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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
ȱ
10.ȱTheȱactualȱperformanceȱofȱaȱnewȱcontractualȱobligationȱisȱ
calledȱa(n)ȱ____?_____.ȱ10.___________________ȱ
LegalȱApplicationsȱ
11.ȱȱKeishaȱArthurȱhiredȱaȱgeneralȱcontractorȱtoȱbuildȱherȱnewȱhomeȱwhoȱinȱturnȱ
delegatedȱmostȱofȱtheȱworkȱtoȱfourȱindependentȱsubcontractors.ȱIsȱthisȱaȱlegalȱ
delegationȱofȱduties?ȱIsȱtheȱgeneralȱcontractorȱresponsibleȱforȱtheȱsubcontractors’ȱ
work?ȱExplainȱyourȱanswer.ȱ
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
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
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
ȱ
STUDENT _______________________________________ CLASS _______________________ DATE _________
ȱLESSONȱ11—1ȱENRICHMENTȱ
Theȱtransferȱofȱcontractualȱdutiesȱwasȱdiscussedȱinȱthisȱlesson.ȱGenerally,ȱaȱpartyȱ
mayȱassignȱcontractualȱrightsȱtoȱanother,ȱprovidedȱthatȱperformanceȱwillȱnotȱbeȱ
materiallyȱchanged.ȱHowever,ȱcontractualȱrightsȱmayȱnotȱbeȱassignedȱifȱ
performanceȱwillȱbeȱmateriallyȱchangedȱorȱifȱperformanceȱbecomesȱsubstantiallyȱ
moreȱdifficult.ȱReviewȱtheȱfollowingȱlistȱofȱrightsȱthatȱmayȱnotȱbeȱtransferred,ȱandȱ
fillȱinȱaȱbriefȱsynopsisȱofȱaȱrealȱorȱimaginedȱcaseȱtoȱdescribeȱeachȱright.ȱ
1.ȱAȱrightȱcreatedȱunderȱaȱcontractȱthatȱprohibitsȱtransferȱofȱtheȱcontractualȱrightsȱ
ȱ
ȱ
ȱ
ȱ
ȱ
2.ȱClaimsȱforȱdamagesȱforȱpersonalȱinjuriesȱ
ȱ
ȱ
ȱ
ȱ
ȱ
3.ȱClaimsȱagainstȱtheȱUnitedȱStatesȱ
ȱ
ȱ
ȱ
ȱ
ȱ
4.ȱRightsȱtoȱpersonalȱservices,ȱespeciallyȱthoseȱofȱaȱskilledȱnature,ȱorȱwhenȱ
personalȱtrustȱandȱconfidenceȱareȱinvolvedȱ
ȱ
ȱ
ȱ
ȱ
ȱ
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
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
ȱ
ȱ
ȱ
ȱ
ȱ
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
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
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
2.ȱDoesȱyourȱstateȱallowȱmoreȱtimeȱtoȱsueȱonȱwrittenȱcontractsȱthanȱonȱoralȱones?ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
3.ȱWhatȱisȱtheȱstatuteȱofȱlimitationsȱforȱtortsȱinȱyourȱstate?ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
4.ȱHowȱmuchȱtimeȱisȱaȱminorȱgivenȱafterȱreachingȱmajorityȱtoȱfileȱsuit?ȱ
2-96 Chapter 11 Contractual Obligations and Their Enforcement
STUDENT _______________________________________ CLASS _______________________ DATE _________
ȱ
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.
ȱ
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.
ȱ
Restitutionȱisȱ(a)ȱpermittingȱtheȱinjuredȱpartyȱtoȱrecoverȱmoneyȱorȱ
propertyȱgivenȱtoȱtheȱdefaultingȱparty,ȱ(b)ȱusuallyȱavailableȱwhenȱ
oneȱpartyȱhasȱdeliveredȱsomethingȱofȱvalueȱtoȱtheȱotherȱinȱanȱ
attemptȱtoȱcontract,ȱ(c)ȱbothȱaȱandȱb,ȱ(d)ȱnoneȱofȱtheseȱ
16.ȱ_____ȱ
17.
