Chapter 8 Homework

*Alan has accepted a new job. Which of the following is not a contract condition related to that job?* *A)* Alan's salary will be $1,000 a week. *B)* Alan will receive a bonus provided that he obtains six new clients within 30 days. *C)* Medical and dental benefits will start after Alan has worked for six months. *D)* Alan cannot begin work unless he passes a drug and alcohol screening.

*A)* Alan's salary will be $1,000 a week.

*Which remedy covers foreseeable indirect losses suffered by the nonbreaching party?* *A)* Consequential *B)* Specific performance *C)* Liquidated *D)* Compensatory *E)* Restitution

*A)* Consequential

*Sharon has contracted with Craig to buy Craig's car. She will pay $5,000 in cash, and he will provide the title and registration. They agree to meet at 10 a.m. on Wednesday to exchange their consideration. Unfortunately, Craig dies Tuesday evening.* *A)* The contract is still valid and Craig's heirs must go through with it based on the agreed terms. *B)* The contract automatically terminates due to impracticability caused by Craig's death. *C)* The contract is still enforceable; however, Craig's heirs may renegotiate the terms because they are now the owners of the car. *D)* The contract automatically terminates due to impossibility caused by Craig's death.

*A)* The contract is still valid and Craig's heirs must go through with it based on the agreed terms.

*Which remedy covers losses of actual damages suffered by the nonbreaching party?* *A)* Liquidated *B)* Compensatory *C)* Specific performance *D)* Consequential *E)* Restitution

*B)* Compensatory

*Sally has just purchased a home and wants to have an in-ground pool installed. She calls Cool Pools, the company that put in her neighbors' pools. When the company rep comes to her property, he does some soil tests that are standard for the industry and gets the same results as he got when the other pools were put in, so the company gives her a price quote of $16,000. When Cool Pools begin excavating, it discovers solid rock 4 feel below ground level. The neighbors had no such rock. Cool Pools stops work and informs Sally that it will have to use explosives to remove the rock and the cost of the pool will now be $32,000.* *A)* Sally can have the contract discharged based on frustration of purpose. *B)* Sally can have the contract discharged based on impracticability. *C)* Sally is under contract and will have to pay the new price. *D)* Sally can have the contract discharged based on impossibility.

*B)* Sally can have the contract discharged based on impracticability.

*Clyde contracts with Seaside Resorts to rent an oceanfront room for a romantic weekend with his girlfriend Anne. In fact, Clyde intends to propose to Anne on the beach under the full moon during their stay. He made this decision after booking the room. The contract with Seaside Resorts requires a $250 deposit with the remaining $250 due upon check-in. The deposit is nonrefundable unless the reservation is canceled at least 48 hours prior to check-in. The day before they are to leave for the resort, Clyde and Anne have a huge fight and break up. Clyde calls Seaside and cancels the reservation and demands a refund of his deposit.* *A)* Clyde will get the refund because of impracticability; he can't stay at a romantic seaside room if he has no one to share it with. *B)* Seaside is not required to provide a refund. *C)* Clyde will get the refund because of frustration of purpose; his intention was to propose and that is no longer possible. *D)* Clyde will get the refund because of imp

*B)* Seaside is not required to provide a refund.

*A delegation will be allowed in which of the following situations?* *A)* a sculptor hired to sculpt your bust *B)* a painter hired to paint your home *C)* an actor hired to perform in a play *D)* a surgeon performing brain surgery

*B)* a painter hired to paint your home

*Fred's Flooring (FF) contracted with Harry homeowner to install wood flooring throughout Harry's home. Harry was to purchase the flooring, and the contract was solely for installation. Payment was to be 20 percent at the time that the work commenced and 80 percent once the flooring was installed. Harry purchased the flooring materials and paid the 20 percent, so FF began work. When FF's work was halfway completed, Harry realized that he didn't have the money to pay FF on completion, so he bolted the doors and refused access. If FF wants to rescind the contract and be paid for work completed, FF would sue for:* *A)* compensatory damages. *B)* restitution. *C)* liquidated damages. *D)* consequential damages.

*B)* restitution.

*The Chicago Cubs major-league baseball team is in the playoffs and doing well. Behind the left-field wall there is an apartment building, and the owner advertises, "Space available on the apartment building roof with a clear view of the field for the World Series. Bring a lawn chair, your radio, and a cooler and enjoy the game. Just $50 per game." Bart, a lifelong fan, answers the ad and pays the building owner $100 to reserve space for the first two games. Unfortunately, the Cubs start playing poorly and don't make it to the World Series.* *A)* Bart will get a refund because of impracticability. *B)* The building owner does not have to refund the money because Bart reserved space and the space is still there for him to use whether the games are played or not. *C)* Bart will get a refund because of frustration of purpose. *D)* The building owner does not have to refund the money because it's not her fault that the Cubs didn't make it to the World Series.

