Section 9 Unit 2

What language may be included in a contract after the assignor's name to make it clear that the contract is assignable? a. "And/or assigns" b. "Buyer beware" c. "Spouse or partner" d. "Time is of the essence"

a. "And/or assigns"

In Maryland, a party to a contract under seal has ________ from a contract breach to sue the other party. a. 12 years b. 3 years c. 6 years d. 9 years

a. 12 years

Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal, and Kenneth kept the earnest deposit. This is an example of ______. a. Accepting liquidated damages b. Accepting partial performance c. Suing for damages d. Suing for specific performance

a. Accepting liquidated damages

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______. a. Accepting partial performance b. Mutually rescinding the contract c. Rescinding the contract unilaterally d. Suing for damages

a. Accepting partial performance

Martha made an offer to buy Drake's home, and he accepted it. Under the terms of the agreement, Martha was supposed to make an earnest money deposit of $10,000, but she only put down $5,000. Drake accepted the lesser deposit, and the sale was ultimately finalized. This is an example of ______. a. Accepting partial performance b. Rescinding the contract unilaterally c. Suing for damages d. Suing for specific performance

a. Accepting partial performance

Mary agreed to buy her mother's house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can't come up with the agreed-upon funds. What's happening in this scenario? a. Assignment b. Breach c. Novation d. Performance

a. Assignment

Shannon and Rene are sisters who entered into a contract to buy an income property. The sisters got into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. If Jerry fails to live up to his obligations under the contract though, Shannon will be held responsible. Of what is this an example? a. Assignment b. Fraud c. Mutual mistake d. Novation

a. Assignment

What is it called when one party to a contract transfers the contractual rights and obligations to another but remains liable for the contract terms? a. Assignment b. Execution c. Novation d. Termination

a. Assignment

Eileen entered into a contract to buy Peter's home. The contract specified that Peter must leave the refrigerator with the home, and he must replace the roof before closing. During the pre-closing walk-through, Eileen confirmed the house had a nice new roof, but also found that Peter took the refrigerator with him. Eileen decided she didn't want the refrigerator that much anyway so she didn't make a fuss. This is an example of ______ of the contract. a. Partial performance b. Performance c. Reinforcement d. Voiding

a. Partial performance

In Maryland, a party to a simple contract has ________ from a contract breach to sue the other party. a. 30 days b. 30 years c. 3 weeks d. 3 years

d. 3 years

Steve buys Lizzy's home in Maryland, and in the sales contract he specifies that the outdoor grill must stay with the home. Lizzy ends up taking the grill when she moves out. If Steve wants to sue Lizzy for taking the grill, he must do so within ________. a. 15 days b. 15 years c. 3 weeks d. 3 years

d. 3 years

Anna and Cindy entered a contract to buy Jake's home. However, at the last minute, Cindy had a change of heart and wanted out of the deal. Anna asked another friend, Sally, if she wanted to take Cindy's place as a co-buyer of Jake's home. Everyone agreed to the substitution of Sally for Cindy on the contract. Of what is this an example? a. Assignment b. Fraud c. Mutual mistake d. Novation

d. Novation

Parker entered into a contract with seller Derrick to buy Derrick's home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy Derrick's home. With Derrick's approval, Parker is released and Parker's brother, Tom, takes Parker's place as the buyer in the purchase contract. Of what is this an example? a. Assignment b. Fraud c. Misrepresentation d. Novation

d. Novation

What's the key difference between assignment and novation of a contract? a. Assignment releases the original party from all obligations, while novation does not. b. Individual contracts must specifically allow novation, but not assignment. c. Novation is disallowed in many states, while assignment is not. d. Novation releases the original party from all obligations, while assignment does not.

d. Novation releases the original party from all obligations, while assignment does not.

In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. Of what is this an example? a. A void contract b. Contract execution c. Legal purpose d. Partial performance

d. Partial performance

When a contract has been breached, the wronged party may attempt to sue for punitive damages, which are ______. a. An agreed-upon amount that the buyer will pay the seller if the buyer breaches the contract b. Compensation for actual loss based on the contract's value c. Non-monetary damages d. Payments in excess of any compensatory damages

d. Payments in excess of any compensatory damages

Sue Ellen has a contract to buy Roger's house, which she has always admired, when Roger decides he's ready to move to a senior living community. After Roger finds a suitable senior apartment and moves, Sue Ellen writes a check for the agreed-upon amount, and Roger transfers the deed to her. What is happening in this scenario? a. Assignment b. Breach c. Novation d. Performance

d. Performance

DeeAnna thought she purchased an investment property, but the seller refused to deliver the title to her. DeeAnna met all of her obligations per the written contract she and the seller signed. She decided to take the seller to court in an effort to force him to hand over the title. This is an example of ______. a. Accepting partial performance b. Rescinding the contract unilaterally c. Suing for damages d. Suing for specific performance

d. Suing for specific performance

Which one of the following statements is true regarding a partially performed sales contract that otherwise contains all of the essential elements? a. The contract can't close. b. The contract is unenforceable in court. c. The contract is void. d. The contract is voidable.

