978-0538496902 Chapter 11

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STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ11—1ȱQUIZȱ

LegalȱConceptsȱ

Directions:ȱFillȱinȱtheȱblank(s)ȱwithȱtheȱmostȱappropriateȱtermȱorȱphraseȱtoȱcompleteȱ

theȱsentence.ȱ

Answers

ȱ1.ȱȱ ȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱ_ȱisȱtheȱlegalȱtransferȱofȱcontractualȱrights.ȱȱ ȱ1.ȱ___________________ȱ

ȱ2.ȱAȱpersonȱwhoȱowesȱaȱdutyȱunderȱaȱcontractȱisȱa(n) ȱ

ȱȱȱȱȱȱȱ?ȱȱȱȱȱȱ_ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ

ȱ2.ȱ___________________ȱ

ȱ3.ȱ ȱȱȱȱȱȱȱ?ȱȱȱȱȱȱ_ȱisȱtheȱfulfillmentȱofȱcontractualȱpromises.ȱȱ3.ȱ___________________ȱ

ȱ4.ȱA(n)ȱȱȱȱȱȱȱ?ȱȱȱȱȱȱ_ȱȱspecifiesȱanȱeventȱthatȱmustȱnotȱhappen.ȱȱ4.ȱȱ__________________ȱ

ȱ5.ȱAȱfailureȱtoȱprovideȱcompleteȱperformanceȱofȱaȱcontractȱ

isȱa(n)ȱȱ_ȱȱȱȱȱȱȱ?ȱȱȱȱȱȱ_.ȱȱ ȱ5.ȱ___________________ȱ

ȱ6.ȱAȱmaterialȱchangeȱinȱtheȱtermsȱofȱaȱwrittenȱcontractȱ

withoutȱtheȱotherȱparty’sȱconsentȱisȱa(n)ȱ____?____.ȱȱ6.ȱ___________________ȱ

ȱ7.ȱ ȱȱȱȱȱȱȱ?ȱȱȱȱȱȱ_ȱisȱaȱterminationȱofȱdutiesȱwhenȱallȱpartiesȱhaveȱ

performedȱasȱpromised.ȱȱ7.ȱ___________________ȱ

ȱ8.ȱA(n)ȱ ȱȱȱȱȱȱȱ?ȱȱȱȱȱȱ_ȱȱisȱaȱready,ȱwilling,ȱandȱableȱofferȱtoȱ

performȱanȱobligation.ȱ

ȱ8.ȱ___________________ȱ

ȱ9.ȱ ȱȱȱȱȱȱȱ?ȱȱȱȱȱȱ_ȱareȱthoseȱwho,ȱthoughȱnotȱaȱpartyȱtoȱtheȱ

contract,ȱwereȱintendedȱtoȱdirectlyȱbenefitȱfromȱit.ȱ

ȱ9.ȱ___________________ȱ

10.ȱTheȱactualȱperformanceȱofȱaȱnewȱcontractualȱobligationȱisȱ

calledȱa(n)ȱ____?_____.ȱ10.___________________ȱ

LegalȱApplicationsȱ

11.ȱȱKeishaȱArthurȱhiredȱaȱgeneralȱcontractorȱtoȱbuildȱherȱnewȱhomeȱwhoȱinȱturnȱ

delegatedȱmostȱofȱtheȱworkȱtoȱfourȱindependentȱsubcontractors.ȱIsȱthisȱaȱlegalȱ

delegationȱofȱduties?ȱIsȱtheȱgeneralȱcontractorȱresponsibleȱforȱtheȱsubcontractors’ȱ

work?ȱExplainȱyourȱanswer.ȱ

ȱ12.ȱMattȱSchenkelȱhiredȱAndrewsȱWallȱAnchorȱServiceȱtoȱrepairȱaȱbulgingȱwallȱinȱ

hisȱbasement.ȱTheȱcontractȱstatedȱthatȱtheȱjobȱwasȱtoȱbeȱfinishedȱ“byȱAprilȱ1,ȱatȱ

caseȱofȱbreachȱofȱcontract,ȱsubstantialȱperformance,ȱorȱanticipatoryȱbreach?ȱ

WhatȱlegalȱactionȱshouldȱMattȱtake?ȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ11—1ȱPRACTICEȱACTIVITYȱ

