Accounting 324 Smartbook Questions for Exam 1 (1)
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CHAPTER 14 SMARTBOOK
Justin proposes to do woodwork for Joseph provided he agrees to the proposed terms within a week. Suppose Joseph calls Justin within a few hours and says, "Justin, I've found someone else to do my woodwork for the winter, and I won't be needing you." A day later Joseph changes
his mind and calls Justin and wants to hire him based on the previously discussed terms. This is
a valid: - Rejection The creation of a valid contractual offer requires what elements? - The intent of the offeror for an agreement, definite terms, and the offer must be communicated to the offeree
According to common law, a valid offer requires the intent to make an offer in response to an invitation to negotiate, definite and certain terms, and communication of the offer to the offeror. -
False, Reason: To have a valid offer under the common law, you need (1) the intent to be bound by an acceptance, (2) definite and certain terms, and (3) communication to the offeree.
If an offer is for a unilateral contract, the offeree can accept only by providing the requested performance. Suppose Bill offered to pay $500 to anyone who returned his lost dog to him. Mary
could accept by: - Returning the dog
As a general rule, a revocation of an offer is effective - when the offeree receives it Under common law, what are the necessary elements of a valid contractual acceptance? (Check all that apply.)
●
The intent of the offeree to be bound by acceptance of the contract.
●
The acceptance will have the definite and certain terms of the offer.
Who has the power to decide by what means an offer can be validly accepted? - the offeror In determining contractual intent, courts are concerned only with the parties' outward manifestations of intent, not their internal thought processes. - True, Courts interpret contracts using an objective standard, meaning the courts are concerned only with the parties' outward manifestations of intent, not their internal thought processes.
Absent a description in the offer of what form of communication must be used to form a valid acceptance, what methods of communication are generally accepted as reasonable?
●
Telephone communication
●
In-person communication
●
E-mail communication
If the offer merely authorizes certain modes of acceptance, but does not condition acceptance on the use of those modes, use of an unauthorized means of acceptance is: - Acceptable If nothing is stated to the contrary in terms of an auction, the auction is presumed to be without reserve. - False, If nothing is stated to the contrary in terms of an auction, the auction is presumed to be with reserve, which means that the seller is merely expressing intent to receive offers.
In a(n) auction without reserve
the seller is treated as making an offer to accept the highest bid and therefore must accept it.
In general, what are the ways an offeree can manifest intent to enter into a contract? (Check all that apply.)
●
By performance of the requested actions under the offer and the contract
●
By giving the offeror a return promise (e.g., a promise to pay contract value)
Under common law, what types of terms must be included in a valid contractual offer? - Material terms, all major items necessary for mutual consent that are clearly laid out
A valid contractual offer must be communicated to what party? (Check all that apply.)
●
The offeree
●
The agent of the offeree who is acting on behalf of the offeree
Death of the offeror will have what effect on a contractual offer? - It will cause the offer to be terminated.
Which party to a contract can revoke an offer at any time? - the offeror Promissory estoppel requires what form of contractual mindset? - Detrimental reliance on the offer
What is the term for an offer made by the offeree to the offeror proposing a substituted bargain differing from the original proposed offer? - a counteroffer What conditions would legally cause an offer to be immediately terminated? (Check all that apply.) ●
The offeror loses the legal capacity to be in a contract
●
Death of the offeror
If a contractual offer becomes illegal, what is status of the offer? - it is immediately terminated If there is no stated period when the offeree must accept or reject an offer, when will the offer expire? - The offer will expire after a reasonable period of time.
In general, what are the ways an offeree can manifest intent to enter into a contract? (Check all that apply.)
●
By giving the offeror a return promise (e.g., a promise to pay contract value)
●
By performance of the requested actions under the offer and the contract
In a bilateral contract, the offeror is expecting what action from the offeree? - a return promise As a general rule, silence cannot be used to form a contract.
