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chp 9

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3 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 7) The principle of substantial performance can best be described as when A) all or most of the contractual obligations are fulfilled. B) a major term of the contract is mostly fulfilled. C) minor terms of the contract are yet to be fulfilled. D) minor terms of the contract are disregarded. E) only exact compliance with the contract will qualify as performance.

A Diff: 1 Type: MC Page Ref: 277 Topic: Ch. 9 - Discharge by Performance Skill: Recall Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

8 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 18) Which of the following statements is correct with respect to breach of contract? A) When a condition is breached, the victim can treat the contract as ended. B) When a condition is breached, a person can only sue for damages but must perform their part of the contract. C) When a warranty is breached, the victim can treat the contract as ended. D) When a contract for the purchase of goods is breached, the warranty will require that the goods be repaired by the seller. E) When a contract is repudiated before performance is due, the victim must wait until the time of performance before taking any action.

A Diff: 1 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

32) A term in a contract that says that on the occurrence of a specific event the parties' obligations will end is an example of a A) condition subsequent. B) condition precedent. C) discharge by frustration. D) tender of performance. E) discharge by agreement.

A Diff: 1 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

36) When a contract anticipates some catastrophic event, such as a riot, invasion, earthquake, or flood that will interfere with the performance of the contract, this is referred to as a A) force majeure clause. B) condition precedent. C) "subject to" clause. D) condition subsequent. E) frustration clause.

A Diff: 1 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

74) Alan entered into a written contract for the purchase of a house owned by Joe. As the time to move approached, Alan discovered that Joe was refusing to move out and refusing to transfer the property. Apparently a dissatisfied customer had driven through the showroom window of Joe's new car dealership, causing him considerable expense. Joe could no longer afford to purchase the new luxury home into which he had intended to move. Which of the following is the appropriate remedy in these circumstances for Alan, who really wants the house? A) Specific performance B) Damages C) Injunction D) No remedy E) Rescission

A Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

9) The case of Sail Labrador Ltd. v. Challenger One (The) involved an option to purchase and a breach of a contract that was inconsequential and immediately corrected. What did the Supreme Court of Canada hold? A) The contract had been substantially performed and the option was still available. B) The breach, although minor, rendered the contract unenforceable. C) The breach, although minor, rendered the contract voidable at the option of the non-breaching party. D) The contract had not been perfectly performed, so the contract was void. E) No breach can be considered inconsequential at law.

A Diff: 2 Type: MC Page Ref: 278 Topic: Ch. 9 - Discharge by Performance Skill: Recall Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

19) Which one of the following is false with regard to exemption (exclusion) clauses? A) Such clauses are prohibited in any sale of goods contract. B) To be part of the contract, such clauses must be brought to the attention of the parties before or at the time of contract. C) Even if there is an exemption clause in the contract, the court can hold that the exemption clause is of no effect if the breach is a fundamental breach. D) Where there is an exemption clause in a contract, the court will strictly construe that clause; i.e., the wording of the clause must cover the situation that occurred. E) An effective exemption clause is a barrier blocking the party wronged from his or her remedy, e.g., from damages.

A Diff: 2 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

9 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 20) When an anticipatory breach has taken place (where a person, before performance is due, states that he will not perform the contract) A) the victim may sue immediately and not wait to see if the contract is performed or not. B) the victim must wait to see if the contract is performed, but damages are calculated from the time of the refusal. C) the victim can get someone else to do the job but then cannot sue the original party to the contract if it costs more. D) such a statement made before performance is due has no effect on the contractual obligations of the parties. E) the victim may not be able to recover damages that occur after the anticipatory breach.

17 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 37) Connie enters into an agreement with Razmin, a local artist, to showcase a particular one of her sculptures at a prestigious art show. The day before the show, the gallery where the sculpture was being stored burns to the ground. Which of the following represents the most likely outcome? A) The contract has been discharged through frustration. B) Razmin has breached the contract by failing to deliver the sculpture. C) Razmin can simply provide a different sculpture to satisfy the contract. D) Connie will still need to pay Razmin the same price agreed to in the contract because the fire was not Razmin's fault. E) The contract is void.

A Diff: 2 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

72) Which of the following is true with regard to remedies for breach of contract? A) The amount of damages to be given to the victim of the breach may be limited to the amount specified in a liquidated damages clause of her contract. B) The victim of a breach can recover damages that he could have avoided if he had tried to mitigate his loss. C) A person who breaches a contract is liable for all the loss that directly and naturally flows from the breach, no matter how unforeseeable. D) An injunction is an equitable remedy forcing a person to comply with the terms of the contract. E) Specific performance is the proper remedy to stop a person from doing something that he had promised in the contract not to do (e.g., not to compete, not to disclose secrets, etc.).

A Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

68) Which of the following is false with regard to remedies for breach of contract? A) Damages are awarded for a breach of a condition (essential term), but not for a breach of a warranty (non-essential term). B) The amount of damages to be given to the victim of the breach depends on the knowledge of the party who breached the contract. Knowledge includes imputed and actual knowledge. C) The victim of a breach cannot recover damages that he could have avoided if he had tried to mitigate his loss. D) An injunction is the proper remedy to stop a person from doing something that he had promised in the contract not to do (e.g., not to compete, not to disclose secrets, etc.). E) Specific performance is an equitable remedy forcing a person to comply with the terms of the contract.

A Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

80) Specific performance involves a court order to do something (to perform the contract), whereas a(n) ________ usually involves an order to refrain from some offensive conduct. A) injunction B) damages award C) equitable remedy D) quantum meruit award E) limitation period

A Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

58) Ibolya entered into an employment contract with a Toronto advertising firm, VertaNet Ltd. The agreement included a non-competition clause that prevented her from participating in the advertising field in Toronto for five years after termination of her employment. In the event of a breach, the contract provided that Ibolya would have to pay VertaNet the sum of $500,000 as liquidated damages. Ibolya worked for VertaNet for a period of time, then took another job in Vancouver where she worked for four and half years. Six months before the expiry of the fiveyear period in her VertaNet contract, Ibolya returned to Toronto to take a part-time position at a small advertising firm. Although VertaNet did not suffer any damage, VertaNet sued Ibolya claiming $500,000. What is the likely outcome? A) The non-competition clause is likely a penalty and therefore unenforceable. B) Although the amount claimed is unconscionable, the clause will be enforced as it is writing. C) Non-competition clauses generally are void as not being in the public interest. D) Liquidated damages clauses are illegal and therefore void. E) Unless the $500,000 had been prepaid, Ibolya has no good defence.