Readȱtheȱfollowingȱcasesȱandȱanswerȱtheȱquestionsȱaboutȱthem.ȱAttachȱaȱpageȱifȱadditionalȱ

spaceȱisȱneededȱforȱanswers.ȱ

1.ȱTheȱChimneyȱHillȱCorporationȱdevelopedȱaȱ900Ȭlotȱtractȱofȱlandȱforȱvacationȱ

homesȱknownȱasȱChimneyȱHill.ȱTheȱdeedȱstatedȱthatȱeachȱlotȱwasȱtoȱbeȱassessedȱ

anȱannualȱfeeȱforȱuseȱandȱmaintenanceȱofȱtheȱcommonȱareas,ȱwhichȱcontainedȱaȱ

clubhouse,ȱpools,ȱtennisȱcourts,ȱroads,ȱandȱaȱwaterȱsystem.ȱTheȱdeedȱstatedȱthatȱ

chargedȱEasternȱandȱtheȱotherȱmultipleȱlotȱownersȱaȱseparateȱfeeȱforȱeachȱlotȱ

theyȱowned.ȱEasternȱandȱtheȱotherȱmultipleȱlotȱownersȱrefusedȱtoȱpayȱbasedȱonȱ

theȱagreementȱtheyȱhadȱreachedȱwithȱtheȱChimneyȱHillȱCorporation.ȱTheȱ

Associationȱsuedȱforȱpaymentȱofȱtheȱfees.ȱShouldȱtheyȱreceiveȱthem?ȱExplain.ȱ

2.ȱBuyerȱpurchasedȱaȱhomeȱfromȱSeller.ȱBuyerȱlaterȱdiscoveredȱthatȱtheȱhouseȱwasȱ

widelyȱreputedȱtoȱbeȱhauntedȱwithȱpoltergeists.ȱInȱfact,ȱSellerȱhadȱreportedȱtheȱ

theȱghosts’ȱpresenceȱandȱhadȱfosteredȱitsȱreputationȱasȱaȱhauntedȱhouse.ȱWillȱ

Buyerȱbeȱableȱtoȱhaveȱhisȱmoneyȱreturnedȱandȱtheȱcontractȱcanceledȱ(rescinded)?ȱ

Explain.ȱ[Stambovskyȱv.ȱAckley,ȱ169ȱA.D.ȱ2dȱ254ȱ(N.Y.ȱApp.ȱDiv.ȱ1991)]ȱ

2-90 Chapter 11 Contractual Obligations and Their Enforcement

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ11—1ȱRETEACHȱ

Directions:ȱThisȱgameȱisȱcalledȱIȱHave—WhoȱHas.ȱMakeȱtwoȱcopiesȱofȱtheȱtableȱ

below.ȱKeepȱoneȱcopyȱandȱcutȱtheȱotherȱoneȱintoȱseparateȱpieces.ȱShuffleȱtheȱcardsȱ

andȱgiveȱoneȱtoȱeachȱplayer.ȱReadȱtheȱfirstȱdefinitionȱtoȱtheȱplayers.ȱTheȱstudentȱ

whoȱhasȱthatȱtermȱwillȱthenȱorallyȱreadȱhisȱorȱherȱcard.ȱTheȱgameȱcontinuesȱuntilȱtheȱ

studentȱwhoȱhasȱaȱtermȱbutȱnoȱdefinitionȱreadsȱhisȱorȱherȱcard.ȱ

Firstȱdefinition:ȱȱWhoȱhasȱaȱfailureȱtoȱprovideȱcompleteȱperformanceȱofȱaȱcontract?ȱ

