Question 1

In which case would true impossibility NOT apply?
A)Nelson contracted with a local restaurant to supply 10,000 pounds of potatoes, but a tornado tore through his field, completely destroying it.
B)A record company contracted with Darlene to produce a CD of traditional folk ballads; unfortunately, Darlene died before recording began.
C)Reed agrees to purchase an expensive piece of jewelry for $25,000; a week later, he tells the jeweler that he simply does not have that kind of money.
D)None of these are correct.

Accepted Answer

In option C, the situation is not a case of true impossibility as Reed has simply failed to fulfill his contractual obligation due to his own financial limitations, rather than an external event beyond his control. In options A and B, true impossibility applies as the destruction of Nelson's potato field and Darlene's death were unpredictable and beyond their control. Therefore, option D is also incorrect.

Question 2

When one party breaches a contract, the discharged party
A)has no obligation to perform.
B)may sue the breaching party for damages.
C)has no obligation to perform, and may sue the breaching party for damages.
D)None of these are correct.

Accepted Answer

When one party breaches a contract, the discharged party has no obligation to perform and may sue the breaching party for damages.

Question 3

Specific performance is available when the subject matter of the contract is unique.

Accepted Answer

Specific performance is a remedy available when the subject matter of the contract is unique, such as a one-of-a-kind piece of property or a rare work of art. It is not available for common goods or services.

Question 4

Which of the following events would have the best chance of excusing performance of a contract based on commercial impracticability?
A)The price of a raw material increases slightly so that the contract will not be as profitable.
B)An unforeseeable trade embargo causes prices to triple.
C)The promisor of personal services dies.
D)The subject matter of the contract is destroyed.

Accepted Answer

An unforeseeable trade embargo causing prices to triple would be considered a drastic and unforeseen circumstance that would make performance of the contract commercially impracticable. The other options (A, C, and D) are either minor changes or events that were foreseeable at the time of the contract formation.

Question 5

Jackie hires Charles to lay new carpet in her bedroom. Charles does such a bad job, that the only way to fix the carpet is to start over and relay the carpet. Which of the following best describes this situation?
A)This is substantial performance. Jackie must still pay something to Charles.
B)This is a material breach. Jackie must still pay something to Charles.
C)This is substantial performance. Jackie owes nothing to Charles.
D)This is a material breach. Jackie owes nothing to Charles.

Accepted Answer

This is a material breach because Charles did not perform the job as promised, and it cannot be easily fixed. Because of this, Jackie owes nothing to Charles.

Question 6

Ron operates a garbage pickup business. He contracts to pick up garbage from an apartment complex for the next 52 weeks at a price of $150 per week. Unexpectedly, the landfill center where Ron takes the garbage to dispose of it, files for bankruptcy. As a result, Ron must travel an additional 100 miles to the nearest landfill center, turning Ron's expected profit into a loss of $40 per week. Ron's best argument in support of his petition to be discharged from the contract is
A)the mail box rule.
B)commercial impracticability.
C)frustration of purpose.
D)true impossibility.

Accepted Answer

The situation described in the scenario constitutes commercial impracticability, as the unexpected bankruptcy of the landfill center has made it impractical for Ron to fulfill his contract with the apartment complex. This concept allows for a party to be discharged from a contract if unforeseen events make it extremely difficult or impractical to fulfill the obligations of the contract. Frustration of purpose and true impossibility are other concepts that can allow for discharge from a contract, but they do not clearly apply to this particular scenario. The mail box rule is not relevant to this situation.

Question 7

Al contracted to sell his house to Bev. Subsequently, they both changed their minds and decided to cancel the contract. The contract between Al and Bev is discharged by
A)full performance.
B)agreement.
C)accord and satisfaction.
D)novation.

Accepted Answer

The contract between Al and Bev is discharged by agreement, as both parties have mutually decided to cancel the contract.

Question 8

Under the UCC, the buyer is entitled to consequential damages if the seller could have reasonably foreseen them.

Accepted Answer

The UCC allows for consequential damages if they were reasonably foreseeable by the seller.

Question 9

Harry agreed to pay $100 to rent a rooftop spot in downtown Seattle to watch the New Year's Eve festivities. The festivities were unexpectedly canceled because of concern over a terrorist attack. Harry is
A)obligated to pay the $100.
B)not obligated to pay under the commercial impracticability doctrine.
C)not obligated to pay under the force majeure doctrine.
D)not obligated to pay under the frustration of purpose doctrine.