ȱ
Consequentialȱdamagesȱmayȱbeȱgrantedȱforȱ(a)ȱtheȱforeseeableȱ
injuriesȱcausedȱbyȱtheȱbreach,ȱ(b)ȱaȱmajorȱbreach,ȱ(c)ȱaȱminorȱ
breach,ȱ(d)ȱallȱofȱtheseȱ
17.ȱ_____ȱ
18.
ȱ
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
ȱ
ȱ
ȱ
ȱ
ȱ
22.ȱKathyȱhadȱanȱagreementȱwithȱtheȱlocalȱmedicalȱgroup.ȱTheȱtermsȱwereȱthatȱsheȱ
wouldȱworkȱforȱthemȱforȱtwoȱyearsȱatȱaȱspecifiedȱrateȱafterȱcompletionȱofȱherȱ
schoolingȱtoȱrepayȱtheirȱinvestmentȱinȱherȱschooling.ȱAfterȱworkingȱoneȱyearȱofȱherȱ
term,ȱtheȱclinicȱhadȱtoȱdoȱsomeȱmajorȱcutbacksȱtoȱoffsetȱrisingȱmedicalȱcosts.ȱTheyȱ
cutȱherȱhoursȱandȱherȱrateȱofȱpay,ȱmakingȱitȱimpossibleȱforȱherȱtoȱrepayȱherȱ
indebtednessȱwithinȱtheȱtwoȱyears’ȱtime.ȱHowȱdoesȱthisȱaffectȱherȱcontract?ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
23.ȱRaulȱagreedȱtoȱbuyȱTom’sȱtruckȱforȱ$1,200ȱwithȱtheȱunderstandingȱthatȱonceȱhalfȱtheȱ
amountȱhadȱbeenȱpaid,ȱheȱcouldȱtakeȱpossession.ȱAfterȱpayingȱTomȱ$400,ȱRaulȱfoundȱ
aȱbetterȱtruckȱforȱaȱlowerȱpriceȱandȱaskedȱTomȱforȱhisȱ$400ȱback.ȱDidȱRaulȱandȱTomȱ
haveȱanȱenforceableȱcontract?ȱIfȱso,ȱwhatȱremedyȱisȱdueȱTom?ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
ȱ
24.ȱAȱfloristȱagreedȱtoȱdoȱtheȱflowerȱarrangementsȱforȱherȱfriend’sȱwedding.ȱWhenȱtheȱ
flowersȱarrived,ȱhowever,ȱtheyȱwereȱtheȱwrongȱflowers,ȱwrongȱcolors,ȱandȱnotȱwhatȱ
theȱbrideȱhadȱordered.ȱTheȱcoupleȱputȱaȱ50ȱpercentȱdownȱpaymentȱonȱtheȱflowers,ȱ
withȱtheȱremainderȱdueȱuponȱdelivery.ȱWhatȱremedyȱcouldȱbeȱavailableȱtoȱtheȱ
weddingȱcouple?ȱ
ANSWERS
Lessonȱ11—1ȱ
Quiz
ȱ
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
ȱ
12.ȱTheȱcarȱisȱconsideredȱaȱuniqueȱsubjectȱmatter.ȱTheȱcourtsȱwouldȱlikelyȱgrantȱaȱdegreeȱ
ȱ
Practice Activity
1.ȱYes,ȱtheȱcourtȱgrantedȱtheȱinjunctionȱtheȱVirginiaȱSquiresȱrequested.ȱTheȱcourtȱsaidȱ
thatȱwhereȱaȱprofessionalȱbasketballȱclubȱhavingȱaȱcontractȱwithȱaȱplayerȱthatȱplainlyȱ
ȱ
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