A Diff: 3 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

70) Sam entered into a contract for the purchase of a used dump truck from Joe's Heavy Duty Trucks. The written contract clearly specified, among other things, that "it shall be a warranty to this contract that the truck has the capacity of carrying and properly dumping loads of up to 4000 kg of gravel." In fact, when Sam loaded the truck with 4000 kg of gravel, he discovered that the hoist on the truck was not capable of dumping it. Only if the load was reduced to 3000 kg could the gravel be dumped. Sam obtained an estimate stating that it would cost $8000 to reinforce the hoist mechanism of the truck so that it could handle dumping 4000 kg of gravel. When Sam approached Joe demanding satisfaction, Sam pointed out another term of the agreement that stated that in the event of a breach of contract the "maximum damages payable to the purchaser are limited to $5000." Sam sued. Which of the following statements is correct with respect to the legal position of the parties? A) Sam must keep the truck and sue for damages, but those damages are limited to $5000. B) Sam can treat his obligation as over, return the truck, and demand the return of his purchase price. C) Sam must keep the truck but can obtain the $8000 in damages or what it takes to repair the hoist mechanism. D) Sam can get an order of specific performance, which will force the seller, Joe, to fix the truck even if it does cost $8000. E) There is nothing Sam can do as this was a breach of warranty.

A Diff: 3 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

23) Which one of the following statements accurately describes the operation of a condition precedent? A) This occurs when one party shows up at the right time and place ready, willing, and able to carry out his obligations under the contract. B) This is a term in a contract that must be met before the contract becomes fully operational. C) This occurs when some event that the parties have not anticipated makes performance radically different from what they agreed to. D) There is no such thing recognized in the common law. E) This is a term in a contract that provides for the cessation (ending) of the parties' obligations upon the occurrence of some particular event.

B Diff: 1 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

5 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 12) In the case of an anticipatory breach A) you have the right to demand the other side to perform, but you will not be required to perform yourself. B) you have the right to demand performance or to sue for breach. C) you must wait until the actual breach occurs before you can take any steps. D) the contract is declared void ab initio. E) the contract is unenforceable by either party.

46) Where one party refuses to perform his contractual obligations, what is the risk that the second party runs if he continues to press the first party to perform? A) The first party may continue to refuse to perform, and there is nothing the second party can do about that. B) The contract may be discharged by frustration. C) The first party might expressly repudiate the contract and therefore not be liable for breach. D) The first party might breach a condition subsequent. E) The second party might receive more damages for which he can't recover compensation.

B Diff: 1 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Recall Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

31 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 65) Harry agreed to make a new violin for Ted at a particularly attractive price. Before he finished crafting it, however, an opportunity arose to work as a salesman for Joe's Fine Cars. Since it was clear that he could never make a living as a violin maker, he took the job and refused to finish the violin for Ted. Which of the following is the appropriate remedy in these circumstances? A) Specific performance B) Damages C) Injunction D) No remedy E) Rescission

B Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

64) Sam agreed to purchase and Joe agreed to sell a brand new Chrysler 300 that was displayed in the showroom at Joe's Fine Cars. But instead of delivering it to Sam, Joe sold it to another customer who offered him more money. Which of the following is the appropriate remedy in these circumstances? A) Specific performance B) Damages C) Injunction D) No remedy E) Rescission

B Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

34 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 71) Which of the following is one of the remedies generally available for a breach of contract? A) Repudiation B) Specific performance C) Punitive damages D) Anticipatory breach E) Novation

B Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

79) ________ occurs when the court orders the defaulting party to live up to the terms of the contract. A) An injunction B) Specific performance C) An accounting D) Quantum meruit E) Compensation

B Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

4 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 10) In Meditek Laboratory Services Ltd. v. Purolator Courier Ltd., a Purolator employee delivered equipment to the wrong address and then falsified documents. In a subsequent lawsuit, Purolator relied on an exemption clause that limited its liability "whether or not from negligence or gross negligence." What properly described the outcome in this case? A) The falsification of documents was done by the employee, not the company itself, so Purolator could not be liable. B) The falsification of documents was wilful, not negligent, so Purolator was not protected by this clause. C) The exemption clause protected Purolator because of the principle of "freedom to contract." D) The exemption clause was severed as being an illegal restraint of trade. E) The exemption clause was not applied, because it was not evidenced in writing.

B Diff: 2 Type: MC Page Ref: 283 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

4) Which of the following is false with regard to ending a contract by agreement? A) A contract can be ended by the happening of a "condition subsequent" provided for in the contract. B) A contract can be ended by one party if he finds a better deal (e.g., by cancelling an order that has been accepted), as long as this is done before performance. C) A contract can be ended by agreement if neither party to the contract has performed his or her obligation. D) A contract can be ended by agreement if one party has performed his obligation and agrees to take something as satisfaction from the other although that other hasn't performed according to the contract. E) A contract can be ended by agreement by "mutual release."

B Diff: 2 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

19 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 41) In a jurisdiction other than B.C., Mr. Buyer sued Mr. Seller for breach of contract because Mr. Seller failed to deliver a computer system on time in accordance with their contract. Mr. Seller argued that he was not in breach and that the contract had been frustrated. The computer had been destroyed by water when a careless driver knocked over a fire hydrant outside the warehouse holding the computer. No deposit had been paid. The court held that the contract was frustrated. Based on this ruling, how does the court handle the situation? A) Buyer will succeed against Seller for damages because the court will treat it as if it were an anticipatory breach. B) The court will let the losses lie where they fell, despite any of Seller's costs in preparing the computer system. C) Buyer will not have to pay anything to Seller unless Seller had requested a deposit at the time of contract. D) The court will look at the costs incurred and any payments made, and will apportion the losses between the parties. E) The court will treat the contract as if there were a common mistake about the existence of the subject matter.

B Diff: 2 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

40) Which of the following would most likely result in the court finding the contract had been discharged by frustration? A) Cooper contracts to deliver ten bushels of ripe tomatoes to Haig's restaurant, but Cooper's tomato crop is destroyed by hail a few days before the delivery date. B) McGee contracts to give a lecture at a convention on modern marketing, but the convention is cancelled because of an epidemic. C) Moore, a sculptor, was delivering a $15,000 work when he lost control of the car and the work was crushed. He had been drinking heavily and had not bothered to wrap or box the work. D) Binks agreed to purchase a business from Kealy, but Binks suffered such great losses in the recent stock market crash that he couldn't afford to go through with it. E) McDonald agreed to buy Thornburn's horse, but unknown to both of them, at the time the contract was made the horse was dead.

B Diff: 2 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

48) In all but one of the following situations, the contract is frustrated. Identify the exception. A) Wacky had contracted to supply a health-food store jars of melatonin, a hormone now thought to be a miracle potion. After the contract but before the delivery, the government banned the sale of melatonin so that it could be properly tested under government auspices. B) Craig, a trucker with whom you contracted last month to transport stoves tomorrow, phones to tell you that his truck has broken down. C) Tracey contracted to sing at a local club on March 10, but that morning the club was destroyed by lightning. D) On December 1, Pak contracted to buy Scott's horse, to be delivered day December 10. On December 8, the horse contracted rabies and had to be destroyed. E) You agree to paint Joe's house on the following Tuesday, but on the Monday before, through no fault of either party, the house is destroyed by fire.

