Chapter 12- Contract Performance

Question 1

Accord and Satisfaction

Answer 1

An agreement and payment (or other performance) between two parties, one of whom has a right of action against the other.

Question 2

Anticipatory Repudiation

Answer 2

An assertion or action by a party indicating that he or she will not perform an obligation that the party is contractually obligated to perform at a future time.

Question 3

Assignment

Answer 3

The act of transferring to another all or part of one’s rights arising under a contract.

Question 4

Bilateral Mistake

Answer 4

A mistake that occurs when both parties to a contract are mistaken about the same material fact.

Question 5

Breach of Contract

Answer 5

The failure, without legal excuse, of a promisor to perform the obligations of a contract.

Question 6

Commercial Impracticability

Answer 6

A doctrine under which a court may excuse the parties from performing a contract when the performance becomes much more difficult or costly due to an event that the parties did not foresee or anticipate at the time the contract was made.

Question 7

Condition

Answer 7

A qualification, provision, or clause in a contractual agreement. The occurrence or nonoccurrence of the condition creates, suspends, or terminates the obligations of the contracting parties.

Question 8

Condition Precedent

Answer 8

In a contractual agreement, a condition that must be met before a party’s promise becomes absolute.

Question 9

Consequential Damages

Answer 9

Special damages that compensate for a loss that is not direct or immediate.

Question 10

Delegation

Answer 10

The transfer of a contractual duty to a third party.

Question 11

Discharge

Answer 11

The termination of one’s obligation under a contract.

Question 12

Impossibility of Performance

Answer 12

A doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes objectively impossible or totally impracticable (through no fault of either party).

Question 13

Incidental Beneficiary

Answer 13

A third party who incidentally benefits from a contract but whose benefit was not the reason the contract was formed.

Question 14

Intended Beneficiary

Answer 14

A third party for whose benefit a contract is formed and who can sue the promisor if the contract is breached.

Question 15

Liquidated Damages

Answer 15

An amount, stipulated in a contract, that the parties to the contract believe to be a reasonable estimate of the damages that will occur in the event of a breach.

Question 16

Mitigation of Damages

Answer 16

A rule requiring a plaintiff to do whatever is reasonable to minimize the damages caused by the defendant.

Question 17

Mutual Rescission

Answer 17

An agreement between the parties to cancel their contract, releasing the parties from further obligations under the contract.

Question 18

Novation

Answer 18

The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated.

Question 19

Penalty

Answer 19

A sum named in a contract as punishment for a default.

Question 20

Performance

Answer 20

The fulfillment of one’s duties arising under a contract.

Question 21

Quasi Contract

Answer 21

A fictional contract imposed on parties by a court in the interests of fairness and justice.

Question 22

Reformation

Answer 22

A court-ordered correction of a written contract so that it reflects the true intentions of the parties.

Question 23

Restitution

Answer 23

An equitable remedy under which a person is restored to his or her original position before formation of a contract.

Question 24

Scienter

Answer 24

Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

Question 25

Specific Performance

Answer 25

An equitable remedy requiring exactly the performance that was specified in a contract. Usually, it is granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique (for example, real property).

Question 26

Statute of Frauds

Answer 26

A state statute under which certain types of contracts must be in writing to be enforceable.

Question 27

Tender

Answer 27

A timely offer or expression of willingness to pay a debt or perform an obligation.

Question 28

Third Party Beneficiary

Answer 28

One for whose benefit a promise is made in a contract but who is not a party to the contract.

Question 29

Unilateral Mistake

Answer 29

A mistake that occurs when one party to a contract is mistaken as to a material fact.

Question 30

Voluntary Consent

Answer 30

Knowledge of, and genuine assent to, the terms of a contract.

Question 31

If you do not voluntary consent to a contract, you may

Answer 31

Rescind or cancel the contract. You may cancel a contract to which you have not genuinely assented

Question 32

Mistakes of fact occur in two forms. What are they?

Answer 32

Unilateral and mutual. Mistakes of fact may be unilateral (made by one party) and mutual (made by both parties)

Question 33

What are the elements of fraud?

Answer 33

Scienter, relied on misrepresentation, misrepresentation must concern material fact NOT party being under 21 years of age

Question 34

What is covered by the Statute of Frauds?

Answer 34

sale of land, sale of a new car, sale of right to trespass NOT sale of a textbook (below $500)

Question 35

The transfer of contract rights to a third person is known as

Answer 35

An assignment; occurs when contract rights are transferred to a third party.

Question 36

With respect to a contract, a condition is

Answer 36

An event, the occurrence or nonoccurrence of which triggers the performance of a contractual obligation or terminates an existing obligation

Question 37

The most common way to discharge, or terminate, contractual duties is

Answer 37

By performance Most contractual duties are discharged by performance

Question 38

When a party to a contract breaches the contract, the other party is legally entitled to:

Answer 38

Monetary damages Because the nonbreaching party has been harmed, he or she is entitled to monetary damages

Question 39

Which of the following is not an equitable remedy?

Answer 39

Money damages. This is a remedy at law, not an equitable remedy

Question 40

In order to prevent plaintiffs from recovering twice, plaintiffs are required under the common law to:

Answer 40

elect which remedy they wish to pursue. Plaintiffs must elect which remedy they wish to seek in order to prevent double recovery