Under the common law mirror-image rule, if an offer and acceptance do not have the exact terms in the contract, the acceptance is treated as a(n) - counteroffer
Under the mailbox rule, a revocation is effective: when it is received by the offeree
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Regarding contractual offers, which of the following statements best describes express authorization? - It is the specific mode of communication of acceptance that is stated in the offer. According to the Restatement of Contracts, if no mode of communication is specified in the offer, - any reasonable means of acceptance is valid
Who has the right to reject an offer? - The offeree only Which of the following is an element in the formation of a contractual offer? - The offer must include serious intent by the offeror to be bound to an agreement.
If an offer states that it is good for thirty days, what happens in thirty days if the offeree has not responded? - The offer terminates immediately.
Which of the following is not a basic common-law requirement for a valid acceptance? - The offeree's written acceptance, dispatched by certified mail, to the offeror
An agreement consists of an offer and acceptance What is the standard that courts use to interpret contracts? - objective An auction with reserve
means that the seller is merely expressing intent to receive offers.
Who can accept a valid offer that will create a binding contract? - only the offeree or his or her agent
Justin informs Joseph that he will not be able to accept the contract for doing woodwork for the winter at Joseph's farm because of prior commitments. A day later, Justin calls up Joseph and tells him the original terms of the contract are acceptable to him and he can take up the offer. Joseph tells Justin he would indeed like Justin to do the work; however, her will pay only $15 per hour rather than $18 per hour as mentioned in the original contract. This proposal made by Joseph illustrates a - counteroffer
If the subject matter of a contractual offer is destroyed, what is the status of the offer? - The offer is immediately terminated.
Under the mailbox rule, acceptance is valid: when it is mailed by the offeree
As a general rule, a revocation of an offer is effective: when the offeree receives the revocation
The means by which the offeree can communicate a valid acceptance to the offeror may be: ●
implied from the facts and circumstances surrounding the communication of the offer to the offeree
●
expressly stated in the offer
Suppose Jeremy offers a job to Carol but states in the offer, "I must receive your acceptance by e-mail before 5:00 p.m. on September 5." Carol puts her signed acceptance in the postal mail on September 3, but the acceptance does not arrive until September 7. Jeremy and Carol have:
no agreement, because Carol did not accept in the manner and time specified in the offer
What form of intent must an offeror have in creating a contractual offer? - intent to be bound by the offeree's acceptance CHAPTER 15 SMARTBOOK
A promise to refrain from doing something is sufficient: consideration
Which of the following is
true about a bilateral contract? (Check all that apply.)
-
A promise to perform has value.
-
A promise in exchange for a promise can be consideration.
In a bilateral contract, one party's consideration is the promise and the other party's consideration is the act. - false As a remedy, promissory estoppel is awarded regularly. - false
Every contract must be supported by the element of: consideration Which of the following is not
an type of consideration? - A promise to accept a gift
Promissory estoppel and contracts under seal are two exceptions to the common law rule requiring consideration.
Anna promises Elsa that she will clean Elsa's house and Elsa promises Anna she will pay Anna $100 when Anna is done. Which of the following is true
? (Check all that apply)
●
Anna and Elsa have formed a bilateral contract.
●
Anna and Elsa's promises are an exchange of something of value.
●
Anna's promise in exchange for Elsa's promise is sufficient consideration.
When does the court look at the adequacy of consideration in a contract? (Check all that apply.)
- If the court thinks that undue influence was used and If the court believes fraud occurred Which of the following are true
about a unilateral contract? (Check all that apply.) - It is a promise in exchange for performance and It is a real contract because it is a mutual exchange of value.
What are the conditions for promissory estoppel to occur? (Check all that apply.)
●
To avoid an injustice, the promise must be enforced.
●
A party reasonably relies on another's promise.
●
One party makes a promise and knows the other party will rely on it.
Sheila tells Ed that if Ed repairs her air conditioner by the end of the day, Sheila will pay Ed $500. Which of the following is true
? - Ed and sheila have entered into a valid unilateral contract
Phil tells Gloria that if she works for him full-time, he'll pay her $1,000 a week. As a result and based on Phil's promise, Gloria quits her job at the department store and puts a down payment on a car. When Gloria shows up at Phil's to start work, Phil tells her he's changed his mind about the full-time job. Which of the following is correct regarding this scenario? - The best way for Gloria to enforce Phil's promise is to assert promissory estoppel.