d. The contract is voidable.

What phrase do many real estate contracts contain that reminds the parties to avoid unnecessary delays to the transaction, and to adhere to all contract dates? a. Haste makes waste b. Patience is a virtue c. Seek the advice of an attorney d. Time is of the essence

d. Time is of the essence

Which of the following scenarios is an example of novation? a. Cynthia has a contract with Jack to buy his house. She terminates the contract after the inspection and writes a similar contract on a new property with Jeff. b. Doug is buying Norm's farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract. c. Marcie contracts to buy Suzanna's beauty salon. Marcie gets cold feet, though, and terminates the contract. d. Using a clause in the original purchase contract, Roxanne assigns her contractual right to purchase a property to her friend, Caroline.

b. Doug is buying Norm's farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract.

In Maryland, the wronged party in a real estate transaction has a limited time period to initiate a court action. This is known as the __________________________. a. Operation of law b. Statute of limitations c. Suit for possession d. Time is of the essence

b. Statute of limitations

In contract law, when does partial performance occur? a. When a party acknowledges receipt of the contract b. When a party does some, but not all, of what the party has agreed to do c. When a party meets all terms of the contract d. When a party rejects all terms of the contract

b. When a party does some, but not all, of what the party has agreed to do

When a buyer breaches the real estate sale contract, the seller may file a lawsuit for compensatory damages. Which of the following best describes compensatory damages? a. A specified monetary amount agreed upon by the buyer to pay the seller, if the buyer breaches the contract. b. A specified monetary amount the seller agrees to pay the buyer, if the seller breaches the contract. c. Compensation for actual loss based on the contract's value. d. Payment in excess of the contract's value.

c. Compensation for actual loss based on the contract's value.

Under the statute of ______, if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time. a. Efficiency b. Fairness c. Limitations d. Timeliness

c. Limitations

Sam entered into a contract to sell his home to Gina. After the inspection, Gina insisted that Sam replace the damaged roof. Sam refused, and the parties agreed to cancel the deal. This is an example of ______. a. Accepting liquidated damages b. Accepting partial performance c. Mutually rescinding the contract d. Unilaterally rescinding the contract

c. Mutually rescinding the contract

Mary contracted to buy her mother's house when her mother moves to a senior living community, but now Mary has to move because of work and no longer wants to buy the house. With their mother's agreement, Mary's sister, Tina, steps in, releasing Mary from her obligation. They write up a new contract, with the only change being that Tina is now the party to the contract rather than Mary. What's happened here? a. Assignment b. Breach of contract c. Novation d. Performance

c. Novation

What is the name of the process of substituting one party to an existing contract with a new party, releasing the original party from all contractual obligations and rights? a. Assignment b. Execution c. Novation d. Re-contracting

c. Novation

The owner of ABC Construction entered into a contract to build two homes for brothers Jack and John. The contract specified that the homes must be completed by April 1. ABC finished the homes on March 30. Of what is this an example? a. Non-performance b. Partial performance c. Performance d. Voiding

c. Performance

Zack enters into a contract to buy Olivia's home. Per the terms of the contract, Zack must put down a $10,000 earnest money deposit and have the property inspected within five days. In reality, he puts down a $12,000 deposit and has the property inspected within two days. Of what is this an example? a. Buyer misrepresentation b. Partial performance of the contract c. Performance of the contract d. Voiding of the contract

c. Performance of the contract

Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor weren't going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______. a. Accepting partial performance b. Mutually rescinding the contract c. Rescinding the contract unilaterally d. Suing for damages

c. Rescinding the contract unilaterally

Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained, the gutters leaked and flooded Betty's basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of ______. a. Accepting partial performance b. Rescinding the contract unilaterally c. Suing for damages and breach of contract d. Suing for specific performance

c. Suing for damages and breach of contract