Quiz
Business Law- Contracts- Performance
Perguntas do quiz (28)
1Ames Construction Co. contracted to build a warehouse for White Corp. The construction specifications required Ames to use Ace lighting fixtures. Inadvertently, Ames installed Perfection lighting fixtures which are of slightly lesser quality than Ace fixtures, but in all other respects meet White's needs. Which of the following statements is correct?
- AB. White will not be able to recover any damages from Ames because the breach was inadvertent.
- BC. Ames did not breach the construction contract because the Perfection fixtures were substantially as good as the Ace fixtures.
- CD. Ames must install Ace fixtures, or White will not be obligated to accept the warehouse.
- DA. White's recovery will be limited to monetary damages because Ames' breach of the construction contract was not material.
2Bond and Spear orally agreed that Bond would buy a car from Spear for $475. Bond paid Spear a $100 deposit. The next day, Spear received an offer of $575, the car's fair market value. Spear immediately notified Bond that Spear would not sell the car to Bond and returned Bond's $100. If Bond sues Spear and Spear defends on the basis of the statute of frauds, Bond will probably:
- AA. lose, because the agreement was for less than the fair market value of the car.
- BB. win, because the agreement was for less than $500.
- CC. lose, because the agreement was not in writing and signed by Spear.
- DD. win, because Bond paid a deposit.
3For a purchaser of land to avoid a contract with the seller based on duress, it must be shown that the seller's improper threats:
- AA. constituted a crime or tort.
- BB. would have induced a reasonably prudent person to assent to the contract.
- CC. actually induced the purchaser to assent to the contract.
- DD. were made with the intent to influence the purchaser.
4Which of the following types of conditions affecting performance may validly be present in contracts?
- AA. Conditions precedent, conditions subsequent, and concurrent conditions
- BB. Conditions precedent and conditions subsequent
- CC. Conditions precedent and concurrent conditions
- DD. Conditions subsequent and concurrent conditions
5Which of the following promises is supported by legally sufficient consideration and will be enforceable?
- AC. A promise to pay the police $250 to catch a thief
- BB. A parent's promise to pay one child $500 because that child is not as wealthy as the child's sibling
- CD. A promise to pay a minor $500 to paint a garage
- DA. A person's promise to pay a real estate agent $1,000 in return for the real estate agent's earlier act of not charging commission for selling the person's house
6Nolan agreed orally with Train to sell Train a house for $100,000. Train sent Nolan a signed agreement and a down payment of $10,000. Nolan did not sign the agreement, but allowed Train to move into the house. Before closing, Nolan refused to go through with the sale. Train sued Nolan to compel specific performance. Under the provisions of the statute of frauds:
- AA. Train will win because Train signed the agreement and Nolan did not object.
- BB. Train will win because Train made a down payment and took possession.
- CC. Nolan will win because Nolan did not sign the agreement.
- DD. Nolan will win because the house was worth more than $500.
7Miller negotiated the sale of Miller's liquor store to Jackson. Jackson asked to see the prior year's financial statements. Using the store's checkbook, Miller prepared a balance sheet and profit and loss statement as well as he could. Miller told Jackson to have an accountant examine Miller's records because Miller was not an accountant. Jackson failed to do so and purchased the store in reliance on Miller's financial statements. Jackson later learned that the financial statements included several errors that resulted in a material overstatement of assets and net income. Miller was not aware that the errors existed. Jackson sued Miller, claiming Miller misrepresented the store's financial condition and that Jackson relied on the financial statements in making the decision to acquire the store. Which of the following statements is correct?
- AA. Jackson will prevail if the errors in the financial statements were material.
- BB. Jackson will not prevail because Jackson's reliance on the financial statements was not reasonable.
- CC. Money damages are the only remedy available to Jackson if, in fact, Miller has committed a misrepresentation.
- DD. Jackson would be entitled to rescind the purchase even if the errors in the financial statements were not material.
8Under the parol evidence rule, oral evidence will be excluded if it relates to:
- AA. a contemporaneous oral agreement relating to a term in the contract.
- BB. failure of a condition precedent.
- CC. lack of contractual capacity.
- DD. a modification made several days after the contract was executed.
9Grove is seeking to avoid performing a promise to pay Brook $1,500. Grove is relying on lack of consideration on Brook's part. Grove will prevail if he can establish that:
- AA. prior to Grove's promise, Brook had already performed the requested act.
- BB. Brook's only claim of consideration was the relinquishment of a legal right.
- CC. Brook's asserted consideration is only worth $400.
- DD. the consideration to be performed by Brook will be performed by a third party.
10Yost contracted with Egan for Yost to buy certain real property. If the contract is otherwise silent, Yost’s rights under the contract are:
- AA. assignable only with Egan’s consent.
- BB. nonassignable because they are personal to Yost
- CC. nonassignable as a matter of law.
- DD. generally assignable.
