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Law
Q:
Fact Pattern 17-1
Eve, who owns and operates Eve's Garden, agrees to sell Fresh Produce Company ten bushels of apples.Refer to Fact Pattern 17-1. A strike delays delivery of the apples by ten days. This circumstance
a. breaches the contract.
b. discharges the contract.
c. has no effect on the contract.
d. suspends the contract.
Q:
Fact Pattern 17-1
Eve, who owns and operates Eve's Garden, agrees to sell Fresh Produce Company ten bushels of apples.Refer to Fact Pattern 17-1. Through no fault of Eve's Garden, a fire destroys the apples before they are delivered to Fresh Produce. This circumstance
a. breaches the contract.
b. discharges the contract.
c. has no effect on the contract.
d. suspends the contract.
Q:
Fact Pattern 17-1
Eve, who owns and operates Eve's Garden, agrees to sell Fresh Produce Company ten bushels of apples.Refer to Fact Pattern 17-1. Eve dies before the apples are delivered to Fresh Produce. This circumstance
a. breaches the contract.
b. discharges the contract.
c. has no effect on the contract.
d. suspends the contract.
Q:
Luke is a farmer. When bad weather destroys Luke's crop, his obligation to deliver that crop under an outstanding contract with Macro Food Corporation is
a. discharged.
b. enforced completely.
c. enforced only to the extent of finding an alternative supply.
d. enforced only to the extent of transferring to the next year's crop.
Q:
Ruth contracts to provide Stan with fifty hours of telepathic personal coaching. The state legislature subsequently passes a law making telepathic personal coaching illegal. This law will
a. discharge the contract.
b. fulfill the contract.
c. not affect the contract.
d. require immediate performance of the contract.
Q:
Standard Construction, Inc. (SCI), contracts to build a store for Totally Chocolate Company (TCC), with TCC's payment due on June On June 1, TCC's bank is closed, and for this reason, TCC claims it cannot pay SCI on time. In this situation
a. SCI is in breach of contract.
b. TCC is in breach of contract.
c. the contract is discharged.
d. the contract is suspended.
Q:
Hal contracts with Internet Services, Inc. (ISI), to pay $500 for its services. After ISI performs, they sign an accord, in which Hal promises to pay $400 within ten days instead of the $500. Hal does not pay. ISI can sue Hal under
a. neither the accord nor the contract.
b. the accord only.
c. the accord or the contract.
d. the contract only.
Q:
Jane and Kelly want Lucy to replace Kelly as a party to their contract. They can best accomplish this by
a. accord and satisfaction.
b. novation.
c. reinvention.
d. specific performance.
Q:
Nora and Owen decide to rescind their contract. They must form
a. an accord.
b. a novation.
c. a second agreement that includes an offer, acceptance, and consideration.
d. a second agreement that includes an offer and acceptance, but no consideration.
Q:
Jean contracts to sell her car to Kyla for $2,000. Before performing, Jean and Kyla decide to cancel the deal. This is an example of
a. a material breach.
b. an anticipatory repudiation.
c. a novation.
d. a rescission.
Q:
Digital Data Company and E-Services, Inc., enter into a contract. A material breach of their contract will occur
a. if a party's performance is complete, but not substantial.
b. if a party's performance is substantial, but not complete.
c. if a party's performance is neither complete nor substantial.
d. only if a party completely fails to perform.
Q:
In Case 11, Jacob & Youngs, Inc. v. Kent, the court held that
a. once a contractor substantially performs the tasks that the contractor contractually agreed to perform, the contractor has no further obligation to the other party to the contract.
b. substantial performance is never a substitute for perfect and complete performance.
c. once a contractor substantially performs the tasks that the contractor contractually agreed to perform, the contractor is not obligated to complete performance but must compensate the other party for the difference in value between substantial and complete performance of the contract.
d. in the construction business, all performance is substantial performance.
Q:
AAA Autos contracts to sell a customized car to Barb. AAA installs a slightly used engine in the car, arguing that a new engine would be too costly. Barb sues AAA. The court will most likely rule in favor of
a. AAA, because a used engine is the same quality as a new engine.
b. AAA, if the difference between the used and new engines is trivial.
c. Barb, because the engine is not precisely what Barb wanted.
d. Barb, if there is any difference between the used and new engines.
Q:
Protective Finishes, Inc. (PFI), agrees to paint Quinn's house, using a particular brand of "discount" paint. PFI completes the job but uses a different brand of discounted paint. This is most likely
a. a complete excuse for Quinn's refusal to pay.
b. a material breach.
c. complete performance.
d. substantial performance.
Q:
Quality Contractors contracts to build a warehouse for Retail Storage Company. Quality completely performs. Retail Storage is entitled to
a. damages.
b. rescission.
c. specific performance.
d. nothing more.
Q:
Fred and Ed sign a contract by which Fred agrees to deliver a washing machine on July 31 in exchange for Ed's promise to pay the $500 purchase price on July 31. The delivery of the washing machine and the payment of $500 are examples of
a. conditions precedent.
b. concurrent conditions.
c. conditions subsequent.
d. illegal conditions.
