16/17/18

Which of the following would be considered a material breach of a contract? A, B and C would all be considered a material breach. C. A landscape company has been hired under a contract to landscape the front and back yards of a home. The landscape company only landscapes the front yard and refuses to finish the backyard. A. Partial performance that omits some essential part of the contract. A construction contract whereby the builder has completed 98% of the work and the only remaining items are minor. B. Delivery of only 80 desks under a contract that requires 100 desks.

A, B and C would all be considered a material breach.

Which of the following statements is FALSE? After an effective assignment of rights, both the assignor and the assignee have a right to the obligor's performance. Contract rights are generally assignable. After an effective assignment of rights, only the assignee may enforce those rights against the obligor. An assignment that is without consideration is revocable by the assignor.

After an effective assignment of rights, both the assignor and the assignee have a right to the obligor's performance.

Presume Elon Musk entered into a contract to speak at Harvard's graduation ceremony for a fee of $100,000. Elon's intent is to donate the fee to a non-profit for the beneift of young children. Which statements is/are FALSE? If the contract did not specifically prohibit assignment, then Mr. Mush could assign the right to receive payment and delegate the duty to speak without being in breach of the contract. Mr. Musk could assign the entire contract to another speaker if he had a scheduling conflict and NOT be in breach of his contract with Harvard. The non-profit would be a donee beneficiary and could sue Mr. Musk for breach of contract if he did not speak as agreed. All of these statements are FALSE.

All of these statements are FALSE.

JoJo decided to buy a restaurant building but the interior of the facility was not to her liking. She hired Discount Floors to install commercial quality carpet. In a separate contract, JoJo also hired a talented local artist, Amy, to paint a detailed, custom mural on the lobby wall. Finally, she made another agreement with Fashion Fabrics to re-upholster all the cloth-covered chairs. Regarding these contracts, which is FALSE? All three of these contracts would be governed by the UCC so JoJo could demand perfection in their performance. JoJo could NOT obtain specific performance to force Amy to complete the mural if Amy quits when she is half-way done painting. Under the contract between JoJo and Discount Floors, Discount Floors could delegate the installation of the carpet but would still be responsible if the work was not done properly. Of the three contracts described in the problem, the painting of the mural would be most likely to be subject to the subjective satisfaction of JoJo.

All three of these contracts would be governed by the UCC so JoJo could demand perfection in their performance.

Which of the following duties would be most likely to not be delegable? John has a contractual duty to pay Isaac $50. Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1. Jeffrey has a duty to mow Georgia's lawn at least once a week. Arthur has a duty to teach an accounting class at a community college during the fall semester.

Arthur has a duty to teach an accounting class at a community college during the fall semester.

Outdoor Adventure contracted with Kevin to serve as a guide for Kevin on his three-week fishing trip to Canada. The contract was made, and the trip booked on April 1 with the trip to begin on June 1. On May 1, Kevin notified Outdoor Adventures that he had changed his mind and would be unable to make the trip. He also refused to pay Outdoor Adventures any compensation. C. Outdoor Adventures may sue immediately or wait until June 1 to see if Kevin will perform his contractual duties. B. Kevin has anticipatorily repudiated the contract and may be liable to Outdoor Adventures for any damages. A. Because the contract is executory, Outdoor Adventures has suffered no damages, and Kevin has not obligation to pay any compensation. The answers labeled as B and C are correct.

B. Kevin has anticipatorily repudiated the contract and may be liable to Outdoor Adventures for any damages. C. Outdoor Adventures may sue immediately or wait until June 1 to see if Kevin will perform his contractual duties.

Owen was the owner of a shopping mall encumbered by a mortgage securing Owen's promissory note to BigBank. Paul purchased the building that was subject to BigBank's mortgage. As a result of the sale to Paul: BigBank is not a third party creditor beneficiary. Owen was automatically released from any liability on the note. BigBank is a third party creditor beneficiary. Paul is liable to BigBank for any deficiency resulting from a default note.

BigBank is not a third party creditor beneficiary.

Creditor Beneficiary

Can enforce contract against both parties to the original contract.

Donee Beneficiary

Can only enforce contract against 1 party to the original contract.

Carl, a contractor, and Lyle, a landowner, have a contract whereby Carl is to perform routine construction services according to the blueprints that Lyle has provided. Carl assigns the contract including, Carl's rights and duties under the contract, to David, a developer. As a result of this assignment: Assume that Carl's services are NOT personal to Carl. Carl no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform. Carl has no more rights or duties with regard to the contract. Carl has all of his rights under the contract, but he has no responsibility for the performance of the duties. Carl has all of his rights under the contract and he is still responsible for the performance of the duties.

Carl no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform.