B Diff: 2 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

23 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 49) Mr. Jones rented an apartment to Ms. Smith under a one-year tenancy agreement. Ms. Smith abandoned the apartment after three months. Jones located Smith and sued her for breach of contract. Which of the following is the best statement with regard to the damages Jones can recover? A) Jones can recover damages equivalent to nine months' rent, even if the apartment is rented again. B) Jones can recover damages equivalent to nine months' rent less whatever rent was received from a subsequent tenant of that apartment. C) Jones can recover all the damages that directly and naturally flow from the breach, no matter how unforeseeable. D) Jones can recover nothing, even if it takes six months to rent the apartment again. E) Jones can recover nothing. When dealing with land, the appropriate remedy is specific performance.

B Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

26 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 55) Craig ordered a new car and was required to pay a $500 deposit. Which of the following is correct with respect to that deposit if it is to be non-refundable? A) If no deposit had been paid, there could be no contract. B) The deposit must be an honest attempt by the parties to pre-estimate damages in the event of a breach. C) If the court feels that the damages exceed the deposit, they will order the breaching party to pay any difference. D) The deposit must be a fair reflection of the loss actually suffered. E) A down-payment is an amount of money to be forfeited if either party is in breach of contract.

B Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

77) Where a developer signs agreements to buy several adjacent properties, and one property owner refuses to go through with the deal, it would be appropriate to obtain a court order for A) an equitable remedy. B) specific performance. C) an injunction. D) quantum meruit. E) damages

B Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

2 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 5) Which of the following is true with regard to tender of performance? A) If the seller attempts to deliver the contract goods at the time and place designated in the contract but the buyer refuses delivery, the seller will have to make another attempt to deliver before he can sue for breach of contract. B) If Pete shows up at Valley Service Station to fix the gas pumps on the date and at the time he was supposed to, but Valley's manager tells him to come back later, Pete has no further obligations and can sue for breach of contract. C) If Walt attempts to pay Sarah the $750 debt he owes her with a cheque on the date and at the place designated in the contract, she will have to accept that cheque even though there was no mention of payment by cheque in the contract. D) If Ivan attempts to pay his $25 debt to Jan in 25-cent pieces, that attempt constitutes a lawful tender of Ivan's obligation. E) If Sam attempts to deliver the truckload of strawberries at Frank's produce plant at 8:00 p.m. Saturday, they cannot be refused as long as the delivery was before the specified July 10 deadline.

B Diff: 3 Type: MC Page Ref: 277 Topic: Ch. 9 - Discharge by Performance Skill: Applied Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

27) In which of the following is the contract not ended by agreement? A) The event contained in the condition subsequent provision of the contract has happened. B) Randy visited Terry two weeks after the contract was formed but one month before the performance date to say he wouldn't do it. Terry had already paid Randy for the work. After hearing Randy's story, Terry said, "Just forget it, good bye and good luck." C) Sean hired two students to do a market survey for him for $3000. Before the students had begun the work, they both received offers for full-time jobs. They told Sean they wanted out of the contract. Sean said, "Ok, I'm short of cash anyway." D) Goode contracted to sell his pony to Reston. Goode then changed his mind and told Reston he didn't want to sell the pony but would give him two lambs instead. Reston agreed to the substitutes. E) After party A of the contract paid, party B said he couldn't perform. Party A agreed to waive B's obligation if B would return the money paid to him. B agreed.

B Diff: 3 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Applied Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

56) Adams signed a contract in which he promised to sell his house to Jefferson for $225,000. The deposit to be paid was set at $4000, and the liquidated damages clause provided that the deposit would be forfeited in the event that the buyer breached the contract. The buyer did breach the contract. Because the cost of housing was falling, it was difficult, even after a reasonable time had passed, to find a new buyer. The highest offer was $218,000. Adams accepted. Which of the following is true with regard to Adams' remedies? A) He would be entitled to damages for money lost—$7000 plus selling costs. B) He would be entitled to the $4000 only, if the court held that the deposit was an honest attempt of the parties to estimate damages. C) He could sue for an injunction to stop Jefferson from buying another house. D) He could ask the court to order an accounting. E) Adams must sue for specific performance, which is the only remedy, an equitable remedy, available to the parties in land transactions.

B Diff: 3 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

35 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 73) Rick was a talented computer programmer and had agreed to work for Bill in his successful computer software business, signing a one-year contract to that effect. On the day he was to start work, and after a week of training where he learned a considerable amount of confidential information about Bill's operation, he phoned Bill and announced that he was going to work for Bill's competitor instead. Which of the following is the appropriate remedy in these circumstances? A) Specific performance B) Accounting C) Injunction D) No remedy E) Rescission

C Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

36 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 75) If neighbours have a contract agreeing not to erect a building that blocks the other's view, which remedy might the court impose if that agreement is breached? A) Accounting B) Quantum meruit C) Mandatory injunction D) Laches E) Punitive damages

C Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

76) In awarding damages for breach of contract A) the plaintiff should be, to the extent possible, placed in the same position as he was prior to the agreement being made. B) the defendant should be, to the extent possible, punished for the breach in order to deter him from repeating this course of behaviour. C) the plaintiff should be, to the extent possible, placed in the same position as he would have been if the contract had been performed. D) the defendant should only be required to pay what he can reasonably afford. E) the plaintiff should only be entitled to compensation for specific and calculable costs and expenses.

C Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

1 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 3) Which one of the following is true with regard to the ending of a contract by performance? A) In law, a certified cheque is the same as cash. B) If a person owing money has tendered payment in a reasonable way, at a reasonable time, and it has been refused, he is free from any further obligation to pay. C) If a person attempts to perform services in accordance with the terms of the contract and the buyer refuses those services, the person attempting to perform can sue the buyer with no further attempt to perform. D) Legal tender consists of bills or coin in any amount. E) If a warranty is breached, the victim has no further obligation to perform under the contract.

C Diff: 2 Type: MC Page Ref: 277 Topic: Ch. 9 - Discharge by Performance Skill: Recall Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

7 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 16) Cleo entered into a contract with Harvey in June to redecorate his apartment before Christmas. However, in the middle of October, she informed him that she would not be able to do his job because she had been offered a big contract in Japan that would take her away until spring. Which of the following is true with respect to this situation? A) The most likely remedy would be for the court to award specific performance to make her do the job. B) Harvey must wait until Christmas to see if Cleo actually performs before he can take legal action. C) Cleo has repudiated the contract and Harvey can take legal action immediately. D) Their contract has been frustrated by circumstances outside their original contemplation, and thus they are excused from their previous obligations. E) Cleo could claim quantum meruit for any work she had done so far and that would be the end of the matter.

C Diff: 2 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

60) Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10,000 to be forfeited in the event of Mike's failing to go through with the deal. This deposit was an honest estimate of the damages Rita would suffer. On these facts, which of the following is true? A) If Mike breaches the contract, he will have to pay Rita all the damages that directly and naturally flow from the breach. B) If Mike breaches the contract, he would not have to pay $10,000, even if Rita suffered a substantial loss. C) If Mike breaches the contract, he would have to pay $10,000 even if Rita's actual loss was $40,000. D) If the contract price agreed upon was $150,000 and Rita, after Mike breaches the contract, sells the house in one week for $138,000, she will still be able to recoup all her losses. E) A clause in a contract that provides for the forfeiture of a deposit is called an exemption clause.