Q:
Jay and Kim enter into a contract by which Jay agrees to sell Kim his laptop computer for $500. The contract will be fully discharged when
a. Jay and Kim sign the contract.
b. Jay gives possession of the computer to Kim.
c. Kim pays Jay $500.
d. both b and c.
Q:
Don agrees to buy Ed's Bicycle Store on the condition that First State Bank approves the financing. This approval is
a. a concurrent condition.
b. a condition precedent.
c. a condition subsequent.
d. a solvent condition.
Q:
Foreseeable bad weather conditions can excuse a party from performing a contract on the ground of commercial impracticability.
Q:
An innocent party is discharged when the other party alters a written contract without consent.
Q:
The formation of a contract whose performance will discharge a previous contract is a novation.
Q:
Contracts that are executory on both sides can be rescinded by agreement.
Q:
Anticipatory repudiation discharges a contract.
Q:
Anticipatory repudiation often occurs when price fluctuations render performance of a contract extremely unfavorable to one of the parties.
Q:
A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.
Q:
Any breach allows the nonbreaching party to sue for damages.
Q:
Any breach excuses the nonbreaching party's duty to perform.
Q:
A contract that involves mechanical fitness is a contract in which performance must personally satisfy the party to whom performance is owed.
Q:
Despite deviations from the specifications in a construction contract, a builder can be considered to have substantially performed.
Q:
A contract is substantially performed when performance creates substantially the same benefits as those promised in the contract.
Q:
When one party substantially performs his or her duties under a contract, the other party is required to fully perform.
Q:
Most contracts are discharged by operation of law.
Q:
A seller's duty to deliver becomes absolute once a contract is formed.
Q:
Concurrent conditions occur only when the parties to a contract are required to perform their respective duties simultaneously.
Q:
Conditions precedent are more common than conditions subsequent.
Q:
A condition subsequent must be met before a party's performance can be required.
Q:
When a condition operates to terminate a party's absolute promise to perform, it is a condition precedent.
Q:
A promise to pay in exchange for a promise of performance becomes an absolute duty when the agreement is formed.
Q:
Shade Tree Landscaping Company enters into a contract with Jill to landscape Jack's yard, using Fertile Nursery to supply trees and bushes. Maria owns the lot next to Jack's property. The landscaping is a gift from Jill to Jack, who is Jill's friend, but they are not related. What type of beneficiary is Jack? What type of beneficiary is Maria? What type of beneficiary is Fertile Nursery? If Shade Tree refuses to do the job, who can enforce the contract against it?
Q:
Ace Auto Company contracts to sell a car to Bob for $3,500. Bob gives Ace a worthless check for the price. Bob assigns his right to the car to Cathy. If Ace refuses to deliver the car to Cathy and Cathy sues, can Ace raise Bob's fraud as a defense against delivery of the car to Cathy? Explain.
Q:
Ron makes a contract with Sue that indirectly benefits Tim, although neither Ron nor Sue intended that result. Tim is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. none of the above.
Q:
Jen is a third party beneficiary under a contract between Kyla and Leo. Kyla and Leo can modify or rescind their contract without Jen's consent
a. at any time.
b. at no time.
c. only after Jen's rights have vested.
d. only before Jen's rights have vested.
Q:
Betty assigns her right to payment of a loan to Cody. Cody is
a. a creditor beneficiary.
b. a debtor beneficiary.
c. a donee beneficiary.
d. a donor beneficiary.
Q:
Fact Pattern 16-1
A-One Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eats Cafe is next to Carol's Home Store. The remodeling is a gift from Ben to Carol.Refer to Fact Pattern 16-1. Carol is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Q:
Fact Pattern 16-1
A-One Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eats Cafe is next to Carol's Home Store. The remodeling is a gift from Ben to Carol.Refer to Fact Pattern 16-1. Delta will realize a profit from the sale of products to A-One to remodel Carol's store. Delta is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Q:
Fact Pattern 16-1
A-One Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eats Cafe is next to Carol's Home Store. The remodeling is a gift from Ben to Carol.Refer to Fact Pattern 16-1. The value of Eats' property will increase after Carol's store is remodeled. Eats is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Q:
Fact Pattern 16-1
A-One Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eats Cafe is next to Carol's Home Store. The remodeling is a gift from Ben to Carol.Refer to Fact Pattern 16-1. Halfway through the project, A-One refuses to finish the job. The contract can be enforced against A-One by
a. Ben only.
b. Ben or Carol only.
c. Ben, Carol, or Delta only.
d. Ben, Carol, Delta, or Eats.
Q:
Mei's contract with Nick provides that "I (Mei) assign all of my rights under my contract with Owen to Nick." This provision is most likely to be construed as
a. a delegation of duties only.
b. an assignment of rights and a delegation of duties.
c. an assignment of rights only.
d. neither an assignment of rights nor a delegation of duties.
Q:
John promises to paint Kay's house in exchange for Lila's promise to plant trees on John's property. This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. not a delegation, an assignment, or a third party beneficiary contract.
