquire rights under the contract. C. enforce the contract. D. be a member of the general public.

Q: In the will, Lydia's mother has named Lydia as the owner of her farm and named her as a beneficiary in her insurance policy. Lydia is: A. a donee beneficiary. B. an incidental beneficiary. C. the assignee by novation. D. a creditor beneficiary.

Q: Creditor beneficiaries can: A. sue both the promisor and promisee. B. sue only the promisor. C. sue only for payment of money. D. sue in breach of insurance contracts.

Q: The promisor who delegates duties is ______ to the promisee if the party to whom the duties were delegated fails to satisfactorily perform them. A. liable B. not liable C. liable for novation D. liable to the assignee and not

Q: Zeta contracts to perform a violin solo for Pat. Zeta assigns the contract to Roy. Is this a valid delegation of duty? A. There is no valid delegation of Zeta's duty to play because all delegations must be expressly stated in the assignment contract. B. There is no valid delegation of Zeta's duty to play because the contract is one in which Zeta's personal skill as a musician is an essential part of the agreement. C. There is a valid delegation of Zeta's duty as Zeta has entered into a novation with Roy. D. There is a valid delegation of Zeta's duty because Zeta does not want to play for Pat.

Q: An assignor who assigns the contract will be relieved of the duty to perform to the other party on the original contract when: A. the assignee gives notice to the other party. B. there has been a novation of the original contract. C. the assignee contracts to successfully perform the duties. D. the contract of assignment explicitly states that the assignor is no longer liable to the other party.

Q: Once a donee or creditor beneficiary has accepted the contract, the original parties: A. can cancel the contract if the original contract gives them the right to. B. can cancel the contract without the third party's consent. C. can never cancel the contract. D. can cancel only monetary contracts.

Q: Carl is a doting father who wants to reward his son, Matt for graduating from college. Carl contracts with a local auto dealer to provide Matt with a new BMW. Under the contract, Carl promises to pay the dealer in exchange for the dealer's promise to deliver the car to Matt. The dealer then backs out of the deal and Matt wants to sue him. In this case: A. Matt is a creditor beneficiary of the contract and can enforce it against the dealer. B. Matt is a donee beneficiary of the contract and can enforce it against the dealer. C. Matt is an incidental beneficiary of the contract and cannot enforce it against the dealer. D. Matt cannot enforce the contract against the dealer because Carl's promise was gratuitous and therefore unenforceable.

Q: A donee beneficiary: A. is a third-party beneficiary to whom a gift of performance is given. B. is a third-party beneficiary who is no longer a part of an agreement. C. is a third-party beneficiary who incidentally benefits from a contract. D. is a third party beneficiary who cannot recover the value of the promised performance.

Q: Which of the following implied guarantee is made by assignors who are paid for making an assignment? A. The assignor can enhance the value of the assignment. B. The assignor has good title to the rights assigned. C. The contract has been discharged two months prior to assignment. D. Any written or oral statement representing the claim is genuine.

Q: When a promisor appoints another person to perform their duties under a contract: A. it is called an assignment. B. it is called a delegation. C. it creates an incidental beneficiary. D. it creates a donee beneficiary.

Q: Delegations can be prohibited by: A. the UCC. B. the Restatement of Contracts. C. public policy. D. involvement of personal rights.

Q: Rocky, who was voted the most valuable player of NYU's basketball team, can: A. delegate his duties to another player. B. cannot delegate due to public policy. C. cannot delegate as they involved his personal skill. D. assign his duties to another player.

Q: Unless an assignment agreement clearly indicates a contrary intent, courts today tend to interpret assignments as including a delegation of the assignor's duties. A promise on the part of the assignee to perform these duties: A. is not implicit. B. is enforceable by either the promisor or the assignor. C. depends on the policy followed by the public. D. is not enforceable by the assignor.

Q: A promisor who renders performance to the assignor without notice of the assignment: A. is still liable under the contract. B. has no further liability under the contract. C. creates a novation. D. cannot be sued for nonperformance.

Q: Assignees: A. cannot enforce any rights of assignor against obligator. B. cannot be liable for duties impliedly delegated with the assignment. C. can sue the promisor for nonperformance. D. can acquire greater rights than the assignor has.

Q: Notice to the promisor is important to address the issues of: A. liability of the assignee. B. priority only. C. liability and priority. D. validity of the assignment.

Q: For an assigned claim to be valid: A. the assignee must have the capacity to contract. B. the contract must not be illegal or known by the assignor to be voidable. C. the contract must have been discharged once prior to the assignment. D. the assignee must have good title before the rights are assigned.

Q: Why are contracts prohibiting competition with a buyer of a business or an employer assignable? A. To protect the goodwill of the business. B. To protect the employees from losing their jobs. C. To protect the interest of the public. D. To protect the value of the assets to be sold.

Q: Which of the following statements is true for assignment of contracts? A. It represents the transfer of duties to assignees. B. Rights cannot be sold in an assignment. C. The assignee is not entitled to the entire performance the assignor had a right to under the original contract. D. The promisor must render all performance to the assignee.

Q: Edward owes Frank $100, payable in six months. Frank, who is leaving the country on work, gives his rights to the payment to Marge for $80. Indicate the true statement about this case. A. Frank is the obligor. B. Edward owes Marge $80. C. Edward owes Marge $100. D. Frank will get $100 from Edward.

Q: Which of the following contracts can be assigned? A. Assignment of future wages B. Employment contracts C. Contracts promising to deliver goods D. Contracts involving personal rights

Q: (p. 298; 299) Assignments of future wages are not effective because: A. they involve personal relationships. B. they are contrary to public policy. C. they materially alter the duties of the promisor. D. they involve personal rights.

Q: (p. 298; 299) Which of the following is true for employment contracts? A. They are assignable. B. They are contrary to public policies. C. They are nonassignable. D. They involve the transfer of duties.

Q: Transfer of rights is referred to as a(n): A. assignment. B. novation. C. delegation. D. third-party contract.

Q: The term delegation refers to the transfer of: A. rights. B. duties. C. duties that a promisor did not want to perform. D. duties involving the promisor's personal skills.

Q: The creditor beneficiary has rights against the promisee, but not the promisor.

Q: Annie buys a car from Honest Bob's Motors. She then sells the car to Michael, who agrees to make the remaining payments Annie owes Honest Bob's. Honest Bob's is a creditor beneficiary of Annie, and can therefore recover the balance due from her only, not Michael.

Q: An incidental beneficiary cannot enforce a contract.

Q: Only specified individuals, and not members of the general public, can be incidental beneficiaries of contracts.