C Diff: 2 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

15 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 33) If a contract states that the contract is "subject to the purchaser obtaining financing for $10,000 at 8% by 5:00 p.m. Friday, March 11," it means that A) if the purchaser does not obtain the financing, he is in breach of contract. B) if the purchaser does not obtain the financing, the contract is frustrated. C) if the purchaser does obtain the financing and properly notifies the seller, the contract is then in full force and effect. D) there is a contract whether the purchaser gets the financing or not, because the statement is just a statement of intention and doesn't affect the contract. E) the obtaining of financing is a condition subsequent and ends the contract.

C Diff: 2 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Applied Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

31) In which of the following situations would the contract not be discharged by agreement? A) Both parties agree to let a new person be substituted into the contract in place of one of the old parties. B) Both parties to the contract agree to call it off before either one has performed. C) A condition subsequent that calls for termination of the contract has not been met. D) The two parties have reached "accord and satisfaction" with regard to terminating the contract. E) Both parties agree to call off the contract under which one paid the other $5000 for work that has not yet been performed, but the other now promises to return the $5000.

C Diff: 2 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

38) Ellis agreed to paint Lee's house for $1500. A month before the performance was due, Lee called and told Ellis that she had changed her mind and was going to have her house stuccoed instead. Ellis insisted that they had a contract and that he was going to paint the house anyway. Lee repeated that she was not going to go through with it, but Ellis insisted the contract was still on. Before further steps could be taken by either party, Lee's house was destroyed by a freak airplane accident. Which one of the following statements describes the law applicable to these facts? A) Ellis's conduct amounted to repudiation, and Lee could have sued for breach of contract immediately after the phone call. B) Lee could have accepted Ellis's conduct as an anticipatory breach. C) The contract has been discharged by frustration. D) Ellis will be able to successfully claim as damages the amount that he would have made if the contract had been performed. E) Lee's conduct did not amount to a breach since she told him a month before performance was due that she didn't want the house painted.

C Diff: 2 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

50) When Mr. George sold his house, he rented an apartment and was forced to store some furniture until he bought another house. He attended the downtown office of Security Warehousing Ltd. and entered into a bailment contract that promised to safeguard the furniture. Four months later, his things were stolen from the warehouse, and when he asked for compensation for his loss, the company admitted it was in breach of contract, but said it was exempt from liability because of an exemption clause posted on the wall of the storage area where George had taken the furniture. The sign read "Not liable for loss due to fire or water." On these facts, which of the following would be his least successful argument to nullify the exemption clause? A) He failed to receive reasonable notice of the clause at the time of contract. B) There has been a fundamental breach of the contract. C) The Sale of Goods Act voids such an exemption clause. D) On the strict construction of the clause, it doesn't cover the cause of the loss. E) Such terms cannot be unilaterally imposed.

C Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

62) Which of the following is true with regard to remedies for breach of contract? A) The victim of a breach can recover damages that he could have avoided if he had tried to mitigate his loss. B) If the seller has committed a fundamental breach of the contract, an exemption clause absolves the seller from liability. C) A person who breaches a contract is liable for all the foreseeable loss that directly and naturally flows from the breach. D) Damages are awarded by the court to a person who has suffered loss because of a breach of an essential term of the contract, but are not awarded for a breach of a non-essential term (e.g., a warranty). E) Non est factum is an equitable remedy forcing a person to comply with the terms of the contract.

C Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

29 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 61) Which of the following is true with regard to ending a contract by performance, agreement, frustration, or breach? A) The victim of a breach can recover damages even for the loss he could have avoided if he had tried to. B) A person who breaches a contract is liable for all the loss that directly and naturally flows from the breach, no matter how unforeseeable. C) An exemption clause that a seller claims absolves him from liability may be of no effect if the seller has committed a fundamental breach of the contract. D) If a person owing money has tendered payment in a reasonable way, at a reasonable time, and it has been refused, he is free from any further obligation to pay. E) If the court holds that a contract has been ended by frustration, the damages awarded by the court will be the same as if the contract was ended by a breach.

C Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

11 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 24) Rahilly entered into a contract with Khan, whereby Rahilly agreed to paint a portrait of Khan's wife to be completed by her 30th birthday, six months from the time of this agreement. Three months before the portrait was to be completed, Rahilly told Khan that he would not be doing the portrait because he had accepted a job in Boston and was leaving immediately. Which of the following is false with regard to the rights of the parties in this situation? A) The contract has not been frustrated because there was no unforeseen event beyond the control of either party making it impossible or meaningless to perform the contract. B) The contract has been repudiated, and Khan can elect to acknowledge the breach and sue Rahilly right away. C) Khan must wait to see if Rahilly really fails to perform the contract before Khan can sue. D) If Khan presses Rahilly to perform according to the contract, it is possible that the contract could be ended by frustration. E) If Khan presses Rahilly to perform according to the contract, it is possible that the contract could be ended by performance.

C Diff: 3 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

13) Dagney was an author of a popular series of children's books. She signed an agreement with her publisher, in which she agreed to have a new book in the series written by October 15th. As noted in the contract, the timing was critical to ensuring the books would be on the shelves before Christmas and in order to coincide with a massive promotion the publisher had been planning. Dagney had a terrible case of writer's block. By October 3rd, she realized that there was no way that she would have the book finished by the deadline. She emailed her publisher, admitting that she would not have the book finished in time. What are the publisher's options? A) The publisher cannot take any steps until October 15th, assuming Dagney does not deliver. B) The publisher has no recourse because Dagney's case of writer's block has made performance impossible. C) The publisher has the right to demand performance or sue. D) The contract is voidable at the option of the publisher. E) The date set out in the contract is not an enforceable term; if Dagney gets the manuscript to the publisher in a reasonable time, she will not be in breach.

25) A student bought an elaborate smartphone for the stated purpose of listening to his taped notes while he went for his daily run. The contract he signed with the seller included a clause excusing the seller from liability for the breach of "any term of the contract, whether a breach of condition or warranty whether express, implied, statutory, or otherwise." After only 30 days, the smartphone failed to function at all. It was totally useless for the student's purpose, so he took it back to the seller. The seller refused to take it back and pointed out the exemption clause in the signed contract. On these facts, which of the following could be true? A) The student could get around the exemption clause by arguing insufficient notice. B) The student could get around the exemption clause by the court's strict interpretation (construction) of the clause. C) The student could be awarded damages if the exemption clause were found invalid by the court on the grounds that the clause could not be interpreted to mean it would forgive such a fundamental breach. D) The student is out of luck because the contract with the exemption clause was in writing. E) All exemption clauses are illegal, and therefore the student would not be bound by this one.

