Chapter 17
Performance and Discharge
in Traditional and E–Contracts
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
A1. In most contracts, promises of performance are not expressly conditioned.
A2. An event must be certain to occur to constitute a contractual condition.
A3. Tender is an unconditional offer to perform.
A4. Express conditions are provided for by the parties’ agreement.
A5. When a condition operates to terminate a party’s promise to perform, it is a condition
subsequent.
A6. A contract comes to an end when both parties fulfill their respective duties by
performing the acts they have promised.
A7. A party who substantially performs his or her duties under a contract can enforce the
contract against the other party.
A8. A contract is substantially performed when performance creates substantially the
same benefits as those promised in the contract.
A9. Most contracts need to be performed to personally satisfy the party to whom per–
formance is owed.
A10. Any breach excuses the nonbreaching party’s duty to perform.
A11. Any breach allows the nonbreaching party to sue for damages.
A12. Anticipatory repudiation discharges a contract.
A13. A breach of contract occurs only when a party fails to perform all of his or her duties
under a contract.
A14. If no time for performance is stated in a contract, any time is acceptable.
A15. A compromise that arises out of a dispute over the obligations under a contract may
be substituted for the original contract.
A16. When a contract party alters a written contract, the other party must adapt his or her
performance accordingly.
A17. A contract is discharged when a change in the law renders the performance illegal.
A18. A contract will be discharged if foreseeable circumstances make it impossible to attain
the contract’s purpose.
A19. A discharge in bankruptcy will ordinarily bar enforcement of most of a debtor’s
contracts by creditors.
A20. A party’s obligations under a contract may be excused if, due to an unforeseen
circumstance, the party’s benefit will be reduced.
MULTIPLE CHOICE QUESTIONS
A1. Lark enters into a contract to mine limestone in Milena’s quarry, sell it, and share the
profits on its sale with Milena. If the duties under this contract are discharged like
those under most contracts, the duties will be
a. repudiated.
b. breached.
c. performed.
d. rescinded.
A2. Belle enters into a contract to subdivide and sell housing lots in Colin’s hillside field if
Dell City annexes the property within the next year. Belle’s duty to perform is
a. absolute.
b. conditional.
c. illusional.
d. irresolute.
A3. Jen agrees to buy Kev’s Dirt Bike business on the express condition that Valley Credit
Union approves the financing. This approval is
a. a concurrent condition.
b. a condition precedent.
c. a condition subsequent.
d. an implied condition.
A4. Elton and Florida sign a contract by which Elton agrees to deliver and install a utility
sink on May 15 in exchange for Florida’s promise to pay the $150 price on May 15.
The delivery and installation of the sink and the payment of the price are examples of
a. conditions precedent.
b. concurrent conditions.
c. conditions subsequent.
d. implied conditions.
A5. Lake Port Services enters into a contract to load Max’s Great Lakes barges with the
cargo that Max designates. Lake Port’s offer to perform, when Lake Port is ready,
willing, able to do so, is
a. complete.
b. substantial.
c. tender.
d. tough.
A6. Safe-T Guard Services enters into a contract to secure Taylor’s Business Park from
vandalism and theft between 6 P.M. and 6 A.M. nightly for six months. At the end of
the term, if there has been no vandalism or theft in the Park, Safe-T’s performance
will have been
a. absolute.
b. complete.
c. conditional.
d. substantial.
A7. Even-Bilt Construction contracts to build a warehouse for Discount E–Sales Company.
Even-Bilt completely performs. Discount E-Sales is entitled to
a. an accord.
b. rescission.
c. novation.
d. nothing more.
A8. Real Cheap Painters, Inc., agrees to paint Quint’s house, using a particular brand of
“discount” paint. Real Cheap completes the job but uses a different brand of
discounted paint. This is most likely
a. an absolute excuse for Quint’s refusal to pay.
b. a material breach.
c. complete performance.
d. substantial performance.
Fact Pattern 17–A1 (Questions A9–A10 apply)
Mutual Company enters into a contract to employ Neil as an investment manager for two
years. During the first year, Neil is often absent without explanation and when present fails to
adequately monitor and manage Mutual’s investments.
A9. Refer to Fact Pattern 17–A1. With respect to Mutual’s duties, Neil’s performance most
likely
a. discharges Mutual from the contract.
b. has no effect on Mutual’s performance.
c. increases Mutual’s duties under the contract.
d. suspends Mutual’s duty to perform.