Accepted Answer

The frustration of purpose doctrine applies here because the primary purpose of renting the rooftop spot was to watch the New Year's Eve festivities, which were canceled due to unforeseen circumstances. This makes the contract voidable since the main reason for the contract's existence was frustrated by events beyond the control of either party.

Question 10

Linda agrees to buy Missy's Greyhound race dog for $2,000. Linda is to deliver the money and take possession of the dog the next morning. That night, running his best race ever, the dog runs away from Missy, never to be seen again. What will be the outcome in this case?
A)Linda must give $2,000 for the dog, but only if the dog was insured.
B)Linda must give $2,000 for the dog, but only if Missy can find a replacement dog within a reasonable time.
C)Missy must find another dog for Linda or pay her $2,000.
D)Linda does not have to pay for the dog; the contract duties are discharged.

Accepted Answer

The contract duties are discharged due to the fact that the dog ran away and is no longer available for possession by Linda. Both parties are released from their obligations under the contract.

Question 11

In January 2018, Professor Noe entered into a contract with State University. She agreed to teach full time during the 2018-2019 academic year. Professor Noe died on May 31, 2018. Her estate
A)is obligated to find another person who will agree to teach during the academic year.
B)is discharged from any further obligations under the contract.
C)will be discharged from any obligations under the contract only if it can be shown that her death was unexpected.
D)will not be discharged. If the University has to pay more in order to hire a comparable substitute professor at the last minute, then the estate will be responsible for the difference in pay.

Accepted Answer

The death of Professor Noe constitutes a breach of the contract, and her estate is discharged from any further obligations under the contract. This is because a personal service contract, such as a teaching contract, is terminated upon the death of the party obligated to perform. The estate is not obligated to find a replacement or to pay any damages because the contract was terminated due to an unforeseeable event, the death of Professor Noe.

Question 12

A contract clause which specifies the amount of damages to be paid in the event of a breach is called
A)a covenant of damages clause.
B)a reliance interest of damages clause.
C)a liquidated damages clause.
D)an incidental damages clause.

Accepted Answer

A liquidated damages clause is a contract provision that specifies the amount of damages that will be paid if one of the parties breaches the terms of the agreement. The purpose of the clause is to provide certainty and predictability in the event of a breach, and to avoid the need for costly litigation to determine the appropriate amount of damages.

Question 13

Banner enters into a contract with Sylvia to buy her house for $150,000. Sylvia decides later not to sell because she is so emotionally attached to the house. Banner insists that he is entitled to the house. Banner can successfully sue for specific performance.

Accepted Answer

Specific performance is a legal remedy where the court orders a party to fulfill their contractual obligations. In this case, Banner and Sylvia entered into a contract for Banner to purchase Sylvia's house for a specific amount. If Sylvia backs out without any legal justification, Banner can sue for specific performance, which would compel Sylvia to sell the house to Banner as agreed upon in the contract.

Question 14

Mohammed suffers a substantial financial loss when Olson Company breaches a contract. Under the statute of limitations, to receive damages Mohammed must file suit against Olson Company within
A)one year.
B)two years.
C)five years.
D)It depends on the state where Mohammed lives.

Accepted Answer

The statute of limitations varies by state, so it depends on the state where Mohammed lives. He should consult with a lawyer to determine the specific time frame for filing a lawsuit.

Question 15

M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in accordance with the agreement. Coda paid for the stands as promised. The contract between M & E and Coda is discharged by
A)full performance.
B)agreement.
C)rescission.
D)accord and satisfaction.

Accepted Answer

The contract between M & E and Coda is discharged by full performance because M & E shipped the 500 music stands as agreed upon, and Coda paid for them as promised. Both parties have fully performed their obligations under the contract, and therefore, the contract is discharged.

Question 16

The expectation interest is designed to put the injured party in the position he or she would have been in had both sides fully performed their obligations.

Accepted Answer

This is the correct definition of expectation interest. The injured party should be restored to the position they would have been in if the contract had been performed as agreed.

Question 17

The Grand Performance Hall is in the process of remodeling and is scheduled to open for business after being closed for 50 years. As part of the remodeling, it is installing a new sound system. The sound system is to be installed by Sound Systems, Inc. on or before April 10. Opening night of the hall is May 1. The contract states that "time is of the essence" because of the opening-night deadline. Sound Systems has some financial difficulties and doesn't deliver the system until April 20. Grand Hall refuses to accept it, and Sound Systems sues. What will be the result?
A)Grand Hall wins; the contract date was strictly enforceable.
B)Sound Systems wins; the contract was substantially performed.
C)Grand Hall wins; there was commercial frustration.
D)Sound Systems wins; there was a true impossibility.

