Question 1

Kip sells an apartment building to Lacy with a promise to repair the roof, which violates the local housing code, within six months. One year later, Kip sends Milo, a carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further payments to Kip, who files a suit against Lacy.
-Refer to Fact Pattern 15-3.Under the circumstances,with respect to damages,Chris can
A)bring an action immediately.
B)bring an action only after the contract's two-year term begins.
C)bring an action only after the contract's two-year term ends.
D)do nothing.

Accepted Answer

Kip can bring an action immediately because Lacy's refusal to allow the repair constitutes a breach of contract.

Question 2

Kip sells an apartment building to Lacy with a promise to repair the roof, which violates the local housing code, within six months. One year later, Kip sends Milo, a carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further payments to Kip, who files a suit against Lacy.
-Refer to Fact Pattern 15-3.Bell's repudiation is most likely
A)a material breach.
B)a minor breach.
C)Chris's breach.
D)no breach.

Accepted Answer

Lacy's refusal to make further payments and ordering Milo to leave constitutes a material breach of the contract. Kip promised to repair the roof within six months, and Lacy's refusal to allow Milo to complete the repair puts Kip in breach of his promise to Lacy.

Question 3

Eton and Fiona sign a contract by which Eton agrees to deliver a washing machine on July 31 in exchange for Fiona'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)speculative conditions.

Accepted Answer

The delivery of the washing machine and payment of the purchase price are dependent on each other and are expected to occur simultaneously. This makes them examples of concurrent conditions.

Question 4

Quito contracts with Rewind Graphix,Inc.,to pay $5,000 for its work on the animated film "Song." After Rewind performs,they sign an accord,in which Quito promises to pay $4,000 within ten days instead of $5,000 later.But Quito does not pay.Rewind can sue Quito
A)under no circumstances.
B)on the accord only.
C)on the accord or the original obligation.
D)on the original obligation only.

Accepted Answer

The accord made between Quito and Rewind modifies the original obligation, giving Quito a new payment deadline and a reduced amount owed. However, because Quito failed to comply with the accord and did not pay within the specified time frame, Rewind has the option to sue Quito for either the amount agreed upon in the accord or for the original obligation. Therefore, the correct choice is C, as both options are available to Rewind.

Question 5

Red's Plumbing Service substantially performs its contract with Shady Grove Condominiums,Inc.Shady Grove is entitled to
A)damages.
B)nothing more.
C)repudiation.
D)alteration.

Accepted Answer

The answer of Red's Plumbing Service substantially performs its contract...

Question 6

Kip sells an apartment building to Lacy with a promise to repair the roof, which violates the local housing code, within six months. One year later, Kip sends Milo, a carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further payments to Kip, who files a suit against Lacy.
-Refer to Fact Pattern 15-2.With respect to Mutual's duties,Neil's performance most likely
A)discharges Mutual from the contract.
B)has no effect on Mutual's performance.
C)increases Mutual's duties under the contract.
D)suspends Mutual's duty to perform.

Accepted Answer

The answer of Kip sells an apartment building to Lacy...

Question 7

Lake Port Services enters into a contract to load Max's Great Lakes barges with the cargo that Max designates.Lake Port's offer to perform,when Lake Port is ready,willing,able to do so,is
A)tandem.
B)tonnage.
C)tender.
D)tinder.

Accepted Answer

A tender offer is an offer to perform or provide goods or services at a certain price or terms. In this case, Lake Port Services has made an offer to load Max's Great Lakes barges with the cargo designated by Max when Lake Port is ready, willing, and able to do so. Therefore, the offer made by Lake Port is best described as a tender offer.

Question 8

Solid Toolmakers,Inc.,contracts to sell its business to Titan Hardware Corporation.Before either party has performed,rescission of this contract requires
A)a mutual agreement to rescind.
B)consideration.
C)performance by all of the parties.
D)an accord and satisfaction.

Accepted Answer

Rescission of a contract before performance can only be done through a mutual agreement between the parties involved. Consideration and performance would not be required as the contract has not been executed yet. An accord and satisfaction is a contract law concept where parties agree to settle an existing dispute, but it does not apply to this scenario as there is no existing dispute.

