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Chapter 11: Contractual Obligations and Their Enforcement
1. If a contractual right is transferred, this does not change the legal rights of the other party to the contract.
2. No consideration is necessary to make a valid assignment.
3. A contract creating a duty can prohibit delegation.
4. If the obligor breaches, the assignor must sue for the breach.
5. When just about all the duties are performed, but a minor duty under the contract remains, a major breach has
occurred.
6. Generally, impossibility of performance refers to an obligor’s personal inability to perform.
7. A ready, willing, and able offer to perform an obligation is a tender.
8. The only remedy generally available for a minor breach is money damages.
9. An award of punitive damages seeks to place injured parties in the same financial position they would have
been in if there had been no breach.
10. A party injured by a breach of contract is not required to take any steps to minimize the harm done.
11. When an assignment occurs
C. the assignor must sue if the obligor breaches.
D. the assignor promises the assignee that the obligor will perform as promised in the original contract.
12. Generally, a party may assign contractual rights to another
C. as rights to personal services, especially those skilled in nature.
D. as assignments of future wages, as limited by state statutes.
13. Assignment of contractual rights usually is made
A. voluntarily by the obligor.
B. voluntarily by the assignee.
14. Until notified that an assignment has occurred,
C. the obligor is allowed to suspend all payments.
D. the obligor should send the payments to an agreed-upon third party.
15. A party who receives an unintended benefit from a contract between two other parties but cannot sue to
enforce it is a(n)
A. third-party beneficiary.
B. donee beneficiary.
16. Contracts are discharged by
C. substandard performance of the terms of the contract.
D. failure to complete performance of the terms of the contract.
17. If a contract does not say when the duty must be performed, then the duty must be performed
A. whenever the party is able to complete the performance.
B. within 30 days of signing the contract.
18. Which of the following is not a valid discharge of contractual obligations?
A. by commercial impracticability
B. by subsequent agreement
19. Which of the following is a remedy for a major breach?
A. reassign and restitution
B. money damages
20. Specific performance is generally available
A. only when the courts are available to supervise the result.
B. for personal service or employment contracts.
21. A contract term that suspends the imposition of a contract’s obligations unless an event doesn’t occur within
a set time or until the occurrence of a certain event is a
C. condition subsequent.
D. condition negative.
22. Contractual rights may not be assigned
A. if the obligor does not agree to the terms.
B. if there is no consideration.
C. the obligor should inquire as to the legality of the assignment.
D. a court order may be necessary to insure the protection of those rights.
24. A party notifies the other party to a contract before the time of performance has arrived that he or she will
default. This is known as
A. major breach.
B. minor breach.
25. If a contract states “time is of the essence,” then
A. failure to perform by that date would constitute a major breach.
26. The parties who have made a contract
A. must fulfill the terms of the contract before they make a new one.
C. an obligor’s inability to please the other party.
D. an obligor’s refusal to perform.
28. To discharge a contract by alteration, the alteration must be
A. made intentionally.
B. made by a party or authorized agent to the agreement.
29. If an obligation requires the payment of money, rejection of tender to pay the money
A. discharges the debt.
B. prevents the creditor from collecting later.
30. If fraud or an intentional tort is involved in a breach of contract, the courts will award ___________
damages.
A. compensatory money
B. consequential money
31. A party to a contract may transfer to another person his or her rights to the benefits of the contract by means
of an __________________.
32. An assignment does not need to be supported by __________________ to be legally effective, though it
often is.
33. __________________ is the fulfillment of contractual promises as agreed.
34. The routine obligations of a party that must be performed to fulfill a contract often can be transferred to
another to perform. This is known as __________________.
35. __________________ of a contract is a termination of duties that ordinarily occurs when the parties
perform as promised.
36. __________________ occurs when a party entitled to receive performance under a contract may release the
other party from the duty of performance and accept a substitute party.
37. A(n) __________________ is the legal means by which a right is enforced or a right’s violation is
prevented or redressed.
38. __________________ permits each party to recover money or property (or the value thereof).
39. The remedy of __________________ is the only appropriate remedy for breach of contract which is to
decree that the breaching party do exactly what was required under the contract.
40. A party injured by a breach of contract is required by law to take reasonable steps to minimize the harm
done, or to __________________.
41. The Wickmans financed their home through First Mortgage Company. After several years, First Mortgage
Company sold the Wickmans’ mortgage to Colonial Mortgage Company. Is such a transfer of rights legal?
Identify the assignor, the assignee, and the obligor. Who’s responsible for telling the Wickmans of the sale of
their mortgage?
Yes, the transfer of rights a party may have under a contract to another is legal and is called an assignment. First
42. Trevon and Michael signed a one-year lease on an apartment. Five months into the lease, Michael decided
he could no longer afford to live there, and left. Michael refused to pay Trevon his half of the rent for the
remainder of the year. What remedies does Trevon have available?
Trevon may have to prove that he made reasonable attempts to mitigate the damages by looking for a
43. Why would rights to personal services, especially those of a skilled nature or when personal trust and
confidence are involved, not be assignable?
When an obligor contracts with a party, it is because the obligor trusts that the party has the skills to complete
44. Scott brought his vehicle to the transmission shop and paid $1,800 for a new transmission. Three weeks
later when that transmission failed, Scott was stranded and had to have his car towed to the nearest transmission
shop. There he learned that instead of a new transmission, a rebuilt transmission was put in his car. What is
Scott’s recourse?
Scott may sue for a major breach of contract. He could perhaps receive compensatory and consequential