24 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 51) Carson arranged with his brother-in-law, Waxman, that he would try to buy a famous old B.C. coastal airplane, the Spruce Ghost, which Waxman would then buy from him to display in his flight museum. Waxman promised to pay Carson a 10% commission over the price that Carson had to pay to buy the plane, so that their price would be 110% of Carson's purchase price. Carson and the owner, Wonka, agreed on a price of $80,000. After reconditioning the plane but before delivering it to Carson, Wonka decided to take it up for one last nostalgic flight and, because of his carelessness, he crashed it on take-off. Although Wonka escaped uninjured, the plane caught fire and was totally destroyed. Carson was able to locate a similar plane for only $60,000 but Waxman wasn't interested. Carson sued his brother-in-law and Wonka. What is the likely outcome of this suit? A) Waxman will have to pay Carson $8000, the commission on the agreed sale price between Carson and Wonka. B) Waxman will have to pay Carson $6000 as the commission he would have made on the purchase of the second plane. C) Wonka will have to pay Carson damages (probably $8000) for breach of contract. D) Because the contract between Carson and Wonka was frustrated by the destruction of the Spruce Ghost, Carson has no claim against anyone. E) The Frustrated Contracts Act will require Carson to share in the expense of reconditioning the Spruce Ghost that Wonka had undertaken in preparation for sale.

C Diff: 3 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

25 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 53) Dubocovich had contracted to supply a health-food store with jars of melatonin, a hormone reported in the media as a miracle potion. After they contracted, but before delivery, the government banned the sale of melatonin so that it could be properly tested under government auspices. Dubocovich told the owner of the store, Mr. Wei, that he wouldn't be delivering the melatonin because of the government ban. The demand for the melatonin was high. Mr. Wei was very upset with Dubocovich for failing to honour his contractual obligations. Furthermore, he had given Dubocovich $5000 in advance, which Dubocovich needed and used to pay the freight costs in bringing the drug to his warehouse. Wei sued Dubocovich for breach of contract. Which of the following is correct with respect to the legal position of the parties? A) Wei will be successful in his breach of contract action. B) This is an example of a frustrated contract and Wei will lose, since the loss will remain where it has fallen. C) Wei will be able to get back his $5000 minus a portion of any costs Dubocovich incurred in preparing to perform the contract. D) When a contract is frustrated in this way, the frustrating party is responsible for any losses incurred by the other party. E) The contract is illegal and void.

C Diff: 3 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

32 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 67) Perfect Programs Ltd. hired Gill, who had training not only in programming but also in pharmacy management, to create a computer program for use in a pharmacy to take care of all its needs with regard to inventory, billings, prescriptions, etc. The employment contract provided for a three-year term with no provision for early termination and the following covenant: "The employee, upon his leaving the employ of the employer, shall not compete, directly or indirectly, in any capacity whatsoever, within five miles of this place of employment." After Gill had been there for two years and the project was only months away from completion, he was approached by a representative of Big Big Co. (with offices in the same building), who offered Gill a job with, among other things, a higher salary and more staff to help him complete a program for use by drugstores. Gill accepted. To replace Gill, Perfect Programs Ltd. hired a man from New York with the same training as Gill and sued Gill for breach of contract. Which of the following is true? A) Gill is not in breach of contract because the restrictive covenant is illegal, so the whole contract is void. B) Gill will have to pay damages for all the loss that directly flows from the breach no matter how improbable. C) If Gill knew that there would be a delay before the new employee could reach the level Gill had attained before his departure, the costs of the delay would be factored into the damages. D) Perfect Programs Ltd. could have abandoned the project and just sued Gill for the entire anticipated lost profit. E) Perfect Programs Ltd. could get an injunction against Gill because the restrictive covenant is reasonable in this form.

C Diff: 3 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

8) Suppliers of goods and services try to eliminate their liability, and the courts have discouraged this by applying the principle that some failures are so significant that there is no performance of the contract. This concept is known as A) repudiation. B) frustration. C) anticipatory breach. D) fundamental breach. E) exculpatory clause.

D Diff: 1 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

15) Which of the following is false with regard to remedies for breach of contract? A) The victim of a breach cannot recover damages that he could have avoided if he had tried to mitigate his loss. B) If the court holds that the liquidated damages clause in the contract is an honest attempt to estimate damages, the amount stated will be forfeited to the victim of the breach, even if he suffered no loss in fact. C) As a general rule, a person who breaches a contract is liable for all of the foreseeable loss that directly and naturally flows from the breach. D) Damages are awarded by the court to a person who has suffered loss because of a breach of a condition of the contract, but are not awarded for a breach of a warranty. E) A person who disobeys a court order (e.g., an order for specific performance) can be cited for contempt of court.

D Diff: 1 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

37 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 78) On the theory that all land is unique, the courts in the past have been willing to award ________ whenever the parties to the purchase of land breached their contract. A) damages B) equitable remedies C) quantum meruit D) specific performance E) an injunction

D Diff: 1 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 6. Differentiate the equitable remedies available for a breach of contract.

1) Which of the following is true with regard to ending a contract by performance, agreement, or breach? A) A contract can be ended by breach if there was a either a breach of condition or a breach of warranty. B) A person has legally tendered performance if he pays a $500 debt in 25-cent coins. C) If a person properly tenders performance of a service that is rejected by the other party, he is required to try again and again. D) A contract ends by agreement when the parties include in the contract a "condition subsequent," i.e., a clause that says the contract will end upon the happening of a specified future event that then takes place. E) If one party to the contract has paid for a service, but now the other doesn't want to perform, the contract is ended by agreement as long as they both agree to call it off.

D Diff: 2 Type: MC Page Ref: 277 Topic: Ch. 9 - Discharge by Performance Skill: Applied Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

6) Tufts and McDougal were having an argument about the law regarding performance of a contract. Which one of the following statements of theirs is correct? A) If Jed has to pay $500 to his mechanic, he can pay the whole debt in dimes and the mechanic has to take them. B) If Jed owes the mechanic $500, a cheque is as good as cash in law even if the mechanic said he wouldn't take a cheque. C) If Jed shows up with cash for the mechanic on the day and at the place designated in the contract, and the mechanic refuses to take it for some reason, Jed doesn't ever have to pay him. D) If Roscoe tries to deliver lumber to Jed in accordance with their contract and Jed doesn't take delivery of it, Roscoe can sue Jed for breach of contract without ever trying to deliver it again. E) If Joan owes a $500 debt due on a specific date, she doesn't have to pay until the creditor seeks her out for payment.

D Diff: 2 Type: MC Page Ref: 277 Topic: Ch. 9 - Discharge by Performance Skill: Applied Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

17) On the February 1, Smyth contracted to buy Dupont's van. They had agreed that Smyth would pay the price of $7000 on March 1 and take delivery and the risk on that date. Smyth then contracted to sell the van to Smithers on March 5 for $7600. On February 22, Dupont called Smyth and said he wasn't going to sell because he had decided to keep the van. On these facts, which of the following is false? A) Dupont's call is an express repudiation of the contract and is an anticipatory breach. B) Smyth could agree to call off the contract; neither of them had yet performed. C) Smyth could refuse to acknowledge a breach, but that would result in the possibility that the contract could be breached later. D) Smyth could acknowledge that Dupont was in breach but has to wait until after the performance date to sue him for breach of contract. E) Smyth could refuse to acknowledge a breach and press Dupont to complete the contact.