Whoȱhasȱtheȱ

actȱofȱ

replacingȱaȱ

presentȱ

contractȱwithȱ

aȱnewȱ

contract?ȱ

Whoȱhasȱaȱ

paymentȱofȱ

moneyȱinȱ

currencyȱorȱ

coins?ȱ

Whoȱhasȱaȱ

partyȱwhoȱ

receivesȱ

transferredȱ

contractualȱ

rights?ȱ

Whoȱhasȱaȱ

personȱwhoȱ

owesȱaȱdutyȱ

underȱaȱ

contract?ȱ

Whoȱhasȱ

agreementȱtoȱ

changeȱtheȱ

obligationȱofȱ

anȱoriginalȱ

contract?ȱ

situationȱ

whereȱoneȱ

partyȱcommitsȱ

aȱmajorȱbreachȱ

andȱtheȱotherȱ

party’sȱ

obligationȱisȱ

discharged?ȱ

Whoȱhasȱtheȱactȱ

ofȱreleasingȱoneȱ

partyȱbyȱ

acceptingȱtheȱ

performanceȱofȱaȱ

substituteȱparty?ȱ

Whoȱhasȱtheȱ

transferȱofȱaȱ

contractualȱ

right?ȱ

Whoȱhasȱaȱ

contractȱ

situationȱ

whereȱoneȱ

partyȱnotifiesȱ

theȱotherȱthatȱ

heȱorȱsheȱwillȱ

notȱperform?ȱ

breach.ȱ

Whoȱhasȱtheȱ

fulfillmentȱ

ofȱ

contractualȱ

promises?ȱ

Whoȱhasȱtheȱ

performanceȱ

ofȱaȱnewȱ

obligation?ȱ

Whoȱhasȱaȱ

contractȱ

situationȱ

involvingȱtheȱ

performanceȱofȱ

allȱdutiesȱbutȱ

oneȱminorȱduty?ȱ

performance.ȱ

Whoȱhasȱ2ȱ

conditionsȱthatȱ

terminateȱaȱ

contractȱ

requiringȱ

personalȱ

services?ȱ

Whoȱhasȱtheȱ

terminationȱofȱ

dutiesȱthatȱ

ordinarilyȱ

occursȱwhenȱ

theȱpartiesȱ

performedȱasȱ

promised?ȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ11—1ȱENRICHMENTȱ

Theȱtransferȱofȱcontractualȱdutiesȱwasȱdiscussedȱinȱthisȱlesson.ȱGenerally,ȱaȱpartyȱ

mayȱassignȱcontractualȱrightsȱtoȱanother,ȱprovidedȱthatȱperformanceȱwillȱnotȱbeȱ

materiallyȱchanged.ȱHowever,ȱcontractualȱrightsȱmayȱnotȱbeȱassignedȱifȱ

performanceȱwillȱbeȱmateriallyȱchangedȱorȱifȱperformanceȱbecomesȱsubstantiallyȱ

moreȱdifficult.ȱReviewȱtheȱfollowingȱlistȱofȱrightsȱthatȱmayȱnotȱbeȱtransferred,ȱandȱ

fillȱinȱaȱbriefȱsynopsisȱofȱaȱrealȱorȱimaginedȱcaseȱtoȱdescribeȱeachȱright.ȱ

1.ȱAȱrightȱcreatedȱunderȱaȱcontractȱthatȱprohibitsȱtransferȱofȱtheȱcontractualȱrightsȱ

2.ȱClaimsȱforȱdamagesȱforȱpersonalȱinjuriesȱ

3.ȱClaimsȱagainstȱtheȱUnitedȱStatesȱ

4.ȱRightsȱtoȱpersonalȱservices,ȱespeciallyȱthoseȱofȱaȱskilledȱnature,ȱorȱwhenȱ

personalȱtrustȱandȱconfidenceȱareȱinvolvedȱ

2-92 Chapter 11 Contractual Obligations and Their Enforcement

Chapter 11 Contractual Obligations and Their Enforcement 2-93

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ11—2ȱQUIZȱ

Legal Concepts

Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ

whetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱ

ȱȱ Answersȱ

ȱȱ1.ȱAȱpartyȱinjuredȱbyȱbreachȱofȱcontractȱmustȱchooseȱaȱspecificȱremedyȱ

whenȱsuing.ȱ

ȱ1._____ȱ

ȱȱ2.ȱBothȱspecificȱperformanceȱandȱcompensatoryȱdamagesȱcanȱbeȱ

recoveredȱforȱtheȱsameȱbreachȱofȱcontract.ȱ

ȱ2.ȱ_____ȱ

ȱȱ3.ȱAȱpartyȱwhoȱseeksȱequityȱmustȱhaveȱ“cleanȱhands.”ȱȱ3.ȱ_____ȱ

ȱȱ4.ȱAnȱinjuredȱpartyȱusuallyȱmustȱtakeȱreasonableȱstepsȱtoȱmitigateȱ

damages.ȱ

ȱ4.ȱ_____ȱ

ȱȱ5.ȱAȱpartyȱcanȱgiveȱupȱaȱcontractualȱrightȱthroughȱaȱwaiver.ȱȱ5.ȱ_____ȱ

ȱȱ6.ȱWaiversȱcanȱbeȱimpliedȱfromȱconductȱorȱbeȱspecificallyȱstated.ȱȱ6.ȱ_____ȱ

ȱȱ7.ȱAwardsȱmeantȱtoȱpunishȱandȱmakeȱanȱexampleȱofȱaȱdefendantȱareȱ

calledȱpunitiveȱdamages.ȱȱ

ȱ7.ȱ_____ȱ

ȱȱ8.ȱThreeȱyearsȱisȱaȱcommonȱstatuteȱofȱlimitationsȱforȱaȱtort.ȱȱȱ ȱ ȱ8.ȱ_____ȱ

ȱȱ9.ȱTheȱstatuteȱofȱlimitationsȱisȱtheȱsameȱforȱminorsȱandȱthoseȱpersonsȱ

whoȱhaveȱreachedȱtheirȱmajority.ȱ

ȱ9.ȱ_____ȱ

10.ȱAnȱinjuredȱpartyȱwhoȱrecoversȱmoneyȱorȱpropertyȱisȱsaidȱtoȱcollectȱ

consequentialȱdamages.ȱ

10.ȱ_____ȱ

Legal Applications

11.ȱSpringȱHillȱAcademyȱisȱaȱprivateȱschoolȱthatȱchargesȱ$350ȱaȱmonthȱforȱtuitionȱ