Currently, how many states will still enforce contract under seal even if it is not supported by consideration? - 10
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Which of the following is correct regarding adequacy of consideration and the enforceability of contracts? - The court does not weigh whether each party made a good bargain.
Which of the following is a correct
statement regarding a promise to refrain from doing something you are legally entitled to do? - A promise to not do something you are otherwise legally entitled to do is good consideration for a contract.
Andy is an artist and Jane runs a famous art gallery. Jane calls Andy and tells him she has seen
some of his work and likes it. She tells him to bring his newest paintings to her gallery and says "I promise that if I like them, I will show them in my gallery." Which of the following is true
? (Check all that apply.) - ●
Jane made an illusory promise.
●
Andy has no contract to compel Jane to show his paintings in the gallery.
Forrest hires Nadine to turn his basement into a family room for $50,000. About halfway through
the work, Nadine discovers for the first time that the wood in the floor of the basement is riddled with mold and all the wood must be removed and replaced. Nadine tells Forrest that it will cost him an additional $10,000 for this work. Which of the following is true
? - The mold was an unforeseen circumstance to the basement work, and it is lawful for Nadine to charge Forrest for the additional work.
Past consideration is no consideration at all. - true, Reason: A promise cannot be based on consideration provided before the promise was made. Past consideration is no consideration at all.
Wanda works for Acme Corporation. Part of her job, for which she was hired 10 years ago, is to prepare a monthly report of all transactions in her department. After 10 years, Wanda tells Acme
Corporation that she wants another $500 per month to prepare the reports. Which of the following is true
? - wanda has an existing contractual duty to prepare the reports When a person promises that they may do something if they want to, they have made a(n) illusory promise. Such a promise is not sufficient consideration
Performance of a duty you are obligated to do under the law is not good consideration. This is known as the preexisting duty rule If there is no dispute that money is owed, the debt is liquidated
In an accord and satisfaction, the accord is the new agreement to pay less than the creditor claims is owed and the satisfaction is the debtor's payment of the reduced amount
Under the Uniform Commercial Code (UCC), writing "paid in full" on a check for less than the full
amount of the debt owed will not be an accord and satisfaction unless the creditor inadvertently cashes the check and waits longer than 90 days to offer the debtor repayment in the same amount, or unless the - check is sent to a special address for disputed amounts per the creditor's request
Consideration, as a required contractual element, can be: a service or money
Performance of a duty you are obligated to do under the law is not good consideration.- true, reason: performance of a duty you are obligated to do under the law is not good consideration. Identify exceptions to the preexisting duty rule. (Check all that apply.)
●
UCC Article 2 (sale of goods)
●
Additional work required to fulfill the promised obligation
●
Unforeseen circumstances
CHAPTER 16 SMARTBOOK
Which of the following is true of severable contracts? (Check all that apply) - Their legal portion can be enforced by the court and They can be partially voided by the court.
Once sober, a previously intoxicated person can either ratify or disaffirm a contract entered into when he or she was intoxicated.
A divisible contract is also known as a(n) severable contract.
Which of the following terms refers to a contract that may have both illegal and legal portions, allowing a court to void the illegal portions and enforce the rest? - Severable
Which of the following statements is correct
regarding the legality and enforceability of contracts? - Both a contract that requires an illegal act for performance and a contract for an illegal purpose are unenforceable.
Capacity is an element of a legally binding: contract
Another term for contractual incapacity is: incompetence
Julie, a 16-year-old student, enters a three-year modeling contract with a local ad agency. After two months, she realizes that the modeling schedule is too hectic and interferes with her school and other activities. She does not want to continue modeling. Which of the following statements is true in the given scenario? - Julie can void the contract immediately.
When can a minor be given full legal capacity to enter into contracts? (Check all that apply.) ●
When the minor moves out of the parents’ house and begins supporting himself or herself
●
When the minor’s parents or legal guardians give up their right to exercise legal control over the minor
●
When the minor marries
Which of the following is a correct
statement regarding a minor's power to disaffirm or void a contract? - If a minor chooses to disaffirm a contract, he or she must void the entire contract.