D Diff: 2 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

16 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 35) Which of the following is true with regard to ending a contract by agreement? A) A contract cannot be ended by the happening of a "condition subsequent" provided for in the contract. B) A contract can be ended by one party if he finds a better deal, e.g., by cancelling an order that has been accepted, as long as this is done before performance. C) A contract cannot be ended by agreement if neither party to the contract has performed his or her obligation. D) A contract can be ended by agreement if one party has performed his obligation and agrees to take something as satisfaction from the other although that other hasn't performed according to the contract. E) A contract can be ended unilaterally by one party.

D Diff: 2 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Applied Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

42) In B.C., Mr. Buyer sued Mr. Seller for breach of contract because Mr. Seller failed to deliver a computer system on time in accordance with their contract. Mr. Seller argued that he was not in breach and that the contract had been frustrated. The computer was destroyed by water when a careless driver knocked over a fire hydrant outside the warehouse holding the computer. No deposit had been paid. The court held that the contract was frustrated. Based on this ruling, how does the court handle the situation? A) Buyer will succeed against Seller for damages because the court will treat it as if it were an anticipatory breach. B) The court will let the losses lie where they fell, despite any of Seller's costs in preparing the computer system. C) Buyer will not have to pay anything to Seller unless Seller had requested a deposit at the time of contract. D) The court will look at the costs incurred and any payments made, and will apportion the losses between the parties. E) The court will treat the contract as if there were a common mistake about the existence of the subject matter.

D Diff: 2 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

28 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 59) Which of the following is false with regard to remedies for breach of contract? A) The victim of a breach cannot recover damages that he could have avoided if he had tried to mitigate his loss. B) An exemption clause that a seller claims absolves him from liability may be of no effect if the seller has committed a fundamental breach of the contract. C) A person who breaches a contract is liable for all the foreseeable loss that directly and naturally flows from the breach. D) Damages are awarded by the court to a person who has suffered loss because of a breach of an essential term of the contract, but are not awarded for a breach of a non-essential term (e.g., a warranty). E) Specific performance is an equitable remedy forcing a person to comply with the terms of the contract.

D Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

52) Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action? A) This clause requires the injured party to take all reasonable steps to mitigate (lessen) his losses. B) The plaintiff will likely be awarded a judgment for all the damages that "naturally and directly flow" from the breach. C) This clause conclusively determines the amount of damages that the court can award. D) The court will likely award the amount set out in the clause if it considers that to be a genuine estimate by the parties of the likely consequences of the breach. E) Liquidated damages only apply to losses caused by excess water, such as floods or tidal waves.

D Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

66) Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action? A) This clause requires the injured party to take all reasonable steps to lessen (mitigate) his losses. B) The plaintiff will likely be awarded a judgment for all the damages that naturally and directly flow from the breach. C) The court will award the amount specified only if it accurately reflects the losses that actually took place. D) The court will likely award the amount set out in the clause if it considers that to be a genuine estimate by the parties of the likely consequences of a breach. E) Liquidated damages only apply to losses caused by excess water, such as floods or tidal waves.

D Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

12 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 26) Monroe sold computers. On the purchase of a new StarSystem computer the buyer signed the written contract that contained the following clause: "The seller is not liable for any breach of condition or warranty express or implied in this contract." The buyer was a businessman who intended to use the machine in his business for a while and then resell it. The machine was used properly but didn't operate well, and within one week it would not work at all. Monroe refused to take back the machine or to refund any money by relying on the exemption clause. Which of the following would be the buyer's best argument for avoiding the effect of the exemption clause in this case? A) Such clauses are prohibited under contract law and are therefore void. B) The buyer had no notice of the clause; therefore, it is not a term of the contract. C) On a narrow interpretation of the words used in the exemption clause, they do not cover his complaint. D) There is a fundamental breach of contract. E) There is a breach of a non-essential term of the contract.

D Diff: 3 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

18 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 39) Gill, a wholesale fish seller, agreed to provide Blanchet's Restaurant with 1000 pounds of fresh salmon per week throughout the months of July, August, and September. Things went as planned for July and August. However, Gill was unable to meet the requirements of the contract for the first two weeks of September because his boats simply did not catch that much, although other companies did better and other fish was available for Gill to purchase, but at a higher price than what Blanchet was paying him. Rather than sell at a loss, Gill simply did not supply during the two-week period. At the end of that period, the Federal Fisheries Department shut down the fishery altogether because of the depletion of fish. After that, no more fresh salmon was available at all. Blanchet sued Gill for breach of contract with respect to his failure to deliver any fresh salmon in September. Which one of the following statements accurately sets out the legal situation here? A) Gill was under a strict obligation to supply the fish and no excuses for failure are allowed. B) The contract was frustrated for the whole month of September by Gill's inability to obtain fish in the way that he intended, and thus he is not liable at all. C) By not suing Gill as soon as he failed to deliver in the first two weeks of September, Blanchet lost the right to complain, and then the subsequent governmental closure excused his failure to deliver any fish in September. D) Gill is liable for breach of contract with respect to the first two weeks of September, but the second two weeks' failure was caused by frustration for which he was not responsible. E) The doctrine of frustration does not apply here because this is a sale-of-goods situation.

D Diff: 3 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

33 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 69) Jones entered into a contract to purchase a 1957 Edsel automobile from Smith for $2000. Unknown to Smith, Jones had an opportunity to resell that car for $5000 to Brown, who wanted to use it as a prop in a movie being shot in town. Before the car was delivered and payment made, it was destroyed by fire when one of Smith's employees carelessly spilled a can of gasoline in the garage where the car was kept. If the court found that the normal market value for such a vehicle was only $3000, which of the following statements is correct with respect to the appropriate remedy that should be awarded by the court for such a breach of contract? A) Because of the uniqueness of the vehicle, the court should award specific performance. B) In these circumstances, the court should award $5000, representing the lost profits. C) In these circumstances, there should be no remedy since the contract has been frustrated. D) The court should award only $1000, the difference between the market price and the purchase price. E) The court could award $3000.

D Diff: 3 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

2) Pat O'Grady owes Robinson $5000 in cash, but resents Robinson talking about O'Grady's debt among mutual acquaintances. O'Grady wants to know which of the following tactics would be legal performance. A) Deliver the money to his house (instead of to his office) at 3:00 a.m. on the due date B) Not pay Robinson until Robinson came for the money C) Pay Robinson on time but pay it all in dimes D) Pay him on time but with a cheque E) Pay him on time in $5 bills

E Diff: 1 Type: MC Page Ref: 277 Topic: Ch. 9 - Discharge by Performance Skill: Applied Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

21) A contract is terminated by agreement in which of the following situations? A) Breach B) Frustration C) Unilateral release D) A written statement by one party to cancel an accepted order E) The occurrence of a condition subsequent

E Diff: 1 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

13 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 28) Which of the following statements regarding novation is false? A) Novation refers to the creation of a new contract through the substitution of a third party for one of the original parties to a contract, with everyone's consent. B) Novation requires that the new debtor assume complete liability. C) Novation requires the creditor to accept the new debtor as principal debtor, not merely as a guarantor. D) Novation requires the creditor to accept the new contract in full satisfaction and substitution for the old contract. E) Novation requires the inclusion of a force majeure clause in order to be enforceable.