Question 9

Best Construction,Inc.,contracts to build a store for Cheesy Pizza Company,with Cheesy's payment due on June 1.On June 1,Cheesy's bank is closed,and for this reason,Cheesy claims it cannot pay Best on time.In this situation
A)Cheesy's bank is in breach of contract.
B)Cheesy is in breach of contract.
C)the contract is discharged.
D)the contract is suspended.

Accepted Answer

Cheesy Pizza Company is in breach of contract because they agreed to pay on June 1 and their bank being closed does not excuse them from fulfilling their obligation. They should have made alternative arrangements to ensure timely payment.

Question 10

Jill contracts to sell Ken her MP3 player for $50.This contract will be fully discharged when Jill and Ken
A)agree to sign a bill of sale.
B)exchange the player for the $50.
C)sign a receipt.
D)shake hands and go their separate ways.

Accepted Answer

The contract specifies that the MP3 player will be sold for $50, which means the exchange of the player for the money will fully discharge the contract. While a bill of sale or a receipt can serve as evidence of the transaction, they are not necessary for the contract to be discharged. A handshake is also not enough to fully discharge the contract.

Question 11

Jane and Kelly want Lucy to replace Kelly as a party to their contract.They can best accomplish this by
A)a mutual agreement to rescind.
B)an accord and satisfaction.
C)a novation.
D)an alteration of the contract.

Accepted Answer

A novation is the substitution of a new party for an existing one in a contract, with the consent of all parties involved. In this case, Jane and Kelly want Lucy to replace Kelly as a party to their contract, so they can best accomplish this through a novation.

Question 12

Candy enters into a contract under which she agrees to pay Dino for a business survey and review of her competitors.Dino agrees to deliver the survey by July 1.Candy's offer,on July 1,to pay Dino is
A)complete.
B)substantial.
C)tender.
D)tough.

Accepted Answer

Candy's offer to pay Dino on July 1 is considered tender, which means she is ready and willing to pay the agreed upon amount.

Question 13

Safe-T Guard Services enters into a contract to secure Taylor's Business Park from vandalism and theft between 6 p.m.and 6 A.m.nightly for six months.At the end of the term,if there has been no vandalism or theft in the Park,Safe-T's performance will have been
A)absolute.
B)complete.
C)conditional.
D)substantial.

Accepted Answer

The answer of Safe-T Guard Services enters into a contract...

Question 14

Kip sells an apartment building to Lacy with a promise to repair the roof, which violates the local housing code, within six months. One year later, Kip sends Milo, a carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further payments to Kip, who files a suit against Lacy.
-Refer to Fact Pattern 15-2.Neil's performance is most likely
A)a material breach.
B)a minor breach.
C)Mutual's breach.
D)no breach.

Accepted Answer

Kip made a promise to repair the roof within six months, which violated the local housing code. However, one year later, Kip sent a carpenter to fix the roof. This is a delay of six months beyond the promise. Therefore, Kip's delay in fulfilling the promise is a material breach, which allows Lacy to terminate the contract and refuse to make further payments to Kip. Thus, Neil's (or Kip's) performance is considered a material breach.

Question 15

Building Restoration,Inc.(BRI),enters into a contract to refurbish an old train depot for Casual Dining,Inc.,which plans to open Eat Up Restaurant in that location.If BRI completes most of the work promised in the contract,its performance will be
A)absolute.
B)complete.
C)material.
D)substantial.

Accepted Answer

Substantial performance means that although there may be minor deviations from the contract, the party has essentially fulfilled its obligations. In this case, BRI completing most of the work promised in the contract would constitute substantial performance, as long as any minor deviations are not material to the overall performance of the contract.

Question 16

Xavier enters into a contract to operate a Yummy Yogurt franchise,which Yummy agrees to support as long as Xavier maintains his business license.Yummy's duty to perform is
A)absolute.
B)conditional.
C)licentious.
D)operational.

Accepted Answer

Yummy's duty to perform is conditional upon Xavier maintaining his business license. If Xavier fails to maintain the license, Yummy may no longer be obligated to support the franchise.

Question 17

Kip sells an apartment building to Lacy with a promise to repair the roof, which violates the local housing code, within six months. One year later, Kip sends Milo, a carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further payments to Kip, who files a suit against Lacy.
-Refer to Fact Pattern 15-1.Lacy's refusal to make further payments is most likely
A)a material breach.
B)complete performance.
C)excused by Kip's failure to fix the roof.
D)substantial,but not complete,performance.

