BL Study Guide, Chapter 6
True/False
Indicate whether the statement is true or false.
____
1. The court will not rule on when a contract must be completed if time for performance is unspecified.
____
2. The doctrine of substantial performance is often applied to construction contracts.
____
3. Ending a contract by mutual release is not allowed by law.
____
4. The destruction of the subject matter needed to perform the contract, through no fault of either party,
discharges that contract.
____
5. You have a right to sue a person who breaches a contract made with you.
____
6. A person may win a lawsuit for fraud even if no loss is suffered.
____
7. When actual physical force is used to cause another person to enter a contract, the contract is void.
____
8. When a bilateral mistake is made, neither party may void the contract.
____
9. A legal means for enforcing a right or correcting a wrong is called a remedy.
____ 10. When you win a lawsuit and collect thousands of dollars beyond what you actually lost, you have received
bilateral damages.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 11. When a contract ends, it is said to be
a. discharged.
b. released.
c. tendered.
d. avoided.
____ 12. An offer to do what you have agreed to do under a contract is called
a. substantial performance.
c. tender of performance.
b. accord and satisfaction.
d. satisfactory performance.
____ 13. Specific performance asks the court to order the other party in a contract to
a. pay the contract in full.
c. stop doing what the contract says.
b. obey all injunctions immediately.
d. do what he or she has agreed to do.
____ 14. Wrongful acts of one of the parties may discharge a contract by
a. the Wrongful Act Statute.
c. operation of law.
b. the statute of limitations.
d. mutual release.
____ 15. The legal transfer of a right under contract is called a(n)
a. alteration.
c. novation.
b. assignment.
d. delegation.
____ 16. Threats of a business nature that cause a person to enter into a contract without real consent would qualify as
a. undue influence.
c. economic duress.
b. duress.
d. fraud.
____ 17. A deliberate deception to secure unfair or unlawful gain is called
a. misrepresentation.
c. a unilateral mistake.
b. libel.
d. fraud.
____ 18. Which of the following is NOT a remedy for a breach of contract?
a. You may request the contract be continued.
b. You may accept the breach.
c. You may sue for damages.
d. You may ask the court for a remedy.
____ 19. Mutual mistake is also known as
a. unilateral mistake.
b. material mistake.
c. bilateral mistake.
d. intentional mistake.
____ 20. If what seems to be a valid contract turns out not to be, the contract is
a. fraudulent.
c. defective.
b. deceptive.
d. mistaken.
Completion
Complete each statement.
21. As long as all terms have been carried out properly and completely, the contract is discharged by
____________________.
22. When both parties have fulfilled the terms of the contract, ____________________ has taken place.
23. Under the doctrine of ____________________, when someone fulfills the major requirements of a contract
(leaving only minor details unfinished), the contract is completed.
24. A(n) ____________________ is an agreement between two parties to end an agreement.
25. If the time for performance is not mentioned in a contract, the court will say the contract must be completed in
a time that is suitable and fair, or in ____________________.
26. A(n) ____________________ mistake is an error on the part of one of the parties to a contract.
27. To prove ____________________, the innocent party has to show that he or she depended on the lie.
28. A person who intentionally fails to reveal an important fact is committing the fraud of
____________________.
29. When actual physical force is used to cause another to enter a contract, the contract is
____________________.
Matching
Match each term with its definition.
a. discharge by agreement
b. performance
c. assignment
d. delegation
e. substantial performance
f.
g.
h.
i.
j.
