Chapter 17. Performance, Breach, and Discharge
1. The law assumes that respective performances under a contract are concurrent conditions, unless there is an
agreement to the contrary.
a. True
b. False
2. A condition may be inserted into a contract to terminate the duty to perform.
a. True
b. False
3. In building a $30,000 addition to the Murphys’ house, the contractor used the wrong flooring, causing the Murphys
$2,000 in damages. Under the substantial performance doctrine, the contractor’s performance is substantial and
therefore he is entitled to the contract price of $30,000, but if the deviation from the specifications were considered
material, the Murphys would not have to pay for the addition.
a. True
b. False
4. Mark agrees to a three-year employment contract with State University as long as they become accredited after one
year. This contract contains a “condition subsequent.”
a. True
b. False
5. “Discharge” has to do with the termination of contractual duties.
a. True
b. False
6. A breach of contract always discharges the injured party from performance under the contract.
a. True
b. False
7. Robert and John entered into a bilateral contract. If they agree to a rescission of the contract while it is executory,
there is a lack of consideration for the rescission.
a. True
b. False
8. The UCC is substantially the same as the common law with regard to the doctrine of material breach of contract.
a. True
b. False
9. The “perfect tender rule” would allow a buyer to keep merchandise that deviates from the contract without having to
perform himself.
a. True
b. False
10. One party’s unauthorized alteration of any of the material terms in a written contract discharges the entire contract.
a. True
b. False
11. An obligee‘s promise to accept a stated performance in satisfaction of the obligor‘s existing contractual duty creates
an accord.
a. True
b. False
12. Substituted contracts discharge the original duties immediately.
a. True
b. False
13. In rescinding an executory, bilateral contract, no consideration is furnished.
a. True
b. False
14. An accord and satisfaction discharges an existing debt.
a. True
b. False
15. In all substituted contracts there must be an agreement among three parties where a new promise is substituted for
an existing promise or a new promisor is substituted for an existing promisor.
a. True
b. False
16. If there is a novation, the original promisor remains liable to the original promisee if the new promisor fails to
perform.
a. True
b. False
17. Lou and David have an executory contract that is supposed to be performed on June 1. On May 1, David indicates
that he has no intention of performing the contract as agreed. Lou must wait until June 1 before he can pursue any
remedies for breach of contract against David.
a. True
b. False
18. A material breach by the seller will discharge the buyer from his obligations under a contract.
a. True
b. False
19. A person who has made a financially unsound contract may be relieved from performance under the doctrine of
commercial impracticability.
a. True
b. False
20. Discharge by performance is the most frequent method of discharging a contractual duty.
a. True
b. False
21. Breach of a contractual promise and failure of a condition have fundamentally the same effect.
a. True
b. False
22. Belinda has a household insurance policy, which requires that she notify the insurance company within thirty days of
any loss before she is eligible to receive payment for her loss. The notification requirement is a condition precedent
to the insurance company‘s obligation to perform, even though the notification must occur subsequent to the loss.
a. True
b. False
23. The Code and the Restatement have no provisions for discharge of contractual duties in cases involving commercial
impracticability.
a. True
b. False
24. Forrest has a contract with Denzel to construct a new condominium complex. The contract provides that Forrest
must furnish a certificate of occupancy and conformity with the local fire code before Denzel has an obligation to
pay. The furnishing of the certificate is an implied in fact condition subsequent to the construction of the building.
a. True
b. False
25. The Restatement and the Code have made the traditional test of objective impossibility more stringent by requiring
that the performance must be actually or literally impossible.
a. True
b. False
26. Marie owes Nathan $300 and the parties agree that Marie will paint Nathan‘s house in satisfaction of the debt. The
debt is not discharged until Marie performs the substituted agreement by painting Nathan’s house.
a. True
b. False
27. A novation is an agreement between two parties to have one substitute for the other in a contract.
a. True
b. False
28. After the coronation of Edward VII did not take place on the scheduled date and parties who had entered into
contracts in anticipation of the event filed numerous suits, the doctrine of frustration of purpose was added to the law
of contracts.
a. True
b. False
29. Cora and Bruce have an executory contract for the sale of some goods. Cora files for bankruptcy and is then
discharged by the bankruptcy court. Cora has no obligation to perform under the contract.
a. True
b. False
30. There is only one way to completely and legally discharge a contract.
a. True
b. False
31. An intentional breach of contract is generally held to be material.
a. True
b. False
32. A contract may condition the duty to accept and pay for the performance of the other party upon the approval of a
third party.
a. True
b. False
33. An implied–in-fact condition and constructive condition are the same.
a. True
b. False
34. Concurrent conditions occur when mutual duties of performance are to take place simultaneously.
a. True
b. False
35. A change in Sal’s financial condition, making it impossible for him to fulfill a contractual obligation, would be
considered objective impossibility, which would discharge his contractual duty.
a. True
b. False
36. A contract contains the provision, “Walter Hamilton promises to pay Faye Weeks $1,200 for a 2005 V-6 motor
provided that Phelps’ Garage approves the quality of the motor.” This provision:
a. makes the contract unenforceable since Walter’s promise is illusory.
b. creates an express condition which must be met before Walter’s duty to pay arises.
c. cannot create an express condition because it lacks the necessary words “on condition that.”
d. cannot be valid since it makes Walter’s duty to pay dependent upon the opinion of a third party.
37. William has a contract to build a new office building for Angela. The contract contains a provision requiring William
to furnish a certificate of occupancy from the building inspector before Angela is required to pay. This provision is:
a. an express condition.
b. an implied–in-fact condition.
c. an implied–in–law condition.
d. a condition subsequent.
38. Which of the following is a contract with a condition subsequent?
a. Rhonda enters into a contract to buy a new car conditional upon her getting a loan from her bank.
b. Roger bought a DVD player, but he may return it within ten days and get all of his money back.
c. Both of these are examples of a condition subsequent.
d. Neither of these is an example of a condition subsequent.
39. A(n) is a substituted contract that involves an agreement among three parties to substitute a new promisee in
place of an existing promisee, or to replace an existing promisor with a new one.
a. accord
b. satisfaction
c. novation
d. mutual rescission