*C)* Bart will get a refund because of frustration of purpose.

*Louis agrees to sell Stevens a rare coin collection for $10,000. When Stevens shows up with the money, Louis changes his mind and refuses to sell it to him. Which of the following is Stevens' probable remedy?* *A)* Restitution *B)* Reformation *C)* Specific performance *D)* Liquidated damages *E)* Consequential damages

*C)* Specific performance

*Coopers agrees to prepare and file an income tax return for Young for $500. Coopers files the return on time, but a mistake on the tax return causes Young to be assessed a penalty tax of $1,000. Which of the following types of breaches describes this scenario?* *A)* Repudiation breach *B)* Anticipatory breach *C)* Total breach *D)* Partial breach *E)* Substantial breach

*C)* Total breach

*Pete has been fired from his job and believes that he has been wrongfully terminated. As he decides how to fight the perceived injustice, how can he best mitigate damages?* *A)* file his suit as soon as possible while the evidence is available and witnesses' recollections are fresh *B)* file for unemployment insurance as quickly as possible so that he doesn't sink too far into debt *C)* actively seek new employment as soon as possible *D)* call his former employer to determine the real reason he was fired

*C)* actively seek new employment as soon as possible

*When one party fails to perform under an agreement, the failing party has ________ the contract.* *A)* remedied *B)* completed *C)* breached *D)* discharged *E)* repudiated

*C)* breached

*In which of the following situations is a court most likely to find substantial performance?* *A)* Olivia orders 3 gallons of paint for the exterior of her house, based on square footage covered and needed, but the paint supplier can deliver only 2 gallons. *B)* Young orders a set of four specially made chrome rims for her car, but the supplier can deliver only three. *C)* April orders a fully equipped car from a dealer, but although perfect in every way, the car delivered has an automatic transmission rather than the manual transmission that she ordered. *D)* KM Corporation orders 500 boxes of copy paper from MK supply, but MK can deliver only 450 boxes.

*D)* KM Corporation orders 500 boxes of copy paper from MK supply, but MK can deliver only 450 boxes.

*Moe has entered into a contract with Larry. Subsequently, Moe assigns his rights in that contract to Curley. Which of the following would not prevent that assignment?* *A)* The assignment would materially alter Larry's duties and cause an increased burden or risk to Larry. *B)* The assignment would violate public policy matters. *C)* The contract contains an antiassignment clause. *D)* Larry protests the assignment and demands that Moe not make the assignment.

*D)* Larry protests the assignment and demands that Moe not make the assignment.

*Coopers agrees to prepare and file an income tax return for Young for $500. Coopers fails to file the return on time. Which of the following types of breaches describes this scenario?* *A)* Substantial breach *B)* Repudiation breach *C)* Anticipatory breach *D)* Total breach *E)* Partial breach

*D)* Total breach

*Lon has just come home from serving in the Marines and contracts with a local car dealership to purchase a car. The car must be ordered, and payment is to be made when the car arrives. The next day, Lon receives orders to return to active duty. Realizing that he doesn't need the car, he brings Tony to the dealership and asks that Tony substitute for him. Tony will take delivery and ownership of the car, and Tony will pay the dealership upon delivery. The dealership agrees to have Tony substitute for Lon. What has occurred?* *A)* a delegation *B)* an accord and satisfaction *C)* an assignment *D)* a novation

*D)* a novation

*Abel agrees to paint the lobby of Baker's office building by June 1. On May 28, Abel calls and says that he is running behind schedule and may not get to Baker's lobby until September 1. Repudiation occurred through which of the following?* *I.* A statement by one party of her intent not to perform. *II.* An action by the promisor that rendered performance impossible. *III.* Knowledge by the parties that one party may be unable to perform despite both parties' efforts. *IV.* After a contract has been discharged.

*I.* A statement by one party of her intent not to perform.

*Anticipatory repudiation can occur in which of the following ways?* *I.* A statement by one party of its intent not to perform *II.* An action by the promisor that rendered performance impossible *III.* Knowledge by the parties that one party may be unable to perform despite both parties' efforts *IV.* After a contract has been discharged

*I.* A statement by one party of its intent not to perform *II.* An action by the promisor that rendered performance impossible *III.* Knowledge by the parties that one party may be unable to perform despite both parties' efforts

*Which of the following are forms of equitable relief?* *I.* Consequential damages *II.* Specific performance *III.* Equitable damages *IV.* Injunctive relief

*II.* Specific performance *IV.* Injunctive relief