Chapter 18 Performance & Discharge Quiz

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Question #1

If a contract condition is not satisfied, the obligations of the parties are suspended.

A False

B True

Question #2

To rescind a contract, the parties must make a second agreement that satisfies the legal requirements for a contract.

A False

B True

Question #3

After a contract is made, a supervening event may make performance impossible in an objective sense.

A False

B True

Question #4

When an anticipatory repudiation occurs, it is treated as a material breach of a contract.

A True

B False

Question #5

Any breach allows the nonbreaching party to cancel the contract.

A False

B True

Question #6

Most contracts need to be performed only to the satisfaction of a reasonable person unless they expressly state otherwise.

A True

B False

Question #7

A party who in good faith performs substantially all of the terms of a contract can enforce the contract against the other party.

A False

B True

Question #8

Moses sells an apartment building to Noelle with a promise to install a new heating and air conditioning system , before September 1. The following February 1, Moses sends Ollie, an HVAC technician, to begin the installation. Noelle orders Ollie to leave and refuses to make further payments to Moses, who files a suit against Noelle.
Noelle’s refusal to make further payments is most likely

A excused by Moses’s failure to timely install the ventilation system.

B substantial, but not complete, performance.

C a material breach.

D complete performance.

Question #9

Nina contracts with Office Suites Corporation to buy a suite in its Prospect Point Tower at a premium for its view of Quay Harbor. Unforeseeably, the town of Quay Harbor changes its zoning law, and Resort Hotels, Inc., constructs Seaview Resort, blocking what would have been Nina’s view. Nina’s best argument for a change in the Office Suites contract or its price is

A anticipatory repudiation.

B frustration of purpose.

C commercial impracticability.

D objective impossibility of performance.

Question #10

Adrian operates a recycled metals business and contracts to provide ten tons of scrap steel at $500 per ton to be delivered to Build-It-Rite Materials, Inc., in seven months. An un¬fore¬seen shortage of scrap steel suddenly develops, making it impossible for Adrian to fulfill the contract for less than $5,000 per ton. Adrian’s best defense against performing the contract would be that

A the law has rendered performance of the contract illegal.

B the specific subject matter of the contract has been destroyed.

C performance of the contract is commercially impracticable.

D procuring the steel would force the seller into bankruptcy.

Question #11

Lana agrees to work as Michelle’s personal assistant for one year but dies in the ninth month of the contract. Lana’s estate

A must pay damages.

B must find a competent assistant to fulfill the contract.

C is discharged from any contractual liability.

D must refund any moneypaid to Lana on the contract.

Question #12

OnTrack Rehabilitation Center signs an agreement with Platinum Bank to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 percent. OnTrack’s best argument for avoiding payment to Platinum Bank is that

A payment of the loan would force the debtor into bankruptcy.

B the law has rendered performance of the contract illegal.

C performance of the contract is commercially impracticable

D the specific subject matter of the contract has been destroyed.

Question #13

On April 1, Construction Contractors, Inc., contracts to build a store for Discount Retail, Inc., at a specific location in Electro City. On April 10, Electro changes its zoning law to prohibit the construction of a commercial building at that location. Discount Retail files a suit against Construction Contractors. In this situation

A the contract is suspended.

B Construction Contractors is in breach of contract.

C the contract is discharged.

D Discound Retail is in breach of contract.

Question #14

Omar and Penn want to discharge their contract by executing a new agreement with performance different from what they originally promised. They can best accomplish this by

A an accord and satisfaction.

B a mutual agreement to rescind.

C an alteration of the original contract.

D a novation.

Question #15

Gliding Light, LLC, and Hang Gliders, Inc., are parties to a contract. They subsequently agree that High Riders Inc. should take Gliding Light’s place and assume all of its rights and duties under the contract. This is

A a mutual agreement to rescind.

B a novation.

C an accord and satisfaction.

D a settlement agreement.

Question #16

Drainage & Irrigation Equipment, Inc., contracts to sell its assets to Earth & Sky Aquatic Corporation. Before either party has performed, rescission of this contract requires

A an accord and satisfaction.

B a settlement agreement.

C a mutual agreement to rescind.

D a novation.

Question #17

Business Computer Solutions Education Service enters into a contract to employ Chandra as an instructor for two years to begin June 1. One month before the term begins, Business Computer is underbid by a competitor and loses a major client, Debt Consolidation Corporation. Business Computer now refuses to hire Chandra.
Under the circumstances, with respect to damages, Chandra can

A bring an action only after the contract’s two-year term begins.

B bring an action immediately.

C bring an action only after the contract’s two-year term ends.

D do nothing.

Question #18

Moses sells an apartment building to Noelle with a promise to install a new heating and air conditioning system , before September 1. The following February 1, Moses sends Ollie, an HVAC technician, to begin the installation. Noelle orders Ollie to leave and refuses to make further payments to Moses, who files a suit against Noelle. Moses’s late attempt to install the ventilation system is most likely

A a material breach.

B complete performance

C substantial, but not complete, performance.

D excused by Noelle’s refusal to make further payments.

Question #19

Herb’s Hot Dog Vending, Inc., enters into a contract to pay Idris for a business survey and review of Herb’s competitors, which Idris delivers on August 1. Herb’s offer, on the same date, to pay Idris is

A a novation.

B mutual recission.

C a concurrent condition

D tender.

Question #20

Polly agrees to buy Quinn’s Cycle World store business on the express condition that Ridgeline Credit Union approves the financing. This approval is

A not a condition.

B a condition subsequent.

C a concurrent condition.

D a condition precedent

Question #21

Bernadette enters into a contract to operate a Caramel Coffee franchise, which Caramel Coffee agrees to support as long as Bernadette maintains her business license. Caramel Coffee’s duty to perform is

A a concurrent condition

B a condition subsequent

C not a condition

D a condition precedent

Question #22

Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged when Kali and Leony

A agree to sign a bill of sale.

B exchange the car for the $3,000.

C sign a receipt.

D shake hands and go their separate ways.

Question #23

Dharma enters into a contract to manage the operations of Esther’s dental office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be

A canceled.

B breached

C performed

D altered

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Chapter 18 Performance & Discharge Quiz

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