Regarding contracts, the legal capacity of a party refers to - the mental ability to understand his or her rights
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Which of the following is a correct statement regarding a competent party's recourse against a minor who disaffirms when the consideration the minor received is damaged or destroyed? - The competent party has no recourse against the minor.
incapacity, or incompetence, is the possession of a mental or physical defect that prevents a natural person from being able to enter into a legally binding contract.
Minors can only enter into voidable contracts What does a minor need to do to disaffirm a contract? - Show an intention by words or action to rescind the contract
Which of the following statements is false regarding minors and necessaries? - Courts cannot consider a minor's financial and social status in determining what constitutes a necessary for the minor.
Which of the following is a correct statement regarding a minor's obligations on disaffirmance? - A minor's obligations on disaffirmance vary from state to state.
Ratification may be either - expressed or implied
Which of the following is a legally-recognized way to expressly ratify a contract? - After reaching
majority, a person states orally or in writing that he or she intends to be bound by the contract entered into as a minor.
Which of the following is a type of legal capacity a person suffering from a mental illness may have, depending on the nature and extent of their deficiency? - limited
Which of the following occurs when a former minor takes some action after reaching the age of majority consistent with the intent to ratify a contract? - implied ratification A contract overturned for illegal subject matter or for being illegal to perform is generally declared: void
Generally, parents are not liable for contracts entered into by their minor children.
Which of the following is a type of legal capacity a person suffering from a mental illness may have, depending on the nature and extent of their deficiency? - Full
Which of the following statements is correct
regarding the legality and enforceability of contracts? - Both a contract that requires an illegal act for performance and a contract for an illegal purpose are unenforceable.
In which of the following situations is a contract enforceable? (Check all that apply.) - A contract that can perform legally and A contract with a legal subject matter
In most states, minors, not their parents are liable for a minor's personal torts.
A severable contract is also known as a(n) divisible contracts What happens if a legal contract is formed and its subject later becomes illegal under a new statute? - Both parties are discharged from their obligations.
CHAPTER 17 SMARTBOOK
Without legal assent, a contract may be: Voidable A court ordered that a contract was voidable due to the lack of legal assent. The court also ordered that both parties must return what the other party had given to them. This scenario exemplifies the: rescission of a contract
Mistaken beliefs about the subjective value of an item affect the validity of the contract. - false In contract law, a mistake of fact is an erroneous belief about the facts of a contract at the time: the contract is concluded
A promise that the courts will require the parties to obey is known as: legal assent
A mistake of a material fact by one party is known as a(n): unilateral mistake
A contract that is voidable can be rescinded where the person canceling the contract is required
to return everything she gave the other party and return anything the other party gave to her.
If a unilateral mistake has been made about a material fact of the contract, the courts are hesitant to void the contract
Identify the major obstacles to legal assent. (Check all that apply.) - duress and misrepresentation
Which of the following conditions would permit a court to invalidate a contract on grounds of unilateral mistake? (Check ALL that apply.) - One party made a mistake about a material fact, and the other party knew about the mistake and The mistake was caused by an accidental clerical error.
An error by one party about a material fact, that is, a fact that is important in the context of the particular contract is called a(n) unilateral mistake
Which of the following would allow a court to invalidate a contract on the grounds of unilateral mistake - The mistake was so serious that the contract is unconscionable, that is, so unreasonable that it is outrageous. The mistake was caused by a clerical error that was accidental and did not result from gross negligence and One party made a mistake about a material fact, and the other party knew or had reason to know about the mistake.
The courts insist on a "meeting of the minds" to have a valid contract and even if a misrepresentation was innocent and without intent, the court will: rescind the contract
Before a contract can be voided for a mutual mistake, which of the following conditions must be met? (Check all that apply.
●
The mistake must have a material effect on the agreement.
●
The mistake must be about a basic assumption that affects the subject matter of the contract.
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●
The enforcement of the contract will have an adverse effect on the party who did not agree to bear the risk of the mistake at the time of the agreement.
