CHAPTER 7 CONTRACTS quiz

Question 1

The doctrine of substantial performance is applied often in…?

Answer 1

construction contracts.

Question 2

………… is when the court awards a non-breaching party a money award sufficient to place the non-breaching party in the same financial position they would have been in if the breaching party had performed as required under the contract.

Answer 2

A compensatory damages award

Question 3

………… is when a court orders a party to perform the exact obligations set forth in the contract.

Answer 3

A specific performance award

Question 4

Phillip and Mandy make a contract. Mandy breaches. Phillip waits 7 years to sue on the contract. He loses, and the judge rules in Mandy’s favor. What is the most likely reason for his loss?

Answer 4

Statute of limitations

Question 5

In ………… agreement, a real estate agent does not need to worry about competition from other agents.

Answer 5

an exclusive right to sell listing

Question 6

Oswald wants to sell his house. In September, he puts a hand-lettered sign in front of his house that reads, “I, Oswald, will sell this house to the first person who gives me $100,000 before the end of the year.” Theodore brings Oswald $100,000 in small, unmarked bills on December 29th. Does Oswald have to sell?

Answer 6

Yes. Theodore’s performance makes Oswald’s unilateral contract enforceable.

Question 7

A complete contract that has been reduced to writing is…?

Answer 7

an express contract

Question 8

Max is a newly licensed real estate agent. He gets a position with a brokerage firm that plans to pay him commissions, not a salary. What kind of contract might Max want to make with his new firm?

Answer 8

An independent contractor agreement

Question 9

Which answer best describes a provision that could be part of a sales contract?

Answer 9

All the provisions described here
BA provision allowing the buyer to terminate the deal if a home inspection is unsatisfactory
CA provision requiring the seller to install red velvet drapes in every southern window of the house
DA provision allowing the seller to terminate the sale if the seller’s contract for a job in another state is canceled before closing

Question 10

The essential elements of a contract include offer and acceptance, consideration, legal capacity, and…?

Answer 10

Legal purpose

Question 11

Humboldt says, “I will sell you my dog next Friday for the sum of $50 and a bag of peanuts.” Leroy replies, “I cannot make it next Friday, and I am allergic to peanuts. However, I would gladly buy your dog next Saturday morning for $50 and a bag of potato chips.” This exchange is an example of…?

Answer 11

All of the answer choices provided are correct
Ba rejection
Ca failure of the mirror image rule
Doffer and counteroffer

Question 12

Taken altogether, offer, rejection, counteroffer, and acceptance make up…?

Answer 12

All of the answer choices provided are correct
Bbargaining.
Ccontract negotiation.
Dmeeting of the minds.

Question 13

Palmer is 80 years old. He gives Maxwell a contract that reads, “In consideration of the love and affection Maxwell has shown and will show me, I agree to give Maxwell $500 a year for the next 10 years.” Do they have a contract?

Answer 13

No. There is no consideration.

Question 14

Thelma asks Louise to help her sell her house. Louise asks Thelma if she had a starting price in mind. Thelma says, “You know, I just need to get $250,000 from the sale. If you find a buyer, you can keep anything over $250,000 as your commission.” Louise agrees. This example best describes which of the following…?

Answer 14

A net listing agreement

Question 15

The statute of frauds requires what kind of contracts to be in writing?

Answer 15

Contracts involving the sale of land.

Question 16

Which of the following is necessary to create a valid contract?

Answer 16

Consideration

Question 17

Which is not a legal effect of a valid contract?

Answer 17

The parties can be jailed for failing to perform.

Question 18

The duty to perform in good faith is…?

Answer 18

consistent with our expectations when we make a contract.

Question 19

Which of the following can a court award while enforcing a contract?

Answer 19

Expectation damages

Question 20

When the parties have fully performed all their obligations under a contract, the contract is called…?

Answer 20

an executed contract.

Question 21

Melinda and Sasha enter into a written sales contract for Melinda’s home. Two weeks before closing, Sasha works on finalizing her loan documents and schedules a home inspection for three days before closing. Melinda works on some agreed repairs and hires a lawyer to write her deed. At this point, Melinda and Sasha’s contract is…?

Answer 21

an executory contract.

Question 22

A contract that lacks consideration can be called…?

Answer 22

a void contract

Question 23

Hubert hires Thomas to build a casino in downtown Funsville. The contract provides that the casino must be completed within a year, but does not specify when Thomas must start. Thomas begins to build the casino seven months into the contract. In the eighth month, Funsville enacts a law banning all casinos and prohibiting any casinos from being built or operated. Hubert and Thomas’s contract might have become…?

Answer 23

void.

Question 24

An unenforceable contract is…?

Answer 24

a contract that lacks an essential element

Question 25

If the parties still have obligations to perform under their contract, then their contract is…?

Answer 25

executory.

Question 26

Bill is buying Sue’s house for $250,000. When they arrive at closing, Bill doesn’t have the money, and Sue doesn’t have a deed. Who breached the contract?

Answer 26

Both of them

Question 27

What’s the best way to terminate a contract?

Answer 27

Full performance by both parties

Question 28

Which is an example of an assignment?

Answer 28

All of the answer choices provided are correct.
BAssigning a lease to a new tenant
CSelling a mortgage loan
DSelling someone a subway token

Question 29

Sasha asks a real estate agent to help her sell her house. Sasha ends up finding a buyer for the house. At the closing, no agent receives a commission. What type of listing agreement did Sasha make?

Answer 29

An exclusive agency listing

This is an exclusive agency listing since the owner does not have to pay a commission if they find the buyer themselves.

Question 30

What’s the primary factor for determining whether a contract can be assigned?

Answer 30

The contract

Question 31

………… is when one person agrees to take on the duties and benefits of another’s contract.

Answer 31

Assignment

Question 32

………… occurs when you terminate one contractual obligation and substitute a new one for it.

Answer 32

Novation

Question 33

Which of the following is NOT a major way to discharge a contract?

Answer 33

Casual disregard

Question 34

Which is the best way to discharge a contract?

Answer 34

Full performance by both parties

Question 35

If the parties mutually agree to terminate a contract, the original contract becomes…?

Answer 35

unenforceable