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performance of contract Flashcards

1
Q
  1. Define performance in the context of a contract.
A

Answer: Performance refers to fulfilling the promise made under the contract.

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2
Q
  1. What is actual performance?
A

Answer: Actual performance occurs when a promisor fulfills the promise, and the promisee accepts it.

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3
Q
  1. What is attempted performance?
A

Answer: Attempted performance, also known as tendered or offered performance, happens when a promisor offers to perform the contract according to its terms, but the promisee does not accept it.

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4
Q
  1. What are the essentials for a valid tender or offer of performance?
A

Answer:
- Unconditional: The tender should be made without any conditions.
- At Time: The tender must be made at the specified time.
- At Proper Place: The tender must be made at the specified place.
- To Proper Person: The tender must be made to the promisee or their agent.
- According to Terms and Conditions: The tender should be in accordance with the terms of the contract.
- Reasonable Opportunity to Inspect: The promisor should provide a reasonable opportunity for the promisee to inspect the goods or services being offered.
- For Whole Obligation: The tender must be for the entire obligation.
- Of Exact Amount and in Legal Tender: In the case of tendering money, it must be of the exact amount and in legal tender.

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5
Q
  1. What happens if the promisee refuses or neglects to accept the performance?
A

Answer: The contract becomes voidable at the option of the promisor. If the promisor rescinds the contract, they are discharged from their liability. They may also claim damages as compensation. However, the promisor is still liable to pay money, but they are not liable to pay interest for the delay in payment.

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6
Q
  1. Performance in a contract refers to:
    a) Making a promise
    b) Fulfilling the promise made under the contract
    c) Terminating the contract
    d) Modifying the contract
A

Answer: b) Fulfilling the promise made under the contract

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7
Q
  1. Actual performance occurs when:
    a) The promisor offers to perform the contract
    b) The promisee accepts the offer of performance
    c) The promisor fulfills the promise and the promisee accepts it
    d) The promisor refuses to fulfill the promise
A

Answer: c) The promisor fulfills the promise and the promisee accepts it

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8
Q
  1. Attempted performance is also known as:
    a) Conditional performance
    b) Offered performance
    c) Incomplete performance
    d) Breach of contract
A

Answer: b) Offered performance

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9
Q
  1. Which of the following is NOT essential for a valid tender or offer of performance?
    a) Unconditional
    b) At the proper place
    c) At the specified time
    d) To any person
A

Answer: d) To any person

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10
Q
  1. When the promisor rescinds the contract, they are:
    a) Still liable for their obligations under the contract
    b) Discharged from their liability under the contract
    c) Required to pay interest for the delay in payment
    d) Exempt from claiming damages
A

Answer: b) Discharged from their liability under the contract

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11
Q
  1. If the promisee refuses or neglects to accept the performance, the contract becomes:
    a) Void
    b) Valid
    c) Voidable at the option of the promisor
    d) Enforceable against the promisee
A

Answer: c) Voidable at the option of the promisor

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12
Q
  1. In the case of tendering money, it must be of:
    a) Any amount, regardless of the contract terms
    b) An approximate amount
    c) The exact amount specified in the contract
    d) A lesser amount than the contract specifies
A

Answer: c) The exact amount specified in the contract

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13
Q
  1. Performance in a contract refers to:
    a) Negotiating the terms of the contract
    b) Termination of the contract
    c) Fulfilling the obligations under the contract
    d) Modifying the contract terms
A

Answer: c) Fulfilling the obligations under the contract

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14
Q
  1. Which type of performance occurs when the promisor offers to perform but the promisee does not accept it?
    a) Actual performance
    b) Attempted performance
    c) Conditional performance
    d) Defective performance
A

Answer: b) Attempted performance

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15
Q
  1. Which of the following is an essential condition for a valid tender of performance?
    a) Must be made at the specified time
    b) Must be unconditional
    c) Must be made to any person
    d) Must deviate from the contract terms
A

Answer: a) Must be made at the specified time

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16
Q
  1. What should a promisor provide during a valid tender of performance?
    a) Reasonable opportunity for inspection
    b) Alternative goods or services
    c) Partial fulfillment of the obligation
    d) Cash payment in advance
A

Answer: a) Reasonable opportunity for inspection

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17
Q
  1. If the promisee refuses to accept the performance, the contract becomes:
    a) Void
    b) Invalid
    c) Voidable at the option of the promisee
    d) Voidable at the option of the promisor
A