Which of the following is correct regarding a contract based on an innocent misrepresentation? (Check all that apply.)
●
The misled party can rescind the contract.
●
The misled party cannot sue for damages.
An intentional and knowing false representation of a material act that is intended to mislead the other party is known as a(n): - fraudulent misrepresentation A false statement about a material fact that was based on an innocent belief that the false statement was true is a(n): innocent representation
Which of the following is considered a false assertion of fact? (Check all that apply.)
Which of the following is considered a false assertion of fact? (Check all that apply.)
●
A nondisclosure
●
An incorrect assertion
●
An act of concealment
Factors that are considered by a court in undue influence claims include all of the following: ●
The dominant party gained undue enrichment from the agreement.
●
The dominant party rushes the other party to consent.
●
The non-dominant party was isolated from advisers at the time of the agreement.
When one party is forced into an agreement by the wrongful act of another, it is known as: Duress
A false assertion of fact does not have to be an actual statement; it may also be an act of concealment or nondisclosure.
If a contract resulted from duress, the innocent party can opt to void the contract
A special relationship in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with that person's ability to make his or her own decision to enter into a contract is known as: undue influence
CHAPTER 18 SMARTBOOK One of the benefits of the statute of frauds is that it: makes contractual negotiations easier by ensuring all the specific terms of a contract are written and aware to all parties
A purpose of the statute of fraud is to: prevent unreliable oral evidence from interfering with a contractual relationship
What is a main purpose of the statute of frauds? To prevent parties from entering into contracts with which they do not agree
What must be done in relation to contracts involving an interest in land? - Contracts involving an
interest in land are covered by the statute of frauds, and as such, must be in writing.
When calculating the length of time it will take for performance of a contract to determine if the contract falls within the statute of frauds, the start date for calculating duration will be the day: after the contract is created
Identify a purpose of the statute of frauds. - To ease contractual negotiations by requiring sufficiently reliable evidence to prove the existence and specific terms of a contract
The test for compliance with the one-year rule considers the: possibility of completing the contract within one year
A benefit of the statute of frauds to enforcement of a contract is that it - prevents unreliable oral evidence from interfering with a contractual relationship.
To be considered exempt from the statute of frauds, a contract: must be possibly performed in one year, even if the performance is highly unlikely
One of the main purposes of the statute of frauds is to prevent parties from: entering into contracts with which they do not agree
If there is a property interest attached to a marriage contract, which of the following is true about
the contract? - the contract must be in writing What are the types of contracts that fall within the scope of the statute of frauds? (Check all that apply.)
●
Contracts related to an interest in real property
●
Promises made in consideration of marriage
Which of the following is correct regarding secondary obligations? (Check all that apply.)
●
They fall within the statute of frauds.
●
They involve a party outside the primary agreement. Unlike secondary obligations, primary obligations: do not need to be in writing Which of the following are not elements of a written agreement under the statute of frauds? (Check all that apply.)
●
The agreement must be signed by an agent, not the principal to the contract.
●
The agreement must be profitable for both parties.
Which of the following is not
a valid exception to the statute of frauds? - A contract that is unprofitable to both parties
Primary obligations are debts incurred in a(n) initial contract.
The exception to the statute of frauds that is applicable when a buyer of land has paid a portion of the sales price to prove the existence of a contract is: partial performance
A(n) admission is a statement made in court, under oath, or at some stage in a legal proceeding
in which one party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing.
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What section of the Uniform Commercial Code (UCC) requires contracts for the sale of goods in
excess of $500 to be in writing? - section 2 201
The partial performance exception to the statute of frauds covers contracts involving: a property interest
What are the elements of a written agreement under the statute of frauds? (Check all that apply.)
●
The subject matter of the agreement must be defined.
●
The parties to the agreement must be identified.
●
All pertinent terms must be listed in the agreement.
For promissory estoppel to apply, the agreement must: not otherwise be an enforceable contract
Which of the following are exceptions to the statute of frauds? (Check all that apply.)