dueȱonȱtheȱ15thȱofȱeachȱmonthȱorȱaȱlateȱfeeȱofȱ$25ȱwillȱbeȱcharged.ȱTheȱHenslers’ȱ

andȱplansȱareȱbeingȱmadeȱtoȱchargeȱtheȱlateȱfee.ȱHasȱSpringȱHillȱwaivedȱtheȱ

rightȱtoȱcollectȱlateȱfeesȱonȱfutureȱpaymentsȱfromȱtheȱHenslers?ȱExplainȱyourȱ

answer.ȱ

12.ȱSaraȱMcCloskyȱcontractedȱtoȱbuyȱaȱcanaryȱyellowȱ1967ȱFordȱMustangȱfromȱPaulȱ

Lindstromȱforȱ$7,000.ȱPaulȱdecidedȱheȱwantedȱtoȱkeepȱtheȱcarȱandȱrefusedȱtoȱsellȱ

itȱtoȱSara.ȱWhatȱkindȱofȱremedyȱshouldȱSaraȱseekȱfromȱtheȱcourts?ȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ11—2ȱPRACTICEȱACTIVITYȱ

Readȱtheȱfollowingȱcasesȱandȱanswerȱtheȱquestionsȱaboutȱthem.ȱAttachȱaȱpageȱifȱadditionalȱ

spaceȱisȱneededȱforȱanswers.ȱ

1.ȱJuliusȱErvingȱ(Dr.ȱJ)ȱsignedȱaȱbasketballȱcontractȱforȱfourȱyears,ȱ$500,000ȱperȱ

year,ȱtoȱplayȱwithȱtheȱVirginiaȱSquiresȱBasketballȱClubȱofȱtheȱAmericanȱ

BasketballȱAssociation.ȱAfterȱplayingȱwithȱthemȱforȱoneȱyear,ȱErvingȱleftȱtheȱ

VirginiaȱSquiresȱandȱwentȱtoȱtheȱNationalȱBasketballȱLeague’sȱAtlantaȱHawks.ȱ

ErvingȱsignedȱaȱcontractȱtoȱplayȱwithȱtheȱHawksȱforȱ$1,500,000ȱperȱyear.ȱ

arbitrationȱclauseȱwasȱillegalȱandȱthatȱtheȱABAȱwasȱnotȱwithoutȱaȱremedyȱinȱ

moneyȱdamages.ȱWillȱtheȱcourtȱgrantȱanȱinjunctionȱtoȱtheȱSquires?ȱOnȱappeal,ȱ

theȱappellateȱcourtȱupheldȱtheȱinjunction.ȱExplain.ȱ[Ervingȱv.ȱVirginiaȱSquiresȱ

BasketballȱClub,ȱ468ȱF.ȱ2dȱ1064ȱ(ȱ2dȱCir.ȱ1972)]ȱ

2.ȱShirleyȱMacLaineȱ(Parker)ȱisȱanȱactressȱwhoȱsignedȱtoȱplayȱtheȱfemaleȱleadȱinȱtheȱ

TwentiethȱCenturyȱFoxȱFilmȱCompany’sȱmusical,ȱBloomerȱGirl.ȱSheȱwasȱtoȱbeȱ

paidȱ$750,000.ȱFoxȱnotifiedȱMacLaineȱthatȱitȱwasȱcancelingȱproductionȱofȱthatȱ

Foxȱhadȱofferedȱherȱsimilarȱemploymentȱwhichȱsheȱrefusedȱtoȱtake.ȱIsȱTwentiethȱ

CenturyȱFox’sȱargumentȱlikelyȱtoȱwin?ȱExplain.ȱ[Parkerȱv.ȱTwentiethȱCenturyȱFoxȱ

2-94 Chapter 11 Contractual Obligations and Their Enforcement

Chapter 11 Contractual Obligations and Their Enforcement 2-95

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ11—2ȱRETEACHȱ

Directions:ȱWriteȱtheȱnumbersȱ1–20ȱonȱindexȱcardsȱinȱlargeȱprint.ȱOnȱtheȱotherȱsideȱ

ofȱtheȱcard,ȱwriteȱtheȱdefinitionȱorȱtermȱthatȱisȱshownȱbyȱeachȱnumberȱbelow.ȱTapeȱ

theȱcardsȱtoȱaȱchalkboardȱinȱtheȱpatternȱbelowȱwithȱtheȱnumbersȱfacingȱtheȱstudents.ȱ