11Wilcox Co. contracted with Ace Painters, Inc., for Ace to paint Wilcox’s warehouse. Ace, without advising Wilcox, assigned the contract to Pure Painting Corp. Pure failed to paint Wilcox’s warehouse in accordance with the contract specifications. The contract between Ace and Wilcox was silent with regard to a party’s right to assign it. Which of the following statements is correct?
- AA. Ace remained liable to Wilcox despite the fact that Ace assigned the contract to Pure.
- BB. Ace would not be liable to Wilcox if Ace had notified Wilcox of the assignment.
- CC. Ace’s duty to paint Wilcox’s warehouse was nondelegable.
- DD. Ace’s delegation of the duty to paint Wilcox’s warehouse was a breach of the contract.
12Johns leased an apartment from Olsen. Shortly before the lease expired, Olsen threatened Johns with eviction and physical harm if Johns did not sign a new lease for twice the old rent. Johns, unable to afford the expense to fight eviction, and in fear of physical harm, signed the new lease. Three months later, Johns moved and sued to void the lease claiming duress. The lease will be held:
- AA. void because of the unreasonable increase in rent.
- BB. voidable because of Olsen's threat to bring eviction proceedings.
- CC. void because of Johns' financial condition.
- DD. voidable because of Olsen's threat of physical harm.
13Carson agreed orally to repair Ives' rare book for $450. Before the work was started, Ives asked Carson to perform additional repairs to the book and agreed to increase the contract price to $650. After Carson completed the work, Ives refused to pay and Carson sued. Ives' defense was based on the statute of frauds. What total amount will Carson recover?
- AA. $0
- BB. $200
- CC. $450
- DD. $650
14In negotiations with Andrews for the lease of Kemp’s warehouse, Kemp orally agreed to pay one-half of the cost of the utilities. The written lease, later prepared by Kemp’s attorney, provided that Andrews pay all of the utilities, Andrews refused, claiming that the lease did not accurately reflect the oral agreement. Andrews also learned that Kemp intentionally misrepresented the condition of the structure of the warehouse during the negotiations between the parties. Andrews sued to rescind the lease and intends to introduce evidence of the parties’ oral agreement about sharing the utilities and the fraudulent statements made by Kemp. The parol evidence rule will prevent the admission of evidence concerning the:
1. oral agreement regarding who pays the utilities.
2. fraudulent statements by Kemp.
- AA. Both 1 and 2
- BB. Only 2
- CC. Only 1
- DD. Neither 1 or 2
15Sand orally promised Frost a $10,000 bonus, in addition to a monthly salary, if Frost would work two years for Sand. If Frost works for the two years, will the statute of frauds prevent Frost from collecting the bonus?
- AA. No, because Frost fully performed
- BB. No, because the contract did not involve an interest in real estate
- CC. Yes, because the contract could not be performed within one year
- DD. Yes, because the monthly salary was the consideration of the contract
16Jerry’s House of Jewelry, Inc., took out an insurance policy with the Old Time Insurance Company that covered the stock of jewelry displayed in the store’s windows. Old Time agreed to indemnify Jerry’s House for losses due to window smashing and theft of the jewels displayed. The application contained the following provision: “It is hereby warranted that the maximum value of the jewelry displayed shall not exceed $10,000.” The insurance policy’s coverage was for $8,000. The application was initialed alongside the warranty and attached to the policy. Subsequently, thieves smashed the store window and stole $4,000 worth of jewels. The total value of the display during that week, including the day of the robbery, was $12,000. Which of the following is correct?
- AA. Jerry’s House will recover nothing.
- BB. Jerry’s House will recover $2,000, the loss less the amount in excess of the $10,000 display limitation.
- CC. Jerry’s House will recover the full $4,000 since the warranty will be construed as a mere representation.
- DD. Jerry’s House will recover the full $4,000 since attaching the application to the policy is insufficient to make it a part thereof.
17Able hired Carr to restore Able’s antique car for $800. The terms of their oral agreement provided that Carr was to complete the work within 18 months. Actually, the work could be completed within one year. The agreement is:
- AA. unenforceable, because it covers services with a value in excess of $500.
- BB. unenforceable, because it covers a time period in excess of one year.
- CC. enforceable, because personal service contracts are exempt from the statute of frauds.
- DD. enforceable, because the work could be completed within one year.
18Rogers and Lennon entered into a written computer consulting agreement that required Lennon to provide certain weekly reports to Rogers. The agreement also stated that Lennon would provide the computer equipment necessary to perform the services and that Rogers' computer would not be used. As the parties were executing the agreement, they orally agreed that Lennon could use Rogers' computer. After executing the agreement, Rogers and Lennon orally agreed that Lennon would report on a monthly, rather than weekly basis. The parties now disagree on Lennon's right to use Rogers' computer and how often Lennon must report to Rogers. In the event of a lawsuit between the parties, the parol evidence rule will:
- AA. not apply to any of the parties' agreements because the consulting agreement did not have to be in writing.
