Mort 275: Cengage Ch 10-13

Which of the following substitutes a new party for one of the original parties in an existing contract at the mutual agreement of the original parties, such that the prior contract terminates, and a new one substitutes for it?

A novation

An offer to carry out an obligation in satisfaction of the terms of a contract is called _____.

A tender of performance.

Which of the following is an exception to the Statute of Frauds and does not have to be in writing?

An agreement where a promise is an original promise by the promisor rather than a promise to pay the debt of another.

Andrew owns a glass manufacturing company. He generally buys silica, the main raw material in commercial glass production, from Niche Inc. Andrew makes an order for the quarter's requirement of silica from Niche Inc. He buys the raw material on credit and asks the supplier to deliver the same to Clara, their new purchase department manager. Which of the following is true with regard to this scenario?

Andrew's promise in the contract can be in writing

The Orion Car Company is supposed to pay Pioneer Inc., a fuel gauge supplier, $60,000 for their supply of fuel gauges. Pioneer has to supply 100 fuel gauges every month for the next full quarter. After the first month's delivery is made, a fire breaks out at Orion, destroying a lot of property. Orion announces that it will be unable to supply the required number of fuel gauges for the next two quarters. In this case, Pioneer can sue Orion for _____ breach.

Anticipatory

In a contract, if one party, prior to the time the other party is entitled to performance, announces an intention not to perform, a(n) _____ occurs.

Anticipatory breach

A(n) _____ means that one party conveys rights in a contract to another who is not a party to the original undertaking.

Assignment

Which of the following agreements must be in writing in accordance with the Statute of Frauds?

Ben's agreement to become responsible for Darwin's debt.

A(n) _____ is a person to whom the promisee owes an obligation or duty that will be discharged to the extent that the promisor performs the promise.

Creditor beneficiary

Peter borrows $100,000 from his aunt Mary to pay back his student loan. Peter's father makes a contract to pay Peter's debt to Mary. In the given scenario, Mary is the _____ of the contract between Peter and his father.

Creditor beneficiary

Nelson, a building contractor, makes a contract with Davis to construct his office building for $60 million dollars. Nelson who had originally signed the contract stating that he would complete the building within 5th of October 2012, realized that because of overload of projects in hand, it cannot be completed by that date. He alters the date mentioned on the contract to 5th of December 2012 without Davis's consent. Which of the following is true regarding the contract in the given scenario?

Davis is discharged from the contract.

The breach of contractual obligation is called _____.

Default

William made a contract with Kevin to build a boat for $800. William's failure in building the boat led to a breach of contractual obligation. This is an example of _____.

Default

Darwin invested $60,000 in a new investment plan provided by Life Guide Mutual. He named his wife Daisy as the beneficiary in this plan. In the given scenario, Daisy is the:

Donee beneficiary

The _____ clause is a contract provision excusing performance when an extraordinary event occurs.

Force majeure

A _____ contract is a transaction wherein the parties stand to win or to lose based on pure chance.

Gambling

Shirley who is planning to start a boutique borrows $100,000 from Danny. Gary, Shirley's uncle, promises Danny to pay Shirley's debt to Danny if she defaults on payment. According to the Statute of Frauds, which of the following is true with regard to this scenario?

Gary's promise must be in writing.

Jerry and Nancy bet $250 on a basketball game between the New York Knicks and the Boston Celtics. Both Jerry and Nancy hand over their bet money to Cameron, who will act as a stakeholder in this bet. Which of the following is true of this scenario?

If Jerry breaches this contract then the courts will not allow Nancy to recover damages from Jerry.

A(n)_____ is a contract in which two or more parties have all promised the entire performance, which is the subject of the contract.

Joint contract

Arnold contracts with Joseph to mow his lawn for $50. Joseph later assigns the right to receive $50 to Hillary. Which of the following is true with regard to this scenario?

Joseph is the assignor

Julie contracts to wash Clara's car for $15. Julie later assigns the right to receive $15 to Kevin. Which of the following is true with regard to this scenario?

Kevin is the assignee

Clark has agreed to purchase Ronald's house for $70,000. As part of their agreement, Clark has to put down a deposit of $6,000. Both parties agree that if Clark breaches the contract, Ronald can keep the deposit, and if Ronald breaches the contract, he has to return the deposit and pay an additional $500 to Clark. Such a monetary arrangement in a contract is an example of _____ damages.

Liquidated

If two parties enter into an oral contract that falls under the Statute of Frauds, and both parties have fully performed according to its terms then:

Neither party can set aside the transaction on the ground that there was no writing.

If the plaintiff in a breach-of-contract suit can prove that the defendant broke the contract, but cannot prove any loss was sustained because of the breach, then the court will award _____ damages.

Nominal

Lacy bought a car from Jack for $ 30,000, to be paid in three installments, within a year from the date mentioned in the contract. Six months later, Lacy and Jack together with Monica agreed that Monica will take Lacy's place in the contract and would pay the remaining amount. This discharged Lacy from the contract, and bound Jack and Monica in a new contract. Which of the following occurred when Monica replaced Lacy in the contract?

Novation

A complete, written contract may not be modified by oral testimony unless evidence of fraud, accident, or mistake exists. This rule is known as the _____.