Divideȱtheȱstudentsȱintoȱfourȱorȱfiveȱteams.ȱEachȱteamȱshouldȱchooseȱaȱcaptainȱtoȱ

answerȱforȱthem.ȱTheȱteamȱcaptainȱwillȱchooseȱanyȱtwoȱnumbers.ȱReadȱtheȱcontentsȱ

onȱtheȱbackȱofȱtheȱcardsȱoutȱloud.ȱIfȱtheȱtwoȱchosenȱcardsȱformȱaȱcorrectȱmatchȱofȱaȱ

termȱandȱitsȱdefinition,ȱtheyȱareȱremovedȱfromȱtheȱchalkboardȱandȱthatȱteamȱscoresȱ

aȱpoint.ȱIfȱtheȱcardsȱdoȱnotȱmakeȱaȱcorrectȱmatch,ȱtheȱnextȱteamȱmayȱtakeȱaȱturn.ȱ

Note:ȱDoȱnotȱallowȱtheȱstudentsȱtoȱhaveȱanythingȱtoȱwriteȱwithȱduringȱtheȱgame.ȱ

Cardȱ1ȱ

Anȱagreementȱtoȱ

giveȱupȱaȱ

contractualȱrightȱ

Cardȱ2ȱ

Anȱawardȱthatȱ

grantsȱtheȱbenefitȱ

ofȱtheȱbargainȱ

Cardȱ3ȱ

cleanȱhandsȱ

Cardȱ4ȱ

punitiveȱdamagesȱ

Cardȱ17ȱ

compensatoryȱ

damagesȱ

Cardȱ18ȱ

Anȱawardȱthatȱisȱ

meantȱtoȱpunishȱȱ

theȱdefendantȱ

Cardȱ19ȱ

Theȱideaȱthatȱtheȱ

partyȱseekingȱaȱ

specificȱ

performanceȱ

remedyȱmustȱbeȱ

blamelessȱ

Cardȱ20ȱ

nominalȱdamagesȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ11—2ȱENRICHMENTȱ

Inȱthisȱlesson,ȱyouȱreviewedȱtheȱconceptȱofȱstatutesȱofȱlimitations.ȱTheseȱareȱlawsȱ

thatȱdenyȱanyȱremedyȱifȱaȱsuitȱisȱnotȱcommencedȱwithinȱaȱcertainȱtimeȱafterȱaȱlegalȱ

claimȱarises,ȱsuchȱasȱaȱbreachȱofȱcontract.ȱBecauseȱtheȱtimeȱperiodsȱonȱtheȱstatutesȱofȱ

limitationsȱvaryȱfromȱstateȱtoȱstate,ȱresearchȱtheȱlawsȱinȱyourȱstateȱandȱanswerȱtheȱ

questionsȱthatȱfollow.ȱ

1.ȱWhatȱisȱtheȱstatuteȱofȱlimitationsȱforȱcontractsȱinȱyourȱstate?ȱ

2.ȱDoesȱyourȱstateȱallowȱmoreȱtimeȱtoȱsueȱonȱwrittenȱcontractsȱthanȱonȱoralȱones?ȱ

3.ȱWhatȱisȱtheȱstatuteȱofȱlimitationsȱforȱtortsȱinȱyourȱstate?ȱ

4.ȱHowȱmuchȱtimeȱisȱaȱminorȱgivenȱafterȱreachingȱmajorityȱtoȱfileȱsuit?ȱ

2-96 Chapter 11 Contractual Obligations and Their Enforcement

STUDENT _______________________________________ CLASS _______________________ DATE _________

TESTȱ

CHAPTERȱ11ȱ

SECTION I—IDENTIFY LEGAL TERMS

Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ

whetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱ

ȱȱ Answersȱ

ȱȱ1.ȱContractualȱrightsȱmayȱbeȱtransferredȱtoȱanotherȱpersonȱbyȱȱ

assignment;ȱcontractualȱdutiesȱmayȱbeȱtransferredȱtoȱanotherȱpersonȱ

byȱdelegation.ȱ

ȱ1.ȱ_____ȱ

ȱȱ2.ȱPerformanceȱisȱtheȱfulfillmentȱofȱcontractualȱpromisesȱasȱagreed.ȱȱ2.ȱ_____ȱ