tender
undue influence
breach of contract
statute of limitations
fraud
____ 30. When the party completes the major requirements of a contract with only a few minor details remaining
____ 31. The transfer of a duty under a contract
____ 32. A deliberate deception intended to serve an unfair gain
____ 33. A time limit for suing in a civil case
____ 34. Both parties agree to end the contract
____ 35. The transfer of a right under a contract
____ 36. Actions that make inappropriate use of one person’s power over another
____ 37. An offer to do what you have agreed to do under a contract
____ 38. When the parties fulfill the terms of a contract by doing what they promised earlier
____ 39. When a person fails to perform the duties of the contract
Short Answer
40. Describe the ways a contract can be discharged, and discuss these in detail.
BL Study Guide, Chapter 6
Answer Section
TRUE/FALSE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
ANS:
ANS:
ANS:
ANS:
ANS:
NAT:
ANS:
NAT:
ANS:
NAT:
ANS:
NAT:
ANS:
ANS:
F
T
F
T
T
NBEA IIA3o
F
NBEA IIA3d
T
NBEA IIA3d
F
NBEA IIA3d
T
F
PTS:
PTS:
PTS:
PTS:
PTS:
1
1
1
1
1
DIF:
DIF:
DIF:
DIF:
DIF:
1
2
2
1
1
REF:
REF:
REF:
REF:
REF:
131
132
133
135
136
PTS: 1
DIF: 1
REF: 141
PTS: 1
DIF: 1
REF: 144
PTS: 1
DIF: 1
REF: 144
PTS: 1
PTS: 1
DIF: 1
DIF: 2
REF: 145
REF: 146
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
REF:
REF:
REF:
REF:
REF:
REF:
MULTIPLE CHOICE
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
NAT:
ANS:
NAT:
ANS:
NAT:
ANS:
NAT:
ANS:
A
C
D
C
B
C
NBEA IIA3d
D
NBEA IIA3d
A
NBEA IIA3o
C
NBEA IIA3d
C
1
1
1
1
1
1
1
1
1
1
1
1
131
132
147
135
137
144
PTS: 1
DIF: 1
REF: 141
PTS: 1
DIF: 2
REF: 145
PTS: 1
DIF: 1
REF: 144
PTS: 1
DIF: 2
REF: 141
COMPLETION
21. ANS: complete performance
PTS: 1
DIF: 2
22. ANS: performance
REF: 131
PTS: 1
DIF: 1
23. ANS: substantial performance
REF: 131
PTS: 1
DIF: 1
24. ANS: mutual release
REF: 132
PTS: 1
DIF: 1
25. ANS: reasonable time
REF: 133
PTS: 1
26. ANS: unilateral
DIF: 1
REF: 131
PTS: 1
27. ANS: fraud
DIF: 1
REF: 143
NAT: NBEA IIA3d
PTS: 1
DIF: 2
28. ANS: concealment
REF: 143
NAT: NBEA IIA3d
PTS: 1
29. ANS: void
DIF: 2
REF: 142
NAT: NBEA IIA3d
DIF: 2
REF: 144
NAT: NBEA IIA3d
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
DIF:
PTS: 1
MATCHING
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
E
D
J
I
A
C
G
F
B
H
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
NAT: NBEA IIA3d
NAT: NBEA IIA3d
NAT: NBEA IIA3o
SHORT ANSWER
40. ANS:
Answers may vary but should include the following:
Contracts can be discharged in two ways: by performance and by agreement.
Contracts are discharged by performance, meaning that the purpose of the contract has been fulfilled. As long
as all the terms of the contract have been followed properly, the contract has been discharged. The time for
completing the performance may be very important to one or both parties. If it is not stated in the contract, the
court will say that all duties in the contract must be completed in a reasonable time.
The law requires that contractual services be done in a satisfactory manner. When one party believes the job is
unsatisfactory, the dispute may end up in court. Both parties must fully perform their duties for a contract to
end by complete performance. A party can fulfill the terms of a contract by performing an act or by paying
money; in other words, by doing what they have agreed to do under the contract.
Discharge by agreement means that people can end the contract by mutual agreement. This can be done by
mutual release or by accord and satisfaction. Some contracts are discharged involuntarily despite what the
parties intend or what they actually do. They are discharged either by impossibility of performance or by
operation of law. Impossibility of performance occurs when it is legally impossible to fulfill the contract, for
example due to death or illness. Discharge by operation of law includes contracts that are altered or changed
by one party or through a statute of limitations. Bankruptcy also falls under this category.
PTS: 1
DIF: 3
REF: 131-136
NAT: NBEA IIA3m