Accepted Answer

The contract clearly stated that "time is of the essence" due to the opening-night deadline. This means that the deadline was a strictly enforceable term and Sound Systems was responsible for delivering the sound system on or before April 10. Since they failed to deliver until April 20, they did not meet the contract terms and Grand Hall is within their rights to refuse acceptance.

Question 18

Specific performance may be available for the breach of a contract to sell
A)an original painting.
B)20 shares of Walmart stock.
C)a Nintendo Wii video game system.
D)a 2007 Mustang in mint condition.

Accepted Answer

Specific performance may be available for the breach of a contract to sell an original painting because paintings are considered unique and one of a kind, making it difficult to find a suitable replacement if the seller breaches the contract.

Question 19

Mulligan Domestics Co. breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills, although the fabric met the contract specifications. In this situation, Wellington Mills
A)has at least four remedies under the UCC.
B)may resell the fabric to someone else and, if it sues Mulligan, Wellington Mills will be awarded the full contract price.
C)may choose not to resell the fabric and settle for the difference between the contract price and the market value.
D)would be awarded consequential damages by most courts.

Accepted Answer

According to the UCC (Uniform Commercial Code), if the buyer breaches a contract by refusing to accept the goods that meet the contract specifications, the seller has the right to resell the goods to someone else and claim damages from the buyer for any loss incurred. In this case, Wellington Mills may choose not to resell the fabric and settle for the difference between the contract price and the market value. This is known as the "cover" remedy under the UCC. While there are other remedies available to the seller under the UCC, such as the right to reclaim the goods, the right to cancel the contract, and the right to sue for damages, the best option for Wellington Mills in this particular situation is to choose the cover remedy. Therefore, the correct answer is C.

Question 20

Statutes of limitations
A)define how much money the injured party can sue for under a breach of contract claim.
B)define whether there has been substantial performance of a contract or a material breach.
C)limit the time in which an injured party may sue.
D)only apply to the sale of goods. There is no statute of limitations on a service contract.

Accepted Answer

Statutes of limitations specify the period of time within which a party must bring a legal claim. They vary by state and by the type of claim or case, and failure to bring an action within the applicable statute of limitations period can result in the claim being time-barred. Therefore, option C is the correct choice as it defines the limitation period for bringing a claim. The other options are incorrect: (A) is related to the amount of damages rather than the time frame for bringing the claim, (B) is related to the performance or breach of contract, and (D) is incorrect as statues of limitations apply to both, goods as well as services.

Quiz 12: Performance, Discharge, and Remedies

In which case would true impossibility NOT apply?

When one party breaches a contract, the discharged party

Specific performance is available when the subject matter of the contract is unique.

Which of the following events would have the best chance of excusing performance of a contract based on commercial impracticability?

Jackie hires Charles to lay new carpet in her bedroom. Charles does such a bad job, that the only way to fix the carpet is to start over and relay the carpet. Which of the following best describes this situation?

Al contracted to sell his house to Bev. Subsequently, they both changed their minds and decided to cancel the contract. The contract between Al and Bev is discharged by

Under the UCC, the buyer is entitled to consequential damages if the seller could have reasonably foreseen them.

Harry agreed to pay $100 to rent a rooftop spot in downtown Seattle to watch the New Year's Eve festivities. The festivities were unexpectedly canceled because of concern over a terrorist attack. Harry is

Linda agrees to buy Missy's Greyhound race dog for $2,000. Linda is to deliver the money and take possession of the dog the next morning. That night, running his best race ever, the dog runs away from Missy, never to be seen again. What will be the outcome in this case?

In January 2018, Professor Noe entered into a contract with State University. She agreed to teach full time during the 2018-2019 academic year. Professor Noe died on May 31, 2018. Her estate

A contract clause which specifies the amount of damages to be paid in the event of a breach is called

Banner enters into a contract with Sylvia to buy her house for $150,000. Sylvia decides later not to sell because she is so emotionally attached to the house. Banner insists that he is entitled to the house. Banner can successfully sue for specific performance.

Mohammed suffers a substantial financial loss when Olson Company breaches a contract. Under the statute of limitations, to receive damages Mohammed must file suit against Olson Company within

M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in accordance with the agreement. Coda paid for the stands as promised. The contract between M & E and Coda is discharged by

The expectation interest is designed to put the injured party in the position he or she would have been in had both sides fully performed their obligations.

Specific performance may be available for the breach of a contract to sell

Mulligan Domestics Co. breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills, although the fabric met the contract specifications. In this situation, Wellington Mills

Statutes of limitations