ȱȱ3.ȱAȱpersonȱcannotȱdelegateȱtoȱanotherȱanyȱdutyȱwhereȱperformanceȱ

requiresȱuniqueȱpersonalȱskillȱorȱspecialȱqualifications.ȱ

ȱ3.ȱ_____ȱ

ȱȱ4.ȱIfȱtheȱobligorȱbreaches,ȱtheȱassignorȱmustȱsueȱforȱbreachȱofȱcontract.ȱȱ4.ȱ_____ȱ

ȱȱ5.ȱRestitutionȱisȱtheȱprocedureȱfollowedȱtoȱenforceȱaȱrightȱorȱtoȱgetȱ

damagesȱforȱanȱinjuryȱtoȱaȱright.ȱ

ȱ5.ȱ_____ȱ

ȱȱ6.ȱDischargeȱbyȱcommercialȱimpracticabilityȱdisallowsȱtheȱ

cancellationȱofȱobligationsȱunderȱsalesȱcontractsȱwhenȱ

unanticipatedȱeventsȱraiseȱtheȱcostȱofȱperformanceȱbeyondȱtheȱ

parties’ȱexpectationsȱduringȱpreȬcontractualȱbargaining.ȱ

ȱ6.ȱ_____ȱ

ȱȱ7.ȱInȱaȱminorȱbreach,ȱtheȱinjuredȱpartyȱmustȱcontinueȱtoȱperformȱhisȱ

dutiesȱunderȱtheȱcontract.ȱ

ȱ7.ȱ_____ȱ

ȱȱ8.ȱȱ Theȱactualȱperformanceȱofȱtheȱnewȱobligationȱisȱcalledȱaȱrescission.ȱȱ ȱ8.ȱ_____ȱ

ȱȱ9.ȱȱ Aȱremedyȱmeansȱtheȱactionȱofȱprocedureȱfollowedȱtoȱenforceȱaȱrightȱ

orȱtoȱgetȱdamagesȱforȱanȱinjuryȱtoȱaȱright.ȱ

ȱ9.ȱ_____ȱ

10.ȱAȱpartyȱinjuredȱbyȱaȱbreachȱofȱcontractȱisȱrequiredȱbyȱlawȱtoȱ

mitigateȱtheȱdamages.ȱ

10._____ȱ

SECTION II—THINK CRITICALLY ABOUT LEGAL CONCEPTS

Directions:ȱInȱtheȱAnswersȱcolumnȱatȱtheȱrightȱofȱeachȱstatement,ȱwriteȱtheȱletterȱthatȱ

representsȱtheȱword,ȱorȱgroupȱofȱwords,ȱthatȱcorrectlyȱcompletesȱtheȱstatement.ȱ

ȱȱ Answersȱ

11.ȱAȱpartyȱmayȱassignȱcontractualȱrightsȱtoȱanotherȱprovidedȱ(a)ȱ

performanceȱwouldȱbeȱmateriallyȱchanged,ȱ(b)ȱperformanceȱ

becomesȱsubstantiallyȱmoreȱdifficult,ȱ(c)ȱperformanceȱwillȱnotȱbeȱ

materiallyȱchanged,ȱ(d)ȱthereȱareȱpersonalȱinjuryȱclaimsȱ

11.ȱ_____ȱ

12.ȱAȱpersonȱwhoȱdelegatesȱcontractualȱdutiesȱtoȱanotherȱpartyȱ(a)ȱisȱ

stillȱlegallyȱobligatedȱandȱresponsibleȱforȱproperȱperformanceȱ

evenȱthoughȱsomeoneȱelseȱmayȱactuallyȱdoȱtheȱwork,ȱ(b)ȱmustȱ

postȱaȱbondȱtoȱassureȱproperȱperformanceȱofȱtheȱcontract,ȱ(c)ȱhasȱ

noȱfurtherȱobligationȱunderȱtheȱcontract,ȱ(d)ȱnoneȱofȱtheseȱ

12.ȱ_____ȱ

13.ȱWhenȱaȱgeneralȱcontractorȱagreesȱtoȱbuildȱaȱhouse,ȱheȱgenerallyȱ

(a)ȱperformsȱallȱtheȱworkȱhimself,ȱ(b)ȱdelegatesȱmostȱofȱtheȱworkȱ

toȱindependentȱsubcontractors,ȱ(c)ȱinstructsȱtheȱbuyerȱofȱtheȱhouseȱ

onȱhowȱtoȱdoȱtheȱwork,ȱ(d)ȱnoneȱofȱtheseȱ

13.ȱ_____ȱ

14.

