Business Law Ch 18

A discharge by agreement can occur in any of the following situations except: a. death of the obligor. b. accord and satisfaction. c. release. d. mutual rescision.

a. death of the obligor.

When performance is impeded due to the occurrence of an event whose nonoccurrence was a basic assumption of the contract, the contract may be discharged on the grounds of: a. commercial impracticability. b. commercial impossibility. c. economic frustration. d. economic stability.

a. commercial impracticability.

The death or disability of a party to a contract discharges the contract when: a. personal services requiring peculiar skill are involved. b. the payment of money is involved. c. a house is to be painted. d. all of these.

a. personal services requiring peculiar skill are involved.

A change of law discharges a contract if the new law: a. requires a license and none was required before. b. requires the use of fireproof materials. c. requires the use of antipollution devices. d. prohibits the act called for by the contract.

d. prohibits the act called for by the contract.

Which of the following is not an element of an accord and satisfaction? a. a bona fide dispute b. a proposal to settle the dispute c. performance of the agreement to settle the dispute d. reservation of rights under the federal Consumer Credit Protection Act

d. reservation of rights under the federal Consumer Credit Protection Act

The parties may decide that their contract is not the one they want. They may then replace it with another contract. If they do, the original contract is discharged by __________. a. solution b. elocution c. retribution d. substitution

d. substitution

A contract may be discharge in all of the following scenarios except: a. death or disability b. destruction of subject matter c. commercial impracticability d. weather conditions

d. weather conditions

A Federal Trade Commission regulation gives a buyer three (3) business days in which to cancel a home-solicited sale of goods or services costing more than: a. $25. b. $50. c. $100. d. $500.

a. $25.

In which case will performance on the exact date specified in the contract most likely be deemed essential? a. a sale of goods that fluctuate rapidly in value. b. a sale of goods that remain stable in value. c. a sale of real estate. d. a sale of goods where no harm results from a delay in performance.

a. a sale of goods that fluctuate rapidly in value.

A discharge by operation of law occurs in all of the following situations except: a. accord and satisfaction. b. material changes by a party. c. bankruptcy. d. statute of limitations.

a. accord and satisfaction.

When a debtor makes a payment to a creditor specifying how it should be applied, the creditor must apply the payment: a. as directed by the debtor. b. to the oldest outstanding debt. c. to the most recent outstanding debt. d. to the largest outstanding debt.

a. as directed by the debtor.

V3 was a successful singing group that contracted to perform at the "Metalsubstance" rock concert. V3 was aware that the promoter would sustain a substantial loss if the group failed to perform. The members of the group were stricken with a virus that confined them to their beds. The promoter sued for breach of contract. What is the probable result? a. V3 is liable for damages for breach of contract. b. The contract was discharged by impossibility of performance. c. In order to avoid liability for breach of contract, V3 must arrange for another group of comparable quality and reputation to perform on the scheduled date. d. V3 will be deemed to have substantially performed the contract.

b. The contract was discharged by impossibility of performance.

In most bilateral contracts, the performances of the parties are __________.

b. conditions subsequent

To avoid litigation over impossibility and impracticability issues, modern contracting parties often contract around the doctrine of impossibility, specifying the failures that will excuse performance in their contracts. The clauses in which they do this are called __________ clauses, and they are generally enforced by courts as written. a. delta force b. force majeure c. magnum force d. force corporeal

b. force majeure

If the parties to a contract agree to undo the agreement and return any consideration involved, the contract is discharged by: a. mutual cancellation b. mutual rescission. c. novation d. accord and satisfaction

b. mutual rescission.

An offer to perform is known as a(n) __________. a. rendering b. offering c. tinder d. tender

b. offering

A contract can be discharged by impossibility in all the following scenarios except: a. destruction of subject matter in a sales contract. b. performance under the contract becomes 25% more expensive due to currency fluctuations in construction contract. c. when the law changes. d. death of obligee in a personal services contract.

b. performance under the contract becomes 25% more expensive due to currency fluctuations in construction contract.

A homeowner who refinances her home mortgage may cancel the transaction: a. if the terms of the contract were less favorable than anticipated. b. within three business days. c. only if she was the victim of fraud. d. upon payment of a $1,000 penalty, as required by a Federal Trade Commission rule.

b. within three business days.

If no time period for performance is specified in a contract: a. the contract is unenforceable. b. time shall be of the essence. c. a reasonable time for performance will be implied. d. the time for performance will be ignored by the courts.

c. a reasonable time for performance will be implied.

Bankruptcy results in a discharge of contractual obligations by __________. a. default b. equity c. operation of law d. oath or affirmation

c. operation of law

The phrase "time is of the essence" means that: a. the court is in a hurry to dispose of the case. b. performance under the contract at the times specified in the contract is vital or essential. c. the contract expressly states that time is of the essence. d. the price stated in the contract is subject to change without notice.

c. the contract expressly states that time is of the essence.

Which of the following events excuses a promisor from performing his or her contractual obligations? a. a riot b. a shortage of materials necessary for production of goods and/or provision of services called for under the contract c. an unanticipated increase in the cost of performance d. destruction of the subject matter through no fault of either party

d. destruction of the subject matter through no fault of either party

Sales of goods transactions are subject to a statute of limitations period of: a. one (1) year. b. two (2) years. c. three (3) years. d. four (4) years.

d. four (4) years.