- BB. not prevent Lennon from proving the parties' oral agreement that Lennon could use Rogers' computer.
- CC. not prevent the admission into evidence of testimony regarding Lennon's right to report on a monthly basis.
- DD. not apply to the parties' agreement to allow Lennon to use Rogers' computer because it was contemporaneous with the written agreement.
19Dunne and Cook signed a contract requiring Cook to rebind 500 of Dunne’s books at 80¢ per book. Later, Dunne requested in good faith, that the price be reduced to 70¢ per book. Cook agreed orally to reduce the price to 70¢. Under the circumstances, the oral agreement is:
- AA. enforceable, but proof of it is inadmissible into evidence.
- BB. enforceable, and proof of it is admissible into evidence.
- CC. unenforceable, because Dunne failed to give consideration, but proof of it is otherwise admissible into evidence.
- DD. unenforceable, due to the statute of frauds, and proof of it is inadmissible into evidence.
20Which of the following provisions must be included to have an enforceable written residential lease?
I. A description of the leased premises
II. A due date for the payment of rent- AA. Both I and II
- BB. I only
- CC. II only
- DD. Neither I nor II
21Which of the following would be unenforceable because the subject matter is illegal?
- AA. A contingent fee charged by an attorney to represent a plaintiff in a negligence action
- BB. An arbitration clause in a supply contract
- CC. A restrictive covenant in an employment contract prohibiting a former employee from using the employers trade secrets
- DD. An employer’s promise not to press embezzlement charges against an employee who agrees to make restitution
22When there has been no performance by either party, which of the following events generally will result in the discharge of a party's obligation to perform as required under the original contract?
- AA. Accord and satisfaction
- BB. Mutual recission
- CC. Both accord and satisfaction and mutual recission
- DD. Neither accord and satisfaction nor mutual recission
23The statute of limitations for an alleged breach of contract:
- AA. does not apply if the contract was oral.
- BB. requires that a lawsuit be commenced and a judgment rendered within a prescribed period of time.
- CC. is determined on a case-by-case basis.
- DD. generally commences on the date of the breach.
24Which of the following offers of proof are inadmissible under the parol evidence rule when a written contract is intended as the complete agreement of the parties?
I. Proof of the existence of a subsequent oral modification of the contract
II. Proof of the existence of a prior oral agreement that contradicts the written contract
- AB. II only
- BC. Both I and II
- CD. Neither I nor II
- DA. I only
25On June 1, 20X1, Decker orally guaranteed the payment of a $5,000 note Decker's cousin owed Baker. Decker's agreement with Baker provided that Decker's guaranty would terminate in 18 months. On June 3, 20X1, Baker wrote Decker confirming Decker's guaranty. Decker did not object to the confirmation. On August 23, 20X1, Decker's cousin defaulted on the note, and Baker demanded that Decker honor the guaranty. Decker refused. Which of the following statements is correct?
- AA. Decker is liable under the oral guaranty because Decker did not object to Baker's June 3 letter.
- BB. Decker is not liable under the oral guaranty because it expired more than one year after June 1.
- CC. Decker is liable under the oral guaranty because Baker demanded payment within one year of the date the guaranty was given.
- DD. Decker is not liable under the oral guaranty because Decker's promise was not in writing.
26On August 1, Neptune Fisheries contracted in writing with West Markets to deliver to West 3,000 pounds of lobsters at $4.00 a pound. Delivery of the lobsters was due October 1 with payments due November 1. On August 4, Neptune entered into a contract with Deep Sea Lobster Farms that provided as follows: “Neptune Fisheries assigns all the rights under the contract with West Markets dated August 1 to Deep Sea Lobster Farms.” The best interpretation of the August 4 contract would be that it was:
- AA. only an assignment of rights by Neptune.
- BB. only a delegation of duties by Neptune.
- CC. an assignment of rights and a delegation of duties by Neptune.
- Dan unenforceable third-party beneficiary contract.
27Which of the following will release all original parties to a contract but will maintain a contractual relationship between the original parties?
- AA. Novation
- BB. Substituted contract
- CC. Both novation and substituted contract
- DD. Neither novation nor substituted contract
28On May 25, Fresno sold Bronson, a minor, a used computer. On June 1, Bronson reached the age of majority. On June 10, Fresno wanted to rescind the sale. Fresno offered to return Bronson's money and demanded that Bronson return the computer. Bronson refused, claiming that a binding contract existed. Bronson's refusal is:
- AA. not justified, because Fresno is not bound by the contract unless Bronson specifically ratifies the contract after reaching the age of majority.
- BB. not justified, because Fresno does not have to perform under the contract if Bronson has a right to disaffirm the contract.
- CC. justified, because Bronson and Fresno are bound by the contract as of the date Bronson reached the age of majority.
- DD. justified, because Fresno must perform under the contract regardless of Bronson's minority.
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