Theȱsignificanceȱandȱclassificationȱofȱanyȱbreachȱisȱanȱissueȱofȱfactȱ

toȱbeȱdecidedȱbyȱ(a)ȱtheȱpartiesȱinvolved,ȱ(b)ȱaȱpanelȱofȱexpertsȱ

withinȱthatȱtrade,ȱ(c)ȱaȱjudgeȱorȱjury,ȱ(d)ȱbothȱaȱandȱbȱ

14.ȱ_____ȱ

15.ȱTheȱbasicȱremediesȱforȱmajorȱbreachȱofȱcontractȱdoȱnotȱincludeȱ(a)ȱ

imprisonment,ȱ(b)ȱmoneyȱdamages,ȱ(c)ȱrescissionȱandȱrestitution,ȱ

(d)ȱspecificȱperformanceȱȱ

15.ȱ_____ȱ

16.

Restitutionȱisȱ(a)ȱpermittingȱtheȱinjuredȱpartyȱtoȱrecoverȱmoneyȱorȱ

propertyȱgivenȱtoȱtheȱdefaultingȱparty,ȱ(b)ȱusuallyȱavailableȱwhenȱ

oneȱpartyȱhasȱdeliveredȱsomethingȱofȱvalueȱtoȱtheȱotherȱinȱanȱ

attemptȱtoȱcontract,ȱ(c)ȱbothȱaȱandȱb,ȱ(d)ȱnoneȱofȱtheseȱ

16.ȱ_____ȱ

17.

Consequentialȱdamagesȱmayȱbeȱgrantedȱforȱ(a)ȱtheȱforeseeableȱ

injuriesȱcausedȱbyȱtheȱbreach,ȱ(b)ȱaȱmajorȱbreach,ȱ(c)ȱaȱminorȱ

breach,ȱ(d)ȱallȱofȱtheseȱ

17.ȱ_____ȱ

18.

Damagesȱdesignedȱtoȱpunishȱandȱmakeȱanȱexampleȱofȱtheȱ

defendantȱareȱ(a)ȱspecific,ȱ(b)ȱliquidated,ȱ(c)ȱpunitive,ȱ(d)ȱnominalȱ

18.ȱ_____ȱ

19.ȱWhenȱtheȱonlyȱappropriateȱremedyȱforȱbreachȱofȱcontractȱisȱtoȱ

orderȱtheȱbreachingȱpartyȱtoȱdoȱexactlyȱwhatȱwasȱrequiredȱunderȱ

theȱcontract,ȱtheȱremedyȱisȱtermedȱtheȱremedyȱofȱ(a)ȱinjunction,ȱ

(b)ȱspecificȱperformance,ȱ(c)ȱmitigation,ȱ(d)ȱwaiversȱ

19.ȱ_____ȱ

discharge,ȱ(b)ȱaccord,ȱ(c)ȱtender,ȱ(d)ȱsubstantialȱperformanceȱȱ

2-98 Chapter 11 Contractual Obligations and Their Enforcement

SECTION III—APPLY LEGAL PRACTICES

21.ȱDuaneȱcontractedȱwithȱtheȱEddyȱBrothersȱtoȱhaveȱaȱnewȱroofȱinstalledȱonȱhisȱhouse.ȱ

Afterȱremovingȱtheȱoldȱroof,ȱtheȱEddyȱBrothersȱmovedȱonȱtoȱanotherȱjob.ȱHowever,ȱ

theyȱsentȱtheȱRossȱBrothersȱtoȱfinishȱtheȱroof.ȱWithinȱaȱyear,ȱtheȱnewȱroofȱwasȱ

leaking.ȱWhoȱisȱliable,ȱEddyȱBrothers,ȱRossȱBrothers,ȱorȱboth?ȱ

22.ȱKathyȱhadȱanȱagreementȱwithȱtheȱlocalȱmedicalȱgroup.ȱTheȱtermsȱwereȱthatȱsheȱ

wouldȱworkȱforȱthemȱforȱtwoȱyearsȱatȱaȱspecifiedȱrateȱafterȱcompletionȱofȱherȱ

schoolingȱtoȱrepayȱtheirȱinvestmentȱinȱherȱschooling.ȱAfterȱworkingȱoneȱyearȱofȱherȱ

term,ȱtheȱclinicȱhadȱtoȱdoȱsomeȱmajorȱcutbacksȱtoȱoffsetȱrisingȱmedicalȱcosts.ȱTheyȱ

cutȱherȱhoursȱandȱherȱrateȱofȱpay,ȱmakingȱitȱimpossibleȱforȱherȱtoȱrepayȱherȱ

indebtednessȱwithinȱtheȱtwoȱyears’ȱtime.ȱHowȱdoesȱthisȱaffectȱherȱcontract?ȱ

23.ȱRaulȱagreedȱtoȱbuyȱTom’sȱtruckȱforȱ$1,200ȱwithȱtheȱunderstandingȱthatȱonceȱhalfȱtheȱ