E Diff: 1 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

44) The claim of frustration is not available in which of the following circumstances? A) The subject matter of the agreement is destroyed. B) An event that forms the basis of the contract does not take place. C) The law changes, making performance illegal. D) A government policy prevents performance. E) A change in circumstances makes it difficult or more costly for one of the parties to perform.

E Diff: 1 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Recall Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

10 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 22) Which one of the following does not terminate a contract? A) The buyer and seller agree orally to cancel their contract when neither one has performed his obligations under it. B) Minnie and Mickey agree that Minnie will take less than the amount Mickey owes as full payment of his debt, and Mickey will pay her two days early. C) Twain had contracted to build a model of a proposed building for architects who were to meet with their clients on March 10. The model was destroyed the night of March 9 when a car left the road and crashed into the workshop and destroyed the model. D) Fred no longer wants to honour his contract to sell Mitra his printer but tells Mitra he'll substitute a $500 boat. Mitra agrees. E) When Ben's new car is delivered, the seats are cloth rather than leather as ordered.

E Diff: 2 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

14 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 30) Which of the following is false with regard to ending contracts and remedies? A) If Lori incurred costs in preparing to perform a contract that is ended by frustration, the court can allow Lori to keep some of the deposit paid by the other party to help cover those costs. B) If a person ignores a court order (e.g., an injunction), he could be cited for contempt of court. C) A breach of condition allows the party who suffers the breach to terminate the contract. D) The equitable remedy of specific performance is available in those situations where monetary compensation would not be adequate. E) The term "condition precedent" refers to a clause in a contract that brings the contractual obligations of the parties to an end upon the happening of some specific event.

E Diff: 2 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

29) Which of the following is false with regard to ending a contract by performance, agreement, or breach? A) A contract can be ended by breach only if there was a breach of condition, not a breach of warranty. B) A person has not legally tendered performance if he pays a $500 debt in 25-cent coins. C) If a person properly tenders performance of a service that is rejected by the other party, he is not required to try again. D) A contract ends by agreement when the parties include in the contract a "condition subsequent," i.e., a clause that says the contract will end upon the happening of a specified future event that then takes place. E) If one party to the contract has paid for a service, but now the other doesn't want to perform, the contract is ended by agreement as long as they both agree to call it off.

E Diff: 2 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

34) Which one of the following statements accurately describes the operation of a condition subsequent? A) This occurs when one party shows up at the right time and place ready, able, and willing to carry out his obligations under the contract. B) This is a term in a contract that must be met before the contract becomes fully operational. C) This occurs when some event that the parties have not anticipated makes performance radically different from what they agreed to. D) There is no such thing recognized in the common law. E) This is a term in the contract that provides for the premature cessation (ending) of the parties' obligations upon the occurrence of some particular event.

E Diff: 2 Type: MC Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

54) If a supplier failed to honour a contract to supply parts to Mr. Matheson and the court finds the supplier in breach of contract, which of the following would be incorrect with respect to how the court determines the amount of money to award to Matheson? A) Liquidated damages must be an honest attempt by the parties to pre-estimate damages. B) The victim of the breach must take all reasonable steps to keep those damages as low as possible. C) The supplier would not be responsible for any unusual losses lost by Mr. Matheson because of some special use not told to the supplier. D) If a deposit is involved, the damages will be restricted to that deposit. E) The supplier is responsible for all damages suffered by Matheson.

E Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Applied Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

27 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 57) In which one of the following instances would the seller most likely succeed in an attempt to escape liability by the use of an exemption clause? A) The store had posted at the entrance to the dressing rooms a large sign reading "Not responsible for stolen articles," and the customer lost articles in a fire that swept through the dressing rooms. B) The purchaser of goods, after the sale, is sent an invoice on which the exemption clause is printed in boldface type at the top of the first page. C) The clause says there will be no liability for breach of a condition and the breach that occurs is minor in nature. D) There has been a breach of the fundamental obligation of the contract, and the court holds that, on its true construction, the parties did not mean it to cover a serious breach. E) The exemption clause that covers the situation was posted in plain view and was brought to the buyer's attention at the place and time of contract.

E Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

30 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 63) Which of the following statements is true with respect to the law of damages? A) Damages are intended to punish the wrongdoer for breaching the contract. B) Damages are awarded for a breach of a condition but not for a breach of warranty. C) If a contract contains a liquidated damages clause, the party who has breached the contract has agreed to pay to the party wronged an amount equal to all the loss that directly and naturally flows from the breach. D) Damages are an order from the court for the breaching party to perform the contract as he or she agreed to do. E) A deposit may be an amount of money a party to a contract agrees to forfeit if he or she breaches the contract.

E Diff: 2 Type: MC Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

11) Mikael recently started a home-based business selling custom fishing lures. He decided that he could make a lot more money selling his homemade lures on the Internet. Mikael is not the least bit technologically-inclined, but he knows that his next-door neighbour, Perm, does web design on the side. He decides to hire her to create a website for his new venture. Perm has him sign an agreement that includes an exemption clause that limits her liability in cases of negligence. In the course of designing the website, Perm becomes annoyed at Mikael because his dog keeps digging up her rose bushes. Rather than confront Mikael directly, Perm deliberately puts the wrong pricing information on Mikael's website to get him back. If Mikael suffers damages as a result and wants to sue Perm, what would the likely result be? A) The exemption clause would protect Perm because of the principle of "freedom to contract." B) The exemption clause would be severed as being an illegal restraint of trade. C) Perm's actions were outside the scope of the contract, so Mikael would have no claim in law. D) Perm only did freelance web design; as a non-professional she would not face liability. E) Perm's acts were deliberate, not negligent, so Perm would not be protected by the exemption clause.

E Diff: 3 Type: MC Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

6 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 14) In which one of the following instances would the seller most likely succeed in an attempt to escape liability by the use of an exemption clause when the buyer suffers a loss? A) A consumer transaction is involved and provincial legislation prohibits such exemption clauses in consumer transactions. B) The buyer of an expensive computer software program received, a month after the sale, an invoice on which was printed an exemption clause that he hadn't been shown before. C) The store had posted at the entrance to the dressing rooms a large sign reading "Not responsible for stolen articles," and the customer lost a briefcase in a fire that swept through the dressing rooms. D) There has been a breach of the fundamental obligation of the contract, and the court holds that on its true construction the parties did not mean it to cover a serious breach. E) Ralph bought a used lawnmower under a written and signed contract that contained an "as is" clause.

