Question 1

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 when an unforeseen event frustrates the underlying purpose of a contract, making performance significantly different from what was originally intended. In this case, the purpose of renting the rooftop spot was to watch the New Year's Eve festivities, which were unexpectedly canceled. Therefore, Harry is not obligated to pay under the frustration of purpose doctrine.

Question 2

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.
A)Linda must give $2000 for the dog, but only if the dog was insured.
B)Linda must give $2000 for the dog, but only if Missy can find a replacement dog within a reasonable time.
C)Linda must give $2000 for the dog.
D)None of the above; the contract duties are discharged.

Accepted Answer

Since the dog ran away and cannot be delivered to Linda, the contract duties cannot be fulfilled by either party. Therefore, the contract is discharged and Linda is not obligated to give the $2,000 for the dog.

Question 3

If a condition does not occur:
A)public policy will require only substantial performance by the party for whom the condition failed.
B)the requirement of good faith will be eliminated.
C)one party will probably be discharged without performing.
D)it is considered an anticipatory breach.

Accepted Answer

If a condition does not occur, it typically means that the obligation contingent on that condition is not triggered, and thus one party may be discharged from performing their contractual duties.

Question 4

A condition:
A)is created only when the phrase "provided that" or a similar phrase introduces it.
B)is an event that must occur before a party becomes obligated under a contract.
C)must be expressly stated, although it can be created by informal language.
D)will not be enforced by the courts unless formal language is used, regardless of the intent of the parties to create a condition.

Accepted Answer

A condition is an event that must occur before a party becomes obligated under a contract. It is not necessarily introduced by the phrase "provided that" or any other specific language, and it can be created by informal language. The courts will enforce conditions regardless of the formality of the language used, as long as the parties clearly intended to create a condition.

Question 5

A contract between a company in the U.S.and one in China,contained a clause that stated: "If an event happens which is extraordinary and out of the control of the parties such as a strike,act of God,fire,accident,or transportation difficulties,then the affected party shall be relieved of its obligations under the contract." This type of clause is:
A)an objective impossibility clause.
B)a force majeure clause.
C)a concurrent condition clause.
D)a condition precedent clause.

Accepted Answer

The clause described is a force majeure clause, which allows for a party to be relieved of their obligations under the contract if an unforeseeable event outside of their control occurs.

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 best choice is commercial impracticability. This situation falls under the doctrine of commercial impracticability where an unforeseeable event has made the performance of the contract impracticable for one of the parties. The bankruptcy of the landfill center has made it impracticable for Ron to perform the contract as agreed upon, resulting in a loss rather than a profit. Therefore, Ron can petition to be discharged from the contract due to commercial impracticability.

Question 7

Which of the following events would probably excuse 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

Commercial impracticability is a defense to breach of contract when an unforeseeable event or occurrence beyond the control of the parties, such as a trade embargo, makes performance of the contract commercially impracticable. Option B describes an unforeseeable event that significantly impacts the performance of the contract. Option A describes a slight increase in costs, which is not significant enough to excuse performance, while option C describes a situation of impossibility due to death. Option D describes a situation of impossibility due to the destruction of the subject matter, which would also excuse performance.

Question 8

Mary contracted to buy 100 table lamps.Under the terms of the agreement,Mary is to pay for the lamps upon delivery.This is an example of:
A)a condition precedent.
B)a concurrent condition.
C)a condition subsequent.
D)a service condition.

Accepted Answer

The answer of Mary contracted to buy 100 table lamps.Under...

Question 9

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 limit the time in which an injured party may sue.

Question 10

Martha owns a gutter cleaning business.Under a service contract with John Miller,she substantially performed her obligations.She is entitled to receive:
A)the full contract price.
B)nothing until she fully performs.
C)the full contract price minus the value of the defects.
D)nothing as she has breached the contract.

Accepted Answer

When a party substantially performs their obligations under a contract, they are entitled to the contract price minus any damages for the defects or incomplete performance.

