Business Law, 8e: Chapter 15

Chapter 15
Contractual Discharge and Remedies:

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1. If the parties to a contract expressly state that time is of the essence, a court is bound by such statement.: a. True
b. False

2. Substantial performance is technically a minor breach of contract.: a. True
b. False

3. Generally, contracts are discharged by the performance of the terms of the contract.: a. True
b. False

4. A contract can be discharged by the expiration of the time period specified in the contract.: a. True
b. False

5. Significant extra expenses can satisfy impossibility of performance under common law.: a. True
b. False

6. A person who substantially performs a construction contract is not liable to the innocent party for damages.: a. True
b. False

7. The modern trend is for courts to hold that when an agreement requires satisfaction of the other party regarding the acceptance of an act, a reasonable-person standard is used.: a. True
b. False

8. By operation of law, a party can be discharged in bankruptcy from debts.: a. True
b. False

9. A remedy for specific performance asks a court to order a party to comply with the contractual provisions.: a. True
b. False

10. Generally, the non-breaching party must take affirmative steps to prevent the escalation of the losses brought about by the breaching party.: a. True
b. False

11. Myron, a contractor finished building a house for Becky, except that he failed to paint the trim on the house. If Becky refuses to pay and Myron sues, the likely result would be:: a. Myron would lose as he has not fully performed his contract responsibilities.
b. Myron would lose unless Becky agreed to this contract modification.
c. Myron would recover the full contract price as he substantially performed.
d. Myron would recover the contract price less the amount needed to paint the trim because of substantial performance.

12. If there is a war or embargo and the costs of performing a contract have unforeseeably risen so unexpectedly and dramatically that performance would result in a substantial loss, the contract may be discharged on the grounds of:: a. common-law rule.
b. frustration of purpose.
c. commercial impracticability.
d. economic stability.

13. Muriel ordered a new green sport utility vehicle from Rich's Motors. When the time for delivery came, her new vehicle wasn't delivered and Rich's couldn't guarantee when it would be delivered. As such, she agreed to take a blue sport utility vehicle that Rich's had in stock. This transaction would be called:: a. a release.
b. an accord and satisfaction.
c. a novation.
d. a discharge by operation of law.

14. A party who expressly declares that performance will not be made when required has engaged in a(n):: a. negotiating technique.
b. waiver of breach.
c. anticipatory repudiation.
d. injunction.

15. A contract provision that limits the liability of one of the parties in the event of breach is called a(n):: a. liquidated-damages clause.
b. exculpatory clause.
c. waiver.
d. exemplary clause.