20 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 43) Smedlap, a trucker, and Dewdney, a farmer, entered into a contract under which Smedlap agreed to haul all of Dewdney's pumpkin crop to market in time for the Halloween sales. However, the day before Smedlap was to pick up the pumpkins, he called Dewdney and told him that, since he had received such a good offer to sell his truck, he had sold it and therefore was not able to haul Dewdney's pumpkins. There was not enough time for Smedlap to buy another truck, but he was sure that Dewdney could make other arrangements and he hoped that he hadn't unduly inconvenienced him. Unfortunately, Dewdney was not able to make arrangements in time for the Halloween market, and instead he had to sell his crop to a pie-filling canner for much less than he could reasonably have expected at the market. Furthermore, the market owners were so disappointed by Dewdney's failure to deliver that they refused to give him their usual order for Christmas turkeys. In previous years, this turkey order had generated his major income for the year. He was forced to find another outlet for his turkeys, and again he ended up selling to commercial processors for a substantially lower price. As a result of these two events, Dewdney was unable to keep up his mortgage payments on the farm and eventually he lost it to the bank in a foreclosure action. Dewdney is now suing Smedlap to recover these losses. Identify the correct statement with respect to the question of whether Smedlap's conduct was a breach of contract. A) Smedlap simply cancelled the contract, which he was entitled to do as long as it was before performance was due. B) This was not a breach because Smedlap did not do it maliciously, and he gave Dewdney what he honestly believed was adequate notice to make other arrangements. C) The contract was discharged by frustration. D) Smedlap is not liable because it was not his fault that Dewdney was unable to make other suitable arrangements. E) This was a breach that consisted of self-induced frustration.

E Diff: 3 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

21 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 45) In all but one of the following situations, the contract is frustrated. Identify the exception. A) Jack contracts with Bill to build a barn on his one-acre lot, but before the permit is obtained, a new law prohibits barns on lots smaller than three acres. B) Rudolph is due to appear in a local variety theatre that has just been destroyed in a fire of unknown origin. C) Frank has contracted to ride Emperor, a prize horse, in the Canada Day races on July 1, but on June 28 the horse breaks a leg and has to be destroyed. D) Jerry, a doctor, is due to perform a heart transplant operation on Mary, and the night before the surgery his arthritis becomes so painful that he cannot hold a scalpel. E) Gregory, a trucker with whom you contracted last month to haul potatoes tomorrow, phones to tell you that his truck has broken down.

E Diff: 3 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

22 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 47) Which of the following would most likely result in the court's finding that the contract had been discharged by frustration? A) Lowe contracted to purchase a business from Lerner, but the interest rates jumped so quickly that, even before closing, he realized he would lose money, so he told Lerner he couldn't go ahead with it. B) Thornburn agreed to buy Patterson's tulip crop, but unknown to both of them, at the time of the contract the crop had been destroyed by frost. C) Lee Ltd. agrees to haul lumber for Len Lumberjack, but a few days before the delivery date the company's best truck, the one they wanted to use, broke down. D) N. Yung contracts to give a performance at Etobicoke stadium, but the performance was cancelled because Yung was poisoned by contaminated food at a local restaurant. E) Mellowcream Ltd. contracted to deliver 40 dozen donuts to Pat's Place, but called Pat and told her it couldn't deliver because another customer needed another 40 dozen for an unexpected event.

E Diff: 3 Type: MC Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Applied Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

88) A breach of warranty will bring the contract to an end.

FALSE Diff: 1 Type: TF Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

FALSE Diff: 1 Type: TF Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

97) Lack of financial ability, if proven, will establish frustration.

FALSE Diff: 1 Type: TF Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Recall Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

98) A person who breaches a contract is responsible for all of the loss that flows from the breach, no matter how unforeseeable.

FALSE Diff: 2 Type: TF Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

82) Legal tender in Canada consists of government-produced coins and bills of any amount or quantity.

FALSE Diff: 3 Type: TF Page Ref: 277 Topic: Ch. 9 - Discharge by Performance Skill: Recall Objective: Chapter 9: 1. Illustrate how a contract is discharged by performance.

87) When a condition is breached, the victim can only sue for damages but must continue to perform their obligations under the contract.

FALSE Diff: 3 Type: TF Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

89) A condition precedent is an example of a contract being ended by agreement.

FALSE Diff: 3 Type: TF Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

92) A condition precedent is a term of a contract that will bring that contract to an end when the specified condition is met.

FALSE Diff: 3 Type: TF Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

41 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 96) When one party is responsible for an act that frustrates a contract, it is treated as a breach.

TRUE Diff: 1 Type: TF Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Recall Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

84) Courts enforce exemption clauses because it is assumed that they reflect the will of the parties to the contract.

TRUE Diff: 2 Type: TF Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

85) Repudiation occurs when one party indicates that they do not intend to follow through with their end of the deal.

40 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 91) For a contract to be ended by agreement, there must be consideration as well as agreement on both sides.

TRUE Diff: 2 Type: TF Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

93) All rules of contract formation apply when parties agree to discharge a contract.

TRUE Diff: 2 Type: TF Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

95) The Frustrated Contracts Act today requires that when a deposit is paid, the costs incurred can be split out of the deposit.

TRUE Diff: 2 Type: TF Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Recall Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

100) "Clean hands" refers to the absence of wrongdoing on the part of a person seeking an equitable remedy.

TRUE Diff: 2 Type: TF Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

99) The purpose of damages in contract law is to put the victim in the position he would have been in had the contract been properly performed.

TRUE Diff: 2 Type: TF Page Ref: 296 Topic: Ch. 9 - Remedies for Breach of Contract Skill: Recall Objective: Chapter 9: 5. Describe how damages for breach of contract are assessed.

39 Copyright © 2017 Pearson Canada, Inc. Downloaded by Rezzak Ucar ([email protected]) lOMoARcPSD|4461764 86) When a person informs you before performance is due that he is not going to perform the contract, you don't have to wait to see if he does perform. You can make other arrangements and sue right away.

TRUE Diff: 3 Type: TF Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Applied Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

83) A breach of warranty allows a victim to sue for damages, but they must go through with their obligations under the contract.

TRUE Diff: 3 Type: TF Page Ref: 280 Topic: Ch. 9 - Discharge by Breach Skill: Recall Objective: Chapter 9: 2. Describe when a breach of contract will be sufficient to relieve the opposite party from its obligations.

90) A condition subsequent is an example of a contract being ended by agreement.

TRUE Diff: 3 Type: TF Page Ref: 288 Topic: Ch. 9 - Discharge by Agreement Skill: Recall Objective: Chapter 9: 3. Explain how a contract may be discharged by agreement.

94) When an outside, unforeseen event interferes with the performance of a contract, and there is some other way to fulfill the contract, performance is required.

TRUE Diff: 3 Type: TF Page Ref: 292 Topic: Ch. 9 - Discharge by Frustration Skill: Recall Objective: Chapter 9: 4. Outline the consequences flowing from frustration of contract.

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