Parol evidence rule

Kevin attends an interview at Dream Inc., an interior designing company for the position of a creative head. He gets selected as a creative head and receives a letter of appointment from the company. In the letter of appointment, the company mentions that Kevin must report to work on the 23rd of Oct, 2012, and also puts down the words "time is of the essence." Which of the following is true with regard to this scenario?

Performance must be rendered within a reasonable time.

Smith, an artist, is planning a house party to celebrate the completion of his new painting called "The Stolen Wonder." He plans to have the following features at his party: a performance by the local band "Frayed Shoelace"; a freshly painted foyer; delicacies by renowned chef, Molliere; a display of "The Stolen Wonder" in the main living room. He has already contracted Paint It Inc., a painting contractor to paint the foyer. He has also contracted "Frayed Shoelace", and Molliere to appear at the party, and made a copy of "The Stolen Wonder" to be put on display to avoid damage to the original painting. Which of the following can be delegated without breach?

Replacing the copy of "The Stolen Wonder" with the actual painting.

Ross was a doctor at The Greens Hospital. He was a neurosurgeon working with the hospital from the past three years. It was discovered by the hospital authorities in the recent past that Ross was not licensed to be a doctor and was subsequently dismissed. Which of the following is true with regard to this scenario?

Ross is guilty of a crime.

Sam and Denice enter into an oral contract where Sam promises to sell his one acre land worth $1,500,000 to Denice for $1,000,000. Sam and Denice perform according to the terms of this oral contract. Denice pays $1,000,000 and becomes the owner of Sam's one acre of land. Which of the following is true with regard to this scenario?

Sam cannot seek to set aside the contract on the ground that there was no writing.

Adam and Parker share an apartment. Sharon, the owner of this apartment, leases it out for $400,000 for a four-year term. Adam and Parker enter a contract with Sharon in which they collectively agree to pay Sharon $400,000 for the apartment. Adam and Parker agree to pay half each. Parker fails to pay his share for the apartment. Which of the following is true with regard to the given scenario?

Sharon can sue both Adam and Parker.

According to the federal Electronic Signatures in Global and National Commerce Act:

Signature no longer has to be on paper.

A person's right to sue must be exercised within the time fixed by a statute called the _____.

Statute of limitations

Harry owns a mansion in North Carolina. He plans to start a new business but falls short on capital. He plans to rent out his mansion for a three-year term. He advertises for the same. Kelly replies to the ad and agrees to Harry's terms. Harry rents out the mansion to Kelly for $700,000. They make an oral contract for a three-year term. Kelly occupies the mansion for that period. However, she does not pay the rent stating that the oral contract was invalid. Which of the following is true with regard to this scenario?

The Statute of Frauds will deem this contract nonbinding as it is an oral rental agreement for more than one year.

David, who gets appointed as a chef and signs a contract with the Prestige group of hotels, loses both his arms in a car accident, rendering it impossible to perform his job. Which of the following is true with regard to the given scenario?

The contract gets discharged.

Thomson, a famous artist, enters into a contract with Nicolas to create a life-size portrait of Nicolas for $85,000. He promises to deliver it within a week from the date mentioned on the contract. Two days after the contract was signed, Thomson meets with a severe accident and becomes bedridden. With regard to the given scenario, what happens to the contract between Thomson and Nicolas?

The contract gets discharged.

Richard owns a construction company into which he wishes to introduce his eldest son, Mark, as a partner. But in order for Mark to become a partner, he has to sign a contract drawn by Richard in which he stipulates that Mark cannot get married as long as he is a partner to Richard in the construction company. Mark signs the contract and becomes a partner. Which of the following is true in this scenario??

The contract made by Richard is void.

Amy, a licensed pharmacist, is held for selling Edmund oxycodone, a narcotic painkiller, without a prescription. Which of the following is true with regard to this scenario?

The court will refrain from protecting either Edmund or Amy.

An assignor is:

The party who makes an assignment.

Nicky's Fashion House entered into a contract with Blues and Pinks, a button manufacturing company, to supply Nicky's with buttons for all its goods for a year at $50,000. Both the companies fulfill the terms of the contract. Which of the following is true with regard to this scenario?

This contract is discharged by performance.

Percy owns an apartment in Maryland. She leases this property to Sandy for a four-year term. Which of the following is true with regard to this scenario?

This contract must be in writing in order to be binding.

Richie and Ronald are players in the stock market. Richie holds 15,000 shares of Sun Inc. He makes a contract with Ronald agreeing to sell 5,000 shares of Sun Inc, two months from the date of contract at $120 a share. Richie and Ronald do not actually intend to sell or buy the stocks, but agree to settle for the difference between $120 a share and the closing price at the end of two months from the date mentioned in the contract. Which of the following is true with regard to this scenario?

This is an example of a gambling contract.

Contracts contrary to public policy are:

Unenforceable

A contract that sets an illegally high interest rate for the use of money is called a :

Usurious Contract

Contracts made by an unlicensed person operating in one of the fields or businesses covered by licensing law are normally held:

Valid

Business Equip Inc., was one of the biggest players in the heavy equipment manufacturing market. The company contracted with other big players in the equipment market secretly and fixed the prices of turbines. Such contracts are considered:

Void

Harry owns a tire manufacturing company. He makes a contract with Mike to buy low quality rubber for tire production. This type of rubber, though cheap, provides less traction than that stipulated by the U.S. Department of Transport. This contract made between Harry and Mike is considered:

Void

The purpose of a contract is achieved in an unlawful manner, the contract is:

Void