Buster owns a company and obtains a loan from Bank. Buster sells his company to David and David agrees to assume the debt the company owes to the Bank. The Bank is a

Creditor Beneficiary

Veronica entered into a contract with a local car dealer to have a new convertible sports car delivered to her daughter, Jasmine, as a college graduation present. In this contract, Jasmine is a

Donee Beneficiary

Which of the following statements related to liquidated damages clauses is TRUE? If the court finds the liquidated damages clause to be a penalty, the court will not enforce the clause and the non-breaching party may Not recover any damages. If the court finds the liquidated damages clause is a penalty, the court will not enforce the clause, but the non-breaching party may Recover other types of monetary damages. A liquidated damages clause is appropriate when the actual amount of damages related to a breach would be easy to prove. A court will uphold a liquidated damage clause even if it is an unreasonable approximation of damages (a penalty) related to a future breach because the parties agreed to the clause.

If the court finds the liquidated damages clause is a penalty, the court will not enforce the clause, but the non-breaching party may recover other types of monetary damages.

The doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident.

Incidental Beneficiary

In which of the following situations would the assignment by the Assignor to an Assignee be effective? Little Bear Corp. enters into a contract to buy all of their requirements for water from Bluebonnet Water Supply for a 1 year period. Bear is a manufacturer and uses around 10,000 gallons a month in their manufacturing process. Two months after entering into the contract with Bluebonnet, Bear goes out of business and assigns Bear's rights under the Bluebonnet contract to Big Bear Corp. who uses around 50,000 gallons a month. Marigold Corp. receives a loyalty discount on Marigold's purchases of flowers from Bruiser Inc. under a contract that expires in 6 months. Marigold buys in bulk and has been a loyal and paying customer of Bruiser for 10 years. Marigold no longer needs to buy flowers, but wants to take advantage of the pricing under the Bruiser contract. Marigold assigns the contract with Bruiser to Daisy Inc. who has never done business with Bruiser. John assigns a contract to Natalie. The contract contains the following provision: "This contract and the rights that arise hereunder shall not be assigned without the prior written consent of the other party and any attempted assignment shall be void." John assigns a contract to Natalie. The contract contains the following provision: "This contract shall not be assigned without the prior written consent of the other party."

John assigns a contract to Natalie. The contract contains the following provision: "This contract shall not be assigned without the prior written consent of the other party."

Which one of the following assignments would probably be prohibited by a court? Mary has been a loyal customer of Best Buy for 20 years. In exchange for her loyalty, Best Buy gives Mary free shipping and a 20% discount for life. Mary assigns these loyalty rights to John for $50. John is a house painter. He is scheduled to paint Molly's home on Monday. John wakes up Monday morning with a stiff neck. He calls Ed, who is also a painter, to begin the job at Molly's. Ron has a contract with Bonett Bank to service their coffee machines. He assigns the remainder of his contract with Bonett to Michelle, who also owns a coffee service. All of these.

Mary has been a loyal customer of Best Buy for 20 years. In exchange for her loyalty, Best Buy gives Mary free shipping and a 20% discount for life. Mary assigns these loyalty rights to John for $50.

Under the UCC, to determine if a material breach has occurred under a contract, the test known as __________________ is applied.

Perfect Tender Rule

Olson, as buyer, entered into a real estate purchase contract with Sam, as seller. The real estate purchase contract contained the following clause, "No party to this contract may assign this contract and/or their rights arising hereunder, without the prior written consent of the other party." Olson assigns the contract to Nancy. What is the most likely outcome? Sam will have to sell the property to Nancy, but Sam may sue Olson for breach of contract. Sam will not have to sell the property to Nancy or Olson. Sam will have to sell the property to Nancy and cannot file a breach of contract claim against Olson. Sam will have to sell the property to only Olson, since assignment was prohibited.

Sam will have to sell the property to Nancy, but Sam may sue Olson for breach of contract.

Which of the following statements is FALSE? ALERT: THIS QUESTION IS ASKING WHICH STATEMENT IS FALSE! Injunction requires a contract party to stop doing something. Specific Performance requires a contract seller to deliver the unique item contracted for to the Buyer. Specific Performance is available in a contract for services. Reformation allows a court to rewrite or correct a contract to conform to the true agreement.

Specific Performance is available in a contract for services.

Which one of the following assignments would probably be prohibited by a court? Stanley and Bob have entered into an agreement whereby Bob agrees to provide Stanley will all of Stanley's requirements for cleaning materials. Stanley's business has one location and is only 3,000 square feet. Stanley assigns this contract to Susan, who has five locations, each over 10,000 square feet. A owes B $50. B assigns to C the right to collect the money. Paul assigns a real estate purchase agreement to Connie. Jeremy assigns the leases from his apartment complex to the bank.

Stanley and Bob have entered into an agreement whereby Bob agrees to provide Stanley will all of Stanley's requirements for cleaning materials. Stanley's business has one location and is only 3,000 square feet. Stanley assigns this contract to Susan, who has five locations, each over 10,000 square feet.