A10. Refer to Fact Pattern 17-A1. Neil’s performance is most likely
a. a material breach.
b. a minor breach.
c. Mutual’s breach.
d. no breach.
A11. Jane and Kelly want Lucy to replace Kelly as a party to their contract. They can best
accomplish this by
a. a mutual agreement to rescind.
b. an accord and satisfaction.
c. a novation.
d. an alteration of the contract.
A12. Quito contracts with Rewind Graphix, Inc., to pay $5,000 for its work on the animated
film “Song.” After Rewind performs, they sign an accord, in which Quito promises to
pay $4,000 within ten days instead of $5,000 later. But Quito does not pay. Rewind
can sue Quito under
a. neither the accord nor the original obligation.
b. the accord only.
c. the accord or the original obligation.
d. the original obligation only.
A13. Ruth contracts to provide Shelly with fifty hours of telepathic personal coaching. The
state legislature subsequently passes a law making telepathic personal coaching
illegal. This law will
a. discharge the contract.
b. fulfill the contract.
c. not affect the contract.
d. require immediate performance of the contract.
A14. Commercial Construction, Inc. (CCI), contracts to build a store for Rita’s Pizza
Company with Rita’s payment due on June 1. On June 1, Rita’s bank is closed, and for
this reason, Rita’s claims it cannot pay on time. In this situation
a. CCI is in breach of contract.
b. Rita’s is in breach of contract.
c. the contract is discharged.
d. the contract is suspended.
A15. Clyde contracts with Deephole Excavation, Inc., to dig an agricultural pond on his
farm. Deephole is to keep the excavated gravel in payment. Clyde’s neighbor Eden
challenges the dig as an illegal gravel pit. A court orders a halt to the dig. Clyde’s
contract with Deephole is
a. breached.
b. discharged.
c. not affected.
d. suspended.
Fact Pattern 17–A2 (Questions A16–A19 apply)
Evelyn, who owns and operates Eve’s Farm & Garden Company, agrees to sell Hill & Dale
Produce, Inc., fifty bushels of apples.
A16. Refer to Fact Pattern 17-A2. Evelyn dies before the apples are delivered to Hill & Dale.
Evelyn’s contract with Hill & Dale is
a. breached.
b. discharged.
c. not affected.
d. suspended.
A17. Refer to Fact Pattern 17-A2. When bad weather destroys Eve’s Garden’s apple crop, the
obligation to deliver apples to Hill & Dale is
a. breached.
b. discharged.
c. not affected.
d. suspended.
A18. Refer to Fact Pattern 17-A2. A strike delays delivery of the apples by ten days. Evelyn’s
contract with Hill & Dale is
a. breached.
b. discharged.
c. not affected.
d. suspended.
A19. Refer to Fact Pattern 17-A2. When the market price for apples exceeds the price in the
contract with Hill & Dale, Evelyn decides not to deliver the apples. Evelyn’s contract with
Hill & Dale is
a. breached.
b. discharged.
c. not affected.
d. suspended.
A20. Frisco agrees to lease an apartment from Gina for one day to see Harry, the president
of the United States, deliver a speech in the street below. The speech is canceled ten
days before its scheduled date. The contract
a. is discharged.
b. is not affected.
c. is postponed until another event is scheduled.
d. must be performed immediately.
ESSAY QUESTIONS
A1. Elin contracts to buy six cases of vintage Fertile Valley wine from Grapes & Vines
Winery for $1,200. The contract states that delivery is to be made at Elin’s residence
“on or before May 1, to be used for daughter’s wedding reception on May 2.” On May
1, Grapes & Vines’s delivery van is involved in an accident, and no wine is delivered
that day. On the morning of May 2, Elin buys the wine from Happy Hill Winery. That
afternoon, just before the reception, Grapes & Vines tenders delivery of the wine at
Elin’s residence. Elin refuses tender. Grapes & Vines sues Elin for breach of contract.
How is the court most likely to rule?
A2. Investment Properties, Inc., hires Justus Construction Company to renovate the
interior of Investment’s office building. Justus submits plans that Investment
approves. Justus completes the major reconstruction, paints the interior, and buys the
fixtures and furnishings. Investment rejects some of the furnishings because they do
not match the plans, and subsequently refuses to allow Justus to finish the work or to
collect payment. Could Justus sue successfully for payment for the entire contract?