Accepted Answer

Lacy's refusal to make further payments is excused by Kip's failure to fix the roof within the agreed six-month period, which constitutes a breach of contract by Kip.

Question 18

Even-Bilt Construction contracts to build a warehouse for Discount Sales Mart.Even-Bilt completely performs.Discount Sales is entitled to
A)an accord.
B)rescission.
C)damages.
D)nothing more.

Accepted Answer

Since Even-Bilt completely performed the contract, Discount Sales Mart is entitled to nothing more than the completed warehouse as per the terms of the contract.

Question 19

Clyde contracts with Deephole Excavation,Inc.,to dig an agricultural pond on his farm.Deephole is to keep the excavated gravel in payment.Clyde's neighbor Earl challenges the dig as an illegal gravel pit.A court orders the digging to stop.Clyde's contract with Deephole is
A)breached.
B)discharged.
C)not affected.
D)suspended.

Accepted Answer

The court order to stop the digging has discharged the contract between Clyde and Deephole due to impracticability. Impracticability occurs when a supervening event makes performance impossible or impractical. Here, the court order has made it impossible for Deephole to perform the contract, thus it is discharged.

Question 20

Kip sells an apartment building to Lacy with a promise to repair the roof, which violates the local housing code, within six months. One year later, Kip sends Milo, a carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further payments to Kip, who files a suit against Lacy.
-Refer to Fact Pattern 15-1.Kip's late attempt to fix the roof is most likely
A)a material breach.
B)complete performance.
C)excused by Lacy's refusal to make further payments.
D)substantial,but not complete,performance.

Accepted Answer

Kip's failure to repair the roof within the agreed six-month period constitutes a material breach of the contract, as it violates a significant term of the agreement.

Quiz 15: Performance and Discharge

Eton and Fiona sign a contract by which Eton agrees to deliver a washing machine on July 31 in exchange for Fiona'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

Quito contracts with Rewind Graphix,Inc.,to pay $5,000 for its work on the animated film "Song." After Rewind performs,they sign an accord,in which Quito promises to pay $4,000 within ten days instead of $5,000 later.But Quito does not pay.Rewind can sue Quito

Red's Plumbing Service substantially performs its contract with Shady Grove Condominiums,Inc.Shady Grove is entitled to

Lake Port Services enters into a contract to load Max's Great Lakes barges with the cargo that Max designates.Lake Port's offer to perform,when Lake Port is ready,willing,able to do so,is

Solid Toolmakers,Inc.,contracts to sell its business to Titan Hardware Corporation.Before either party has performed,rescission of this contract requires

Best Construction,Inc.,contracts to build a store for Cheesy Pizza Company,with Cheesy's payment due on June 1.On June 1,Cheesy's bank is closed,and for this reason,Cheesy claims it cannot pay Best on time.In this situation

Jill contracts to sell Ken her MP3 player for $50.This contract will be fully discharged when Jill and Ken

Jane and Kelly want Lucy to replace Kelly as a party to their contract.They can best accomplish this by

Candy enters into a contract under which she agrees to pay Dino for a business survey and review of her competitors.Dino agrees to deliver the survey by July 1.Candy's offer,on July 1,to pay Dino is

Safe-T Guard Services enters into a contract to secure Taylor's Business Park from vandalism and theft between 6 p.m.and 6 A.m.nightly for six months.At the end of the term,if there has been no vandalism or theft in the Park,Safe-T's performance will have been

Building Restoration,Inc.(BRI) ,enters into a contract to refurbish an old train depot for Casual Dining,Inc.,which plans to open Eat Up Restaurant in that location.If BRI completes most of the work promised in the contract,its performance will be

Xavier enters into a contract to operate a Yummy Yogurt franchise,which Yummy agrees to support as long as Xavier maintains his business license.Yummy's duty to perform is

Even-Bilt Construction contracts to build a warehouse for Discount Sales Mart.Even-Bilt completely performs.Discount Sales is entitled to

Clyde contracts with Deephole Excavation,Inc.,to dig an agricultural pond on his farm.Deephole is to keep the excavated gravel in payment.Clyde's neighbor Earl challenges the dig as an illegal gravel pit.A court orders the digging to stop.Clyde's contract with Deephole is