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Interactive Quiz for ALT-12e, Chapter 17

Chapter 17 – Performance and Discharge in Traditional and E-Contracts

1. The most common way to discharge, or terminate, contractual duties is by: a. rescission. b. novation. c. performance. d. by breaching the contract.

Answers:

a. Incorrect. Performance is the most common way to discharge a contract. b. Incorrect. Novation is the substitution of parties to a contract, not the most common way to discharge contractual duties. c. Correct. Most contractual duties are discharged by performance. d. Incorrect. Most contractual duties are not discharged by breaching the contract.

2. The duty to perform under a contract: a. may be conditioned only. b. may only be absolute. c. may be absolute but only if the subject matter is constitutional. d. may be either conditioned or absolute.

Answers:

a. Incorrect. The duty to perform may also be absolute. b. Incorrect. The duty to perform may also be conditioned. c. Incorrect. An absolute duty to perform is not linked to the constitutionality of the subject matter. d. Correct. The duty may be either conditioned or absolute.

3. Suppose that Lou agrees to build a shopping center on a certain parcel of land contingent on a determination that there are no environmental problems, such as contaminated soil, with the property. In this case, the contingency represents: a. a vested interest. b. a condition subsequent. c. a condition precedent. d. a full and complete discharge.

Answers: 2

a. Incorrect. The contingency is a condition that must be met before Lou’s promise to build becomes absolute. b. Incorrect. The contingency is a condition that must be met before Lou’s promise becomes absolute. A condition subsequent is a condition that, if not fulfilled, terminates the other party’s obligation to perform. c. Correct. This contingency is a condition precedent. d. Incorrect. The contingency is not the same thing as a discharge.

4. Carol agrees to buy a particular photograph from Fernando when he delivers the picture to her office. This is known as: a. a condition concurrent. b. condition subsequent. c. a condition precedent. d. a condition terminate.

Answers:

a. Correct. The contract is conditioned on Carol’s performance by paying for the photo at the same time that Fernando performs by delivering the photo. b. Incorrect. This is not a condition subsequent. c. Incorrect. This is not a condition precedent. d. Incorrect. There is no such thing as a condition terminate.

5. What are the two basic types of performance? a. Remote and local performance. b. Future and past performance. c. Established and disestablished performance. d. Complete and substantial performance.

Answers:

a. Incorrect. Although performance may take place locally or in a remote location, these are not the two basic types of performance. b. Incorrect. Again, although performance may have taken place in the past or be scheduled to take place in the future, these are not the two basic types of performance. c. Incorrect. These are not the two basic types of performance. d. Correct. Complete performance and substantial performance are the two basic types of performance in contract law.

6. Suppose that Jon agrees to build a house for Beth. John substantially performs the contract in good faith. If Beth refuses to pay him, Jon will may be able to recover payment from Beth if: a. his failure to completely perform the contract was willful. a. his failure to completely perform the contract was not willful. 3

b. his failure to completely perform the contract was a condition precedent. c. his failure to completely perform the contract was done out of malice.

Answers:

a. Incorrect. If his failure to perform was willful, Jon will not have demonstrated good faith, and so may not enforce the contract. b. Correct. If Jon acted in good faith and his failure was not willful, he may enforce the contract against Beth. c. Incorrect. There is no requirement that the failure to perform be a condition precedent. d. Incorrect. If Jon’s failure to perform was done out of malice, he did not demonstrate good faith.

7. When a breach of contract is material, this means that: a. the nonbreaching party has a cause of action to sue for damages caused by the breach. b. the breaching party has a cause of action to sue for damages caused by the breach. c. the court must rewrite the terms of the contract to better reflect the parties’ intent. d. the nonbreaching party must perform his or her contractual duties in order to have a cause of action to sue for damages.

Answers:

a. Correct. In this situation, the nonbreaching party has a cause of action for damages incurred as a result of the breach. b. Incorrect. The breaching party caused the harm and does not have a cause of action. c. Incorrect. The court is not required to rewrite contract terms to better reflect the intent of the contracting parties. d. Incorrect. In this situation, the nonbreaching party is not required to perform his or her contractual duties to have a cause of action for damages.

8. Assume that three weeks before you and Lester are supposed to close your deal for the sale a twenty-acre tract of land, Lester calls you and says, “The deal is off!” In this situation, Lester’s actions constitute: a. substantial performance of the contract. b. an anticipatory repudiation of the contract. c. a reformation of the contract. d. a discharge of the contract by novation. e. Answers: 4

a. Incorrect. Lester has not performed his obligation to you, so he has not substantially performed under the terms of this contract. b. Correct. Lester is refusing to perform before the date specified in the contract for performance. This is an anticipatory repudiation of the contract. c. Incorrect. The court has not changed the terms of the contract, so this is not a reformation of the contract. d. Incorrect. The parties to the contract have not been changed (not yet anyway), so this is not a discharge by novation.

9. William and Laverne enter into a contract for William to paint Laverne’s house. William and Laverne fail to specify a time for performance. In this case: a. performance must take place within fourteen days. b. performance must take place within seven days. c. performance must take place immediately. d. performance must take place within a reasonable time.

Answers:

a. Incorrect. There is no requirement, legally, that performance take place within fourteen days. b. Incorrect. There is no requirement, legally, that performance take place within seven days. c. Incorrect. There is no requirement, legally, that performance take place immediately. d. Correct. When the date of performance is not specified in a contract, performance must take place within a reasonable time.

10. After two weeks, William and Laverne both decide that their contract does not meet their needs. They decide to cancel the agreement. This is known as: a. performance. b. novation. c. restitution. d. rescission.

Answers:

a. Incorrect. The parties to the contract have not performed. b. Incorrect. The parties have not agreed to substitute another party. c. Incorrect. This is not a restitution. d. Correct. The parties are rescinding, or canceling, their contract. 5