●
Admission by one party to a contract
●
In an instance where promissory estoppel has been established
●
Partial performance on a contract
When is promissory estoppel in effect? - When the party's reliance is to his or her own detriment
Which of the following indicates an admission exception to the statute of frauds? - An admission
is a statement under oath or as part of a legal process in which a party being sued admits the existence of a contract.
What is the common law rule that bars the admission of oral testimony to prove agreement to certain terms if there is a written contract between the parties after the oral testimony occurs? - parol evidence rule What are the reasons why the partial performance exception to the statute of frauds could be applied? (Check ALL that apply.)
●
Partial payment for a contract involving an interest in land
●
A buyer has taken possession of a land interest as part of a contract
Promissory estoppel requires what major element to exist? - Detrimental reliance by the injured party
What are the elements of the promissory estoppel exception to the statute of frauds? (Check all that apply.)
●
The detrimental reliance of the injured party could have been foreseen by the other party.
●
One party detrimentally relied on an oral promise.
A written agreement under the parol evidence rule is presumed to be: complete
The exception to the statute of frauds that is applicable when a buyer of land has paid a portion of the sales price to prove the existence of a contract is: partial performance
Under the parol evidence rule, oral testimony is inadmissible to prove certain terms or agreement if it comes: ●
before the existence of a written contract.
●
at the same time as the execution of the written contract.
How many recognized exceptions are there to the parol evidence rule? - 8
Which of the following statements is true of the parol evidence rule? - It prevents evidence that substantially contradicts the agreement in its written form.
If the written contract has ambiguous terms, the court allows oral evidence for the purpose of: clarifying the contract
What is the common law rule that bars the admission of oral testimony to prove agreement to certain terms if there is a written contract between the parties after the oral testimony occurs? - parol evidence rule Whenever a written agreement contains a serious and obvious typographical error, parol evidence is admissible to demonstrate it was an error, as well as to set forth the proper term.
CHAPTER 20 SMARTBOOK
Which of the following refers to termination of a party's obligations under a contract? - Discharge Contracts containing conditions affecting the performance obligations of the parties are called conditional contracts Which of the following is not a type of contractual condition? - A qualified condition
A condition subsequent is a(n) future event that terminates the obligations of the parties when it occurs.
Which of the following are the most frequently awarded damages? - compensatory Discharge refers to termination of a party's obligations under a contract.
Which of the following is a type of contractual condition? - concurrent
Conditional contracts contain conditions affecting performance obligations of the parties.
What type of conditions are explicitly stated in a contract? - Express
A condition precedent is a particular event that must occur in order for a party's duty to arise.
Implied conditions are those that are not explicitly stated, but are inferred from the nature and language of the contract.
A condition subsequent is a future event that terminates the obligations of the parties when it occurs.
Discharge by performance refers to parties discharging their obligations by: - doing what they agreed to do
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Compensatory damages are intended to reimburse a plaintiff for his or her loss of the benefit of the bargain.
Today, courts generally require only substantial performance - true Concurrent conditions exist when the parties are to perform their obligations for each other: - simultaneously Which of the following occurs when nearly all of the terms of the agreement are complete; there has been an honest effort to complete all of the contract terms; and there has been no willful departure from the terms of the agreement? - substantial performance
What kind of conditions are typically preceded by words such as "conditioned on," "provided that," or "when?" - express
What occurs whenever a party fails to perform his or her obligations under the contract? - a breach
Express conditions are inferred from the nature and language of the contract. - false
What type of breach occurs when a party unjustifiably fails to substantially perform his or her obligations under the contract, thereby discharging the non-breaching party from his or her obligations under the contract? - material breach
Discharge by performance refers to parties discharging their obligations by doing what they respectively agreed to do under the terms of the contract.
Anticipatory repudiation refers to a situation in which - a contracting party decides not to complete the contract before the actual time of performance
Complete performance occurs when all aspects of the parties' duties under the contract are carried out: - perfectly Which of the following is not a means by which parties to a contract may agree to discharge each other from their obligations? - mutual remuneration
Which of the following conditions need not be satisfied for substantial performance? - The formation of a contract between a merchant obligor and a non-merchant obligee
Mutual Recession - refers to a situation in which parties agree that they simply wish to discharge each other from their mutual obligations and therefore cancel the contract.