Question 11

Hank has contracted with Nancy to purchase 50 bags of wheat that she stored in her barn for $25 each.A few days before delivery,the barn is destroyed by fire.Which of the following statements is correct?
A)Nancy is obligated to compensate Hank as her nonperformance is considered material breach.
B)Nancy is discharged from any further obligations under the contract due to destruction of the subject matter.
C)Nancy will be liable for Hank's loss if he ends up paying more for the same amount of wheat purchased from another supplier.
D)Nancy is discharged if she can prove commercial impracticability.

Accepted Answer

The destruction of the subject matter, which is the 50 bags of wheat stored in Nancy's barn, has made it impossible for Nancy to fulfill her obligations under the contract. Therefore, she is discharged from any further obligations under the contract. This is known as the doctrine of impossibility or frustration of purpose, which excuses performance when an unforeseeable event makes performance impractical or impossible. As a result, Nancy is not obligated to compensate Hank, nor is she liable for any loss he may suffer as a result of having to purchase the wheat from another supplier at a higher price.

Question 12

The distinction between a condition precedent and a condition subsequent:
A)is important because it determines whether the condition has to occur before or after the contract is made.
B)determines who has the burden of proof.
C)is important as it determines whether the conditions are concurrent.
D)is important because it determines whether the condition must be express or whether it can be implied.

Accepted Answer

The distinction between a condition precedent and a condition subsequent is important because it determines who has the burden of proof. A condition precedent must be proven by the party seeking to enforce the contract, while a condition subsequent must be proven by the party seeking to be released from the contract.

Question 13

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

Charles has committed a material breach by doing such a poor job that the carpet needs to be completely redone. Jackie is not required to pay anything to Charles because he did not fulfill his contractual obligations.

Question 14

Dodger bought an insurance contract from Liberty Farm Co.The policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred.Time is stated to be of the essence.Dodger sustained a covered farm loss,but did not report it to Liberty Farm until 50 days later.Liberty Farm denied coverage for the claim.If Dodger sues,who wins?
A)Dodger wins; the contract was substantially performed.
B)Liberty Farm wins; there was failure of a condition subsequent.
C)Dodger wins; courts will not enforce a time-of-the-essence clause.
D)Liberty Farm wins; the impossibility doctrine applies.

Accepted Answer

The insurance policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred. This is a condition subsequent, which means that if the condition is not met, the contract is terminated. Dodger did not report the loss within the specified time, therefore, Liberty Farm is entitled to deny coverage for the claim.

Question 15

Mario,a chef,has been working for over a year to remodel an old building he purchased to start his own restaurant.The grand opening is scheduled on April 1st.A lot of guests and critics have been invited to the event.He ordered a top of the art stove from Bella Cucina,Inc.The contract states that the stove has to be delivered on or before march 20,and that "time is of the essence" because of the opening-night deadline.Bella Cucina has some logistics difficulties and doesn't deliver the stove until March 27.Mario refuses to accept it,and Bella Cucina sues.Who wins?
A)Mario wins; the contract date was strictly enforceable.
B)Bella Cucina wins; the contract was substantially performed before the opening night.
C)Mario wins because of the frustration of purpose doctrine.
D)Bella Cucina wins if it can prove that delivering the stove before March 27 was unreasonable.

Accepted Answer

The contract clearly states that "time is of the essence" and the stove was not delivered by the specified date, which is a breach of contract. Mario has the right to refuse the delivery and can hold Bella Cucina responsible for any damages caused by the delay. The frustration of purpose doctrine does not apply here as the stove was the essential component of Mario's business and he had a valid reason to enforce the delivery date. Bella Cucina cannot argue that the delay was reasonable as they have explicitly agreed to the delivery date in the contract.