Answer: d) Voidable at the option of the promisor

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18
Q
  1. When the promisor rescinds the contract, they are:
    a) Relieved from their obligations
    b) Still bound by the contract terms
    c) Required to renegotiate the contract
    d) Discharged from their liability
A

Answer: d) Discharged from their liability

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19
Q
  1. In a valid tender of money, it must be in:
    a) Any form of currency
    b) A negotiable instrument
    c) The exact amount and in legal tender
    d) A greater amount than the contract specifies
A

Answer: c) The exact amount and in legal tender

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20
Q
  1. Which party can claim damages if the promisee refuses to accept the performance?
    a) The promisee
    b) Both parties equally
    c) The promisor
    d) No damages can be claimed
A

Answer: c) The promisor

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21
Q
  1. What does appropriation of payment refer to?
A

Answer: Appropriation of payment means making an allocation of current payment between previous debts.

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22
Q
  1. When can a debtor’s payment be applied to discharge specific debts?
A

Answer: If the debtor intimates (express or implied) which debts to settle, the payment is applied to discharge those debts.

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23
Q
  1. What happens if the debtor does not specify which debt to settle?
A

Answer: If the debtor does not intimate about which debt to settle, the creditor can adjust any previous debt.

24
Q
  1. How are previous debts adjusted when no party makes appropriation?
A

Answer: When no party makes appropriation, previous debts are adjusted in the order of time. If debts are due on the same day, they are adjusted proportionately based on the outstanding amount of each debt.

25
Q
  1. In the case of principal and markup being due, which is settled first?
A

Answer: In the case of principal and markup both being due, the markup is settled first.

26
Q
  1. Can time-barred debt be adjusted during appropriation of payment?
A

Answer: Yes, time-barred debt can be adjusted during appropriation of payment.

27
Q
  1. Can disputed debt be adjusted during appropriation of payment?
A

Answer: No, disputed debt cannot be adjusted during appropriation of payment.

28
Q
  1. What does discharge of a contract mean?

I

A

Answer: Discharge of a contract means that the rights and liabilities of the parties under the contract come to an end.

29
Q
  1. What is novation?
    .
A

Answer: Novation occurs when parties agree to substitute a new contract in place of the old contract, and the parties to the contract may also change

30
Q
  1. What happens after novation?
A

Answer: After novation, the parties cannot demand the performance of the old contract.

31
Q
  1. What is alteration in the context of a contract?
A

Answer: Alteration means a material change in the terms of the contract with the mutual consent of the parties, while the parties to the contract remain the same.

32
Q
  1. What is rescission?
A

Answer: Rescission occurs when both parties agree to cancel the contract by mutual consent before the date of performance, without substituting a new contract.

33
Q
  1. What is remission?
A

Answer: Remission refers to the acceptance of a lesser consideration in place of the original promise, such as accepting a lesser amount of debt or extending the time for performance of the contract.

34
Q
  1. What is waiver?
A

Answer: Waiver occurs when a person surrenders their legal right under the contract, releasing the other party from their obligation.

35
Q
  1. What happens if the promisee neglects or refuses to provide reasonable facilities for the performance of the promisor?
A

Answer: In such cases, the promisor is discharged from their liability due to the neglect or refusal of the promisee.

36
Q
  1. When can a debtor specify which debts to settle with a payment?
    a) Only if the payment exceeds the total amount owed
    b) If the debtor intimates the specific debts to settle, whether express or implied
    c) Only if the debts are of equal amounts
    d) If the debtor provides a written request for debt allocation
A

Answer: b) If the debtor intimates the specific debts to settle, whether express or implied

37
Q
  1. What happens if a debtor does not indicate which debt to settle?
    a) The creditor can choose any debt to settle
    b) The debtor must make a separate payment for each debt
    c) The payment is automatically allocated to the oldest debt
    d) The payment is returned to the debtor
A

Answer: a) The creditor can choose any debt to settle

38
Q
  1. In the absence of debtor and creditor allocations, how are previous debts adjusted?
    a) In chronological order (time base )
    b) Proportionately based on the outstanding amount of each debt
    c) Randomly chosen by the court
    d) Based on the highest interest rate
A

Answer: a) In chronological order (time base )

39
Q
  1. Which debt is settled first when a debtor owes both principal and markup?
    a) Principal
    b) Markup
    c) The debtor decides which to settle first
    d) Both are settled simultaneously
A

Answer: b) Markup

40
Q
  1. Can time-barred debts be adjusted during appropriation of payment?
    a) Yes, they can be adjusted regardless of their time-barred status
    b) No, time-barred debts cannot be adjusted
    c) Time-barred debts are given priority during allocation
    d) Time-barred debts can only be adjusted through legal action
A

Answer: a) Yes, they can be adjusted regardless of their time-barred status

41
Q
  1. What is novation in the context of contract discharge?
    a) A mutual agreement to cancel the contract
    b) A substitution of a new contract for the old one with new parties
    c) The alteration of contract terms
    d) A waiver of contractual obligations
A

Answer: b) A substitution of a new contract for the old one with new parties

42
Q
  1. What is alteration in the context of contract discharge?
    a) Cancelling the contract without substitution
    b) Adjusting the contract terms through mutual consent
    c) Reducing the consideration for the contract
    d) Resolving disputes related to the contract
A

Answer: b) Adjusting the contract terms through mutual consent

43
Q
  1. When does initial impossibility render a contract void?
    a) When the impossibility existed at the time of making the contract
    b) When the impossibility occurs after the formation of the contract
    c) When the impossibility is due to the promisor’s negligence
    d) When the impossibility affects only a minor part of the contract
A

Answer: a) When the impossibility existed at the time of making the contract

44
Q
  1. What is supervening impossibility in relation to contract discharge?
    a) The impossibility to perform the contract after its formation due to reasons beyond the promisor’s control
    b) The impossibility to negotiate the terms of the contract
    c) The impossibility to fulfill contractual obligations on the due date
    d) The impossibility to allocate payment to specific debts
A

Answer: a) The impossibility to perform the contract after its formation due to reasons beyond the promisor’s control

45
Q
  1. Which situation does cause supervening impossibility?
    a) Strikes, lockouts, and civil disturbances
    b) Default of a third party relied upon by the promisor
    c) Difficulty of performance
    d) Change of law making the contract illegal
A

Answer d) Change of law making the contract illegal

46
Q

causing Supervening Impossibility:

A
  1. Destruction of Subject Matter after the contract.
  2. Death or Personal Incapacity (If contract depends on personal skill or ability).
  3. Parties become alien enemies on declaration of war.
  4. Contracts become Illegal due to change of law.
  5. Non-existence or non-occurrence of a particular state of things necessary for performance.
47
Q

NOT causing Supervening Impossibility:

A
  1. Strikes, Lockouts, and Civil Disturbances (unless agreed).
  2. Default of a Third party on whose work promisor relied.
  3. Difficulty of Performance.
  4. Commercial Impossibility (contract becoming expensive or unprofitable).
  5. Partial impossibility of some of the objects of the contract.
48
Q

Discharge by Breach of Contract:

A
  • Breach of contract occurs when a party willfully refuses or fails to perform their promise.
  • It can be actual, which occurs on the due date of the contract, or anticipatory, which occurs before the due date of the contract.
  • Damages are available
49
Q
  1. What is discharge by impossibility of performance?
A
  • Discharge by impossibility of performance occurs when it becomes objectively impossible for a party to fulfill their obligations under the contract.
50
Q
  1. What is initial impossibility?
A
  • Initial impossibility refers to a situation where the subject matter of the contract is inherently impossible at the time of making the contract.
51
Q
  1. Give an example of initial impossibility.
A

An example of initial impossibility is a contract to sell a mythical creature like a unicorn, which does not exist in reality.

52
Q
  1. What is supervening impossibility?
A
  • Supervening impossibility occurs when a contract becomes impossible to perform after its formation due to unforeseen events or circumstances that are beyond the control of the party responsible for performance.
53
Q
  1. Provide examples of events that can lead to supervening impossibility.
A
  • Examples of events leading to supervening impossibility include the destruction of the subject matter, death or personal incapacity of a party, parties becoming alien enemies, changes in the law making performance illegal, and non-existence or non-occurrence of necessary conditions for performance.
54
Q
  1. Does difficulty or inconvenience qualify as supervening impossibility?
A
  • No, mere difficulty or inconvenience does not qualify as supervening impossibility. The event or circumstance must truly make performance objectively impossible, not just more burdensome or commercially unprofitable.
55
Q
  1. What happens when a contract is discharged by supervening impossibility?
A
  • When a contract is discharged by supervening impossibility, the non-performing party is relieved of their obligation to perform. However, any benefits received before the occurrence of the impossibility may need to be returned.
56
Q
  1. Are parties excused from paying damages in cases of supervening impossibility?
A
  • Parties may be excused from paying damages for non-performance due to supervening impossibility. However, this depends on the specific circumstances and applicable laws.

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