A substituted contract immediately discharges the parties from their obligations under the old contract and replaces those obligations with the new obligations imposed by the substituted contract.
Which of the following is correct regarding a material breach of contract? - It is often difficult to know when a court is going to determine that a breach is material.
In an accord and satisfaction, it is the satisfaction that discharges the party.
Through which, if any, of the following ways may a breaching party convey an anticipatory repudiation to a non-breaching party? - Express indication of the intent to no longer perform or taking action that would be inconsistent with his or her ability to carry out the contract when performance is due
Regarding discharge by mutual agreement, discharge by novation refers to a situation in which: - the original parties and a third party all agree that the third party will replace one of the original
parties and that the original party will then be discharged
With a novation, original contract duties: - Remain
Which of the following refers to a situation in which parties agree that they simply wish to discharge each other from their mutual obligations and therefore cancel the contract? - Mutual Recession Which of the following terms indicates mutual consent by contracting parties to replace an old agreement with a new one? - Substituted Contract
Which of the following is not a situation in which a contract may be discharged by operation of law? - prefatory absolution
In an accord and satisfaction, the actual performance of the new duty is called the: - satisfaction
Which of the following terms refers to a situation when, before the actual time for performance, a contracting party decides not to complete the contract? - anticipatory repudiation \
If a seller, without the knowledge of the buyer, changes the price of the contract, the buyer can treat the contract as: - Terminated Sometimes the parties to the agreement want to replace one of the parties with a third party. This substitution of a party is called a: - novation
Typically, once a bankrupt debtor's assets are distributed to creditors, all of the debtor's debts are discharged. - true Sometimes a contract may be discharged not by anything the parties do but, rather, by: operation of law
Which of the following is not a type of monetary damages available in a successful breach of contract lawsuit? - Illusory Which of the following damages are foreseeable damages that result from special facts and circumstances arising outside the contract itself, and must be within the contemplation of the parties at the time the breach occurs? - Consequential If one party materially alters a written contract without the knowledge of the other party, courts have held that such alteration allows the innocent party to: - be discharged from the contract
Which of the following is the primary factor in determining punitive damages in a breach of contract case? - how much is necessary to punish the defendant
When a party files for bankruptcy, the court allocates the assets of the bankrupt debtor to creditors and then issues the debtor a discharge in bankruptcy
In a case where no actual damages resulted from a breach of contract, the court may award the
plaintiff which of the following? - nominal damages
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Damages specified as a term of a contract, before a breach of contract occurs, are called liquidated damages
Whenever possible, courts award monetary damages rather than some form of equitable relief
Courts do not allow a non-breaching party to intentionally increase his or her damages.
To be recoverable, consequential damages need not have been foreseeable.- False, Consequential damages are foreseeable damages that result from special facts and circumstances arising out of the contract itself. These damages must be within the contemplation of the parties at the time the breach occurs.
Which of the following statements are true regarding equitable remedies? (Check all that apply.)
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They grew out of the English court’s authority to fashion remedies when the existing laws did not provide any adequate ones.
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They are typically unique solutions specifically crafted to the demands of the situations.
Which of the following is correct regarding an award of punitive damages in a breach of contract
case? - Both the income and wealth of the defendant are relevant.
Which of the following damages represent a trivial amount of money (typically, $1 or $5), but serve to signify that the plaintiff has been wronged by the defendant? - nominal damages
Which of the following is not a common equitable remedy? - subrogation What constitutes the termination of a contract? - rescission What type of remedies are typically unique solutions specifically crafted to the demands of the situations? - Equitable Specific performance is sometimes called specific: - enforcement Which of the following is correct regarding punitive damage awards in breach of contract cases?
- Punitive damages are rarely awarded in breach of contract cases.
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In a case where no actual damages resulted from a breach of contract, the court may award the
plaintiff which of the following? - nominal damages
Rescission is the termination of the contract, while restitution is the return of any property given up under the contract.
Which of the following is an order requiring that the breaching party fulfill the terms of the agreement? - specific performance
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