amountȱhadȱbeenȱpaid,ȱheȱcouldȱtakeȱpossession.ȱAfterȱpayingȱTomȱ$400,ȱRaulȱfoundȱ

aȱbetterȱtruckȱforȱaȱlowerȱpriceȱandȱaskedȱTomȱforȱhisȱ$400ȱback.ȱDidȱRaulȱandȱTomȱ

haveȱanȱenforceableȱcontract?ȱIfȱso,ȱwhatȱremedyȱisȱdueȱTom?ȱ

24.ȱAȱfloristȱagreedȱtoȱdoȱtheȱflowerȱarrangementsȱforȱherȱfriend’sȱwedding.ȱWhenȱtheȱ

flowersȱarrived,ȱhowever,ȱtheyȱwereȱtheȱwrongȱflowers,ȱwrongȱcolors,ȱandȱnotȱwhatȱ

theȱbrideȱhadȱordered.ȱTheȱcoupleȱputȱaȱ50ȱpercentȱdownȱpaymentȱonȱtheȱflowers,ȱ

withȱtheȱremainderȱdueȱuponȱdelivery.ȱWhatȱremedyȱcouldȱbeȱavailableȱtoȱtheȱ

weddingȱcouple?ȱ

ANSWERS

Lessonȱ11—1ȱ

Quiz

11.ȱItȱisȱlegalȱforȱgeneralȱcontractorsȱtoȱdelegateȱworkȱtoȱskilledȱsubcontractors.ȱTheȱ

12.ȱThisȱisȱanȱanticipatoryȱbreach.ȱMattȱcanȱwaitȱforȱtheȱworkȱtoȱbeȱdoneȱorȱsueȱforȱ

Practice Activity

1.ȱNo,ȱtheȱChimneyȱHillȱOwnersȱAssociationȱwillȱnotȱreceiveȱtheȱfees.ȱTheȱcourtȱruledȱ

inȱfavorȱofȱtheȱmultipleȱlotȱowners,ȱfindingȱthatȱtheȱAssociation’sȱassignmentȱwasȱ

subjectȱtoȱtheȱagreementȱbetweenȱtheȱmultipleȱlotȱownersȱandȱtheȱCorporation.ȱThatȱ

2.ȱYes,ȱtheȱcourtȱdeterminedȱthatȱunderȱtheseȱcircumstances,ȱBuyerȱshouldȱbeȱableȱtoȱ

rescindȱtheȱcontractȱandȱgetȱhisȱmoneyȱback.ȱBuyerȱhadȱnoȱwayȱofȱknowingȱaboutȱ

Reteach

2-100 Chapter 11 Contractual Obligations and Their Enforcement

Chapter 11 Contractual Obligations and Their Enforcement 2-101

Enrichment Activity

Answersȱwillȱvary.ȱ

Lessonȱ11—2ȱ

Quiz

12.ȱTheȱcarȱisȱconsideredȱaȱuniqueȱsubjectȱmatter.ȱTheȱcourtsȱwouldȱlikelyȱgrantȱaȱdegreeȱ

Practice Activity

1.ȱYes,ȱtheȱcourtȱgrantedȱtheȱinjunctionȱtheȱVirginiaȱSquiresȱrequested.ȱTheȱcourtȱsaidȱ

thatȱwhereȱaȱprofessionalȱbasketballȱclubȱhavingȱaȱcontractȱwithȱaȱplayerȱthatȱplainlyȱ

2.ȱNo,ȱTwentiethȱCenturyȱFox’sȱargumentȱwillȱnotȱwin.ȱTheȱcourtȱfoundȱthereȱtoȱbeȱaȱ

Reteach

Enrichment Activity

Answersȱwillȱvary.ȱ

ANSWERS TO TEST QUESTIONS

SECTION I

SECTION II

SECTIONȱIIIȱ

21.ȱEddyȱBrothers.ȱTheyȱdelegatedȱtheirȱcontractualȱdutiesȱbutȱtheyȱremainȱobligatedȱ

22.ȱAsȱaȱgeneralȱrule,ȱaȱcontractȱisȱnotȱdischargedȱwhenȱunforeseenȱeventsȱmakeȱ

23.ȱYes.ȱThereȱwasȱanȱofferȱandȱanȱacceptance.ȱIfȱRaulȱbreachesȱtheȱcontract,ȱ

24.ȱTheȱcouple’sȱonlyȱremedyȱwouldȱbeȱmoneyȱdamages;ȱasȱtheȱflowersȱwereȱ