Question 16

Alamo Hotel contracted with First Furniture to purchase 500 black leather chairs for the conference rooms.The chairs are to be delivered on August 15.On July 20,First Furniture advises Alamo that,because of recent issues with wood suppliers,it will not be able to deliver the chairs.What can Alamo Hotel do?
A)It can sue First Furniture immediately for breach of contract even though the deadline has not expired yet.
B)It must wait until August 15 before suing for breach of contract.
C)It cannot sue First Furniture under the doctrine of impossibility.
D)Nothing as First Furniture is discharged under the force majeure doctrine.

Accepted Answer

Alamo Hotel can sue immediately for anticipatory breach of contract since First Furniture has indicated it will not fulfill its contractual obligations.

Question 17

Jennifer substantially performs her service contract with Gretchen.Due to Jennifer's failure to render complete performance,Gretchen:
A)is discharged from any further contractual obligations.
B)is required to pay the full contract price, minus the value of Jennifer's defective performance.
C)is required to pay the full contract price.
D)may declare a material breach and pay only for the value received.

Accepted Answer

The answer of Jennifer substantially performs her service contract with...

Question 18

A court:
A)will enforce any express conditions intended by the parties.
B)may refuse to enforce an express condition intended by the parties if the court determines it is unfair and harmful to the general public.
C)requires strict performance if a clause of the contract expressly demands it.
D)applies an objective standard whenever ruling on a personal satisfaction contract.

Accepted Answer

The answer of A court:
A)will enforce any express conditions intended...

Question 19

Dana hires Paris to paint a portrait of her poodle,"Mack." The painting is to be done to Dana's personal satisfaction.Upon completion of the painting,which of the following will be true?
A)Dana may refuse to accept the painting if she really does not like it.
B)Dana may refuse to accept the painting only if a reasonable person would not like it.
C)Dana may refuse to accept the painting if she cannot afford to pay for it.
D)Dana may not refuse to accept the painting.

Accepted Answer

Dana hired Paris to paint a portrait of her poodle to her personal satisfaction. This implies that she has the right to refuse to accept the painting if she is not satisfied with it, regardless of whether a reasonable person would like it or not. Therefore, option A is the best choice. Option C is irrelevant to the scenario, and option D is false as Dana has the right to refuse the painting. Option B is incorrect as personal satisfaction may not align with the views of a reasonable person.

Question 20

In the O'Brien v.Ohio State University case,the court held that:
A)O'Brien materially breached the contract as the University suffered substantial damage.
B)O'Brien's violation of the NCAA rules was a material breach.
C)O'Brien did not materially breach the contract as the University did not suffer substantial harm.
D)the contract was not enforceable under the frustration of purpose doctrine.

Accepted Answer

The court held that O'Brien did not materially breach the contract as the University did not suffer substantial harm. While O'Brien violated NCAA rules, the court determined that it did not result in substantial harm to the University, such as financial losses or damage to its reputation. Therefore, the University was not entitled to terminate the contract or recover damages.

Quiz 16: Performance and Discharge

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.

If a condition does not occur:

A condition:

Which of the following events would probably excuse performance of a contract based on commercial impracticability?

Mary contracted to buy 100 table lamps.Under the terms of the agreement,Mary is to pay for the lamps upon delivery.This is an example of:

Statutes of limitations:

Martha owns a gutter cleaning business.Under a service contract with John Miller,she substantially performed her obligations.She is entitled to receive:

Hank has contracted with Nancy to purchase 50 bags of wheat that she stored in her barn for $25 each.A few days before delivery,the barn is destroyed by fire.Which of the following statements is correct?

The distinction between a condition precedent and a condition subsequent:

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?

Jennifer substantially performs her service contract with Gretchen.Due to Jennifer's failure to render complete performance,Gretchen:

A court:

Dana hires Paris to paint a portrait of her poodle,"Mack." The painting is to be done to Dana's personal satisfaction.Upon completion of the painting,which of the following will be true?

In the O'Brien v.Ohio State University case,the court held that: