Question 1

A mutual rescission occurs when both parties agree that their contractual relationship should be terminated without performance.

Accepted Answer

A mutual rescission is a voluntary agreement between both parties to terminate a contract without any performance. This can be done for various reasons, such as a change in circumstances or the parties realizing that the contract is not in their best interests.

Question 2

If one party makes it clear that a contract will not be performed as it is supposed to be in the future, the party who will suffer from the breach must wait until the time of the breach to have the right to sue for damages.

Accepted Answer

If one party makes it clear that they will not perform as agreed in the future, this is called an anticipatory breach. In this situation, the innocent party does not have to wait until the time of the breach to sue for damages. They can sue immediately after the anticipatory breach occurs.

Question 3

If the obligations of a contract have been performed, the contract is discharged.

Accepted Answer

When all parties to a contract have fulfilled their obligations as specified in the contract, the contract is considered discharged or completed.

Question 4

Substantial performance, such as delivering 98 percent of the goods ordered, is generally not considered acceptable, and so is a breach of contract.

Accepted Answer

Substantial performance can be considered acceptable and not a breach of contract as long as it meets the essential purpose of the contract and does not significantly deviate from the terms. The percentage of goods delivered may not be the only factor in determining whether there is a breach of contract.

Question 5

If performance of a contract is clearly inferior to the requirements of the contract, there is a material breach.

Accepted Answer

A material breach is a serious violation of a contract that goes to the heart of the agreement, such as failing to perform a major obligation or failing to deliver goods or services that meet the requirements of the contract. If the performance is clearly inferior to the requirements of the contract, it is considered a material breach.

Question 6

Thiess owes Gina $2,000. Gina owes Web $4,000. Gina can assign her right to the $2,000 owed her by Thiess to Web, who becomes a third-party beneficiary of the contract.

Accepted Answer

Gina can assign her right to the $2,000 owed by Thiess to Web, making Web a third-party beneficiary of the contract. This is a valid legal concept.

Question 7

A third-party beneficiary is a party who is not part of an original contract but who acquires rights under the contract.

Accepted Answer

This is the correct definition of a third-party beneficiary.

Question 8

The doctrine of anticipatory breach comes from the Statute of Frauds.

Accepted Answer

The doctrine of anticipatory breach is a common law principle and does not come from the Statute of Frauds. The Statute of Frauds concerns contracts that are required to be in writing to be enforceable.

Question 9

A transfer of contract rights to a third party is an assignment.

Accepted Answer

An assignment is defined as a transfer of contract rights to a third party.

Question 10

If you anticipate that the other party to a contract will breach the contract, you must wait until the breach occurs before taking an alternative course of action or you will have breached the contract.

Accepted Answer

If you anticipate that the other party will breach the contract, you may be able to take preventive measures or seek legal advice to protect your interests. Waiting for the breach to occur before taking any action may not be the best course of action in all situations. Nonetheless, taking preemptive measures that unnecessarily interfere with the other party's performance or obligations under the contract could be considered a breach of contract or bad faith. It is essential to consult with an attorney and follow established procedures for enforcement or dispute resolution.

Question 11

In fulfilling the obligations of a contract, both parties are expected to act in good faith.

Accepted Answer

In contract law, the concept of good faith means that both parties are expected to act honestly and fairly in fulfilling their obligations under the contract. This includes not engaging in deceitful or fraudulent behavior and making reasonable efforts to fulfill their obligations as agreed upon in the contract.

Question 12

If most, but not all, of the obligations of a contract have been finished the contract is considered in breach until completed.

Accepted Answer

The contract is not considered in breach if most, but not all, of the obligations have been completed. As long as the remaining obligations are fulfilled within the agreed-upon timeframe, the contract will be considered fulfilled.

Question 13

Slight deviations from contract terms will result in a material breach.

Accepted Answer

A slight deviation from a contract term may not necessarily result in a material breach. A material breach occurs when the deviation significantly affects the performance of the contract or deprives the other party of their expected benefit under the contract.

Question 14

A transfer of contract rights to a third party is a delegation.

Accepted Answer

A transfer of contract rights to a third party is an assignment, not a delegation. Delegation refers to the transfer of duties or obligations.

Question 15

Assignment of contracts for services is generally not allowed, but delegation of contracts is more likely to be allowed.

Accepted Answer

This statement is generally true. Assignment of contracts for services might be restricted or prohibited by the terms of the contract or by law. However, delegation of contracts (where one party delegates its duties to a third party) may be allowed if the contract permits it or if the delegation does not materially change the performance of the contract.

Question 16

A lawyer promises to represent you in court for a certain fee but then sends an assistant to handle the case. This is a common, legitimate assignment of duties.

Accepted Answer

A lawyer's promise to personally represent a client is typically considered a personal service contract, which cannot be delegated to another without the client's consent.

Question 17

In Deschamps v. Treasure State Trailer Court, where the buyer of a trailer court said he was promised the water system was in good condition when in fact it was not, the Montana Supreme Court held that the parol evidence rule would apply.

Accepted Answer

The Montana Supreme Court held that the parol evidence rule would apply in Deschamps v. Treasure State Trailer Court.

Question 18

A transfer of contract duties to a third party is an assignment.

Accepted Answer

A transfer of contract duties to a third party is known as a delegation; an assignment involves the transfer of rights or benefits.

Question 19

A transfer of contract duties to a third party is a delegation.

Accepted Answer

A delegation involves transferring the duties of a contract to a third party, while the rights are retained by the original party.

Question 20

Parties to a contract may agree not to fulfill the contract as it was originally stated.

Accepted Answer

Parties may agree to modify or terminate a contract by mutual consent. This is known as a contract amendment or a mutual release.

Quiz 10: Contracts