Q:
Dina and Elle agree that Elle can satisfy a preexisting debt owed to Dina by paying the money directly to Frank. The designation of this contract as a third party beneficiary contract is determined by the intent to benefit
a. Dina, Elle, and Frank.
b. Dina only.
c. Elle only.
d. Frank only.
Q:
Jack contracts to provide lawn-mowing services to Lee. Jack cannot delegate this duty
a. because it is a personal service contract.
b. without continuing to be liable.
c. without Lee's consent.
d. without providing lawn-mowing services to Kim.
Q:
Reese and Gregg enter into a contract by which Reese promises to deliver sand to Gregg. Reese subsequently delegates his duty to deliver sand to Catherine. Reese is
a. the obligor only.
b. the delegator only.
c. the delegatee only.
d. the obligor and the delegator.
Q:
Basil, a world-famous chef, signs a contract to give lessons in French cooking to Marge. Basil attempts to delegate his duties under the contract to Oliver, the operator of a hot dog concession. The delegation of duties will
a. be valid.
b. be valid only if Oliver is a highly regarded barbecue chef.
c. not be valid because performance of the contract depends on Basil's unique skills.
d. not be valid only if Marge detests barbecued foods.
Q:
Citing consumer demand for even zanier commentary, Alfred Newmann sold Mad magazine to Crazy magazine. As part of the deal, Crazy gave Newmann, or a company that he controlled, advertising rights at a 95 percent discount for five years. Six months later, Newmann formed Normal magazine and began to use his advertising discount. About twelve months later, Newmann told Crazy that he was allocating his rights advertising rights to his other magazines, Even More Normal and Not So Normal. Newmann also stopped ordering advertising space for Normal and instead sent requests on behalf of his two new magazines. Crazy's other advertisers never liked Newmann and complained about this allocation. Crazy refused to allow this assignment, and Newmann sued. Based on the decision in Case 16.2, Gold v. Ziff Communications Co., the court in this case would most like rule in favor of
a. Crazy, because it notified Newmann in a timely manner that it would not allow the assignment.
b. Newmann, because he notified Crazy of his intentions to assign the advertising rights to his other two magazines.
c. Crazy, because the assignment was not expressly allowed in the original agreement between with Newmann.
d. None of the above.
Q:
In Case 12, Gold v. Ziff Communications, Inc., the court held that an assignment of contract rights
a. must be in a particular form to be legally valid.
b. may be implied from circumstances.
c. does not require a particular form to be legally valid.
d. Both b and c.
Q:
A contract between Computers, Inc., and Digital Corporation contains a clause stating that any assignment is "void." This effectively prohibits
a. any assignment.
b. no assignment.
c. only an assignment that does not include payment of consideration.
d. only an assignment that would increase the risk of nonperformance.
Q:
Retail Outlets, Inc., contracts with Superior Contractors to build a store. Superior assigns the contract to Town Builders, which has a poor record of completing projects. Retail could most successfully argue that the contract cannot be assigned because
a. Retail did not consent to the assignment.
b. Retail did not receive adequate consideration for the assignment.
c. the assignment will materially increase the risk of nonperformance.
d. none of the above.
Q:
Evan's sale of rights he has under a contract with Federated Retail, Inc., is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. not a delegation, an assignment, or a third party beneficiary contract.
Q:
Don makes a contract with Edie that indirectly benefits Frank. Neither Don nor Edie intended this result. This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. not a delegation, an assignment, or a third party beneficiary contract.
Q:
Adam attempts to free himself from the duties of his contract with Beth by telling Beth to find someone else to perform them. This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. none of the above.
Q:
If a contract benefits a third party only incidentally, the third party will not have the power to enforce the contract.
Q:
The rights of a third party beneficiary under a contract are subject to any express reservation of rights in the contract to the original parties.
Q:
A life insurance contract is a third party beneficiary contract involving a donee beneficiary.
Q:
A creditor beneficiary has the power to sue the promisee if the contract is breached.
Q:
A "donee" beneficiary is always an "incidental" beneficiary.
Q:
An intended beneficiary is entitled to enforce the promise of a promisor.
Q:
An incidental beneficiary is not entitled to enforce the promise of a promisor.
Q:
A third party has no rights to a contract to which he or she is not a party.
Q:
A delegation does not relieve the party making it of the obligation to perform if the party to whom the duty is delegated fails to perform.
Q:
Generally, any duty can be delegated.
Q:
In most states, a prior assignment usually prevails over a subsequent assignment.
Q:
Giving notice is not legally required to establish the validity of an assignment.
Q:
A contract that contains a clause prohibiting its assignment normally can be assigned.
Q:
Assignments of negotiable instruments are not generally permitted.
Q:
An assignment of an insurance policy cannot be prohibited.
Q:
An unconditional assignment of rights in a contract will extinguish the rights of the assignor.
Q:
An assignee can compel the obligor to perform.
Q:
A party to a contract may not transfer the rights arising from the contract to another.
Q:
Privity of contract refers to the fact that only the actual parties to a contract should have rights and liabilities under the contract.
Q:
A retail business can assign its right to receive payment from customers to a financing company for cash.