When a contract party sues the other party for breach of contract, that plaintiff will incur attorneys' fees and court costs to pursue that lawsuit. Which of the following is CORRECT regarding the ability to obtain reimbursement for attorneys' fees and court costs spent by the prevailing party to a lawsuit? Punitive damages have to also be awarded in a breach of contract suit for the prevailing party to be awarded reimbursement of their attorneys' fees and court costs. The prevailing party will have a better chance to recover attorneys' fees and court costs If the contract allows the prevailing party to recover such fees and costs. The prevailing party in a breach of contract suit will always be reimbursed attorneys' fees and court costs from the losing party. All of these answers are CORRECT.

The prevailing party will have a better chance to recover attorneys' fees and court costs If the contract allows the prevailing party to recover such fees and costs.

Which of the following statements is TRUE regarding a Time is of the Essence Clause? Under the Common Law, if a Time is of the Essence Clause is included in the Contract and one party does not meet a deadline subject to such clause, that failure to meet a deadline will be considered a material breach discharging the performance of the other party and entitling the non-breaching party to sue for damages. Under the Common Law, if a Time is of the Essence Clause is included in the Contract and one party does not meet a deadline subject to such clause, that failure to meet a deadline will result only breach of contract entitling the other party to sue for damages. Under the Common Law, if a Time is of the Essence Clause is included in the Contract and one party does not meet a deadline subject to such clause, that failure to meet a deadline will be considered a material breach discharging the performance of the other party, but the non-breaching party cannot sue for damages. Under the UCC, if a Time is of the Essence Clause is NOT included in the contract, one party's failure to meet a deadline, will not constitute a material breach.

Under the Common Law, if a Time is of the Essence Clause is included in the Contract and one party does not meet a deadline subject to such clause, that failure to meet a deadline will be considered a material breach discharging the performance of the other party and entitling the non-breaching party to sue for damages.

Which of the following statements is CORRECT regarding breach of contract? To fully compensate a plaintiff for losses suffered for a breach of contract, punitive damages are always awarded. If Smith and Jones designated in their contract an amount to be paid in the event of a breach and the amount is found to be so high it is considered a penalty, the injured party will be left with no legal remedy. If a manufacturer of plain white copy paper fails to perform a contract, the buyer would typically be entitled to the remedy of specific performance. When a breach of contract occurs, the non-breaching party is required to take reasonable steps to lessen or mitigate the damages that he/she may sustain. If a contract party tenders full performance, but does not actually fully perform, that party will be held to be in breach of the contract.

When a breach of contract occurs, the non-breaching party is required to take reasonable steps to lessen or mitigate the damages that he/she may sustain.

Dillon agreed to design a website for Sigma Kitty Kat and gave them a 20% discount because they were a non-profit organization. Dillon did not fully perform; however, his failure to complete the work was a minor deviation from the contract. Sigma Kitty Kat can get the remaining work done for $200. As a remedy, Sigma Kitty Kat will: Will owe Dillon the discounted contract price less the $200 needed to complete the work. be required to pay the full agreed contract price since the value of the work received was greater than the full agreed contract price, due to the discount. NOT be required to pay anything to Dillon, since Sigma Kitty Kat was not completely satisfied with the work. NOT be required to pay anything since Dillon breached the contract.

Will owe Dillon the discounted contract price less the $200 needed to complete the work.

Mindy goes to her broker, purchases 300 shares of Apple stock, and instructs the broker to register the stock in her husband Jim's name. The stock is intended as a Christmas gift from Mindy to Jim. Related to the contract between Mindy and her broker, Jim becomes: an assignee an intended donee third party beneficiary an intended creditor third party beneficiary an incidental third party beneficiary

an intended donee third party beneficiary

Harold hired Blake Painters to paint his house. Blake decides he has too many jobs and delegates the duties to the Andrews Company. If Andrews does a poor job, and drips paint on Harold's flowers and windows, Harold: can sue Blake, but he cannot sue Andrews. can sue both Blake and Andrews. can sue Andrews, but he cannot sue Blake. cannot sue, because he has accepted the benefits of the assignment.

can sue both Blake and Andrews.

Match the type of third party beneficiary with who, if anyone, the third party beneficiary can the contract against. Incidental Beneficiary

cannot enforce contract

Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):

creditor beneficiary

Darrell owns a parcel of land that he purchased by obtaining a loan from the First National Bank, and the loan has not been paid off yet. Darrell agrees to sell the land to Paul for $50,000. Darrell and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Darrell, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Darrell will be discharged from all further liability on the mortgage. In this case: the bank is a third party donee beneficiary. the bank can collect from Darrell if Paul defaults. Darrell is a third party beneficiary of the agreement between Paul and the bank. the agreement among the three is a novation.

the agreement among the three is a novation.