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Exam 13: Contract Performance Breachapter and Remedies

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Question 1

True/False

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Under a construction contract that is conditioned on the builder meeting certain specifications, complete performance is required to avoid material breach.

A) True
B) False

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Question 2

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When a seller breaches a contract for a sale of goods, knowing the buyer plans to resell the goods, the buyer can recover the lost profits from the planned resale.

A) True
B) False

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Question 3

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Renew Inc. contracts to resurface the pools at Swim Park by June 1. Renew knows that if performance is not timely, Swim Park will have to delay its seasonal opening. Renew finishes the job June 15. In a suit for breach, Swim Park can recover

A seller who places goods at the disposal of a buyer has tendered delivery but cannot yet demand payment.

On an architect's breach of contract after payment for the work, the owner can immediately hire a new architect and obtain restitution of the payment.

The party on whom duress is exerted can choose to avoid the entire transaction.

Sometimes, when a buyer breaches a contract for a sale of goods and the seller has not yet produced the goods, the seller can recover the lost profits.

If a contractor's bid was significantly low because he or she made a mistake in adding up the total estimated costs, any contract resulting from the bid is still normally enforceable.

Open Range agrees to sell Pinewood Ranch a remote parcel of land for $15,000. Both parties believe the land to be worthless, but beneath it is shale rock containing oil. A court would

Because of the potential for punitive damages, plaintiffs often include a claim for fraudulent misrepresentation in their contract disputes.

Dwelling Inc. enters into a contract with Estate Management to manage and maintain Dwelling's apartment complex. Their contract contains a clause that limits Estate's liability except in cases of gross negligence or willful misconduct. With respect to this clause, a court would most likely

Performance becomes commercially impracticable when a foreseeable, added burden of performing increases the cost slightly.

Fess convinces Gwyn to enter into a contract for the purchase of a Falafel Waffle Food Cart by knowingly misrepresenting a number of material features about the facility and the business. Most likely, Gwyn can rescind the contract on the basis of

Drain Equipment Inc. contracts to sell its assets to Excavation Corporation. Before either party has performed, rescission of this contract requires

Health Source Inc. offers to buy Medico Supplies Corporation. On June 1, Medico gives Health Source copies of Medico's financial statements for the previous year. The statements show an inventory of $10 million. On June 15, Medico discovers that the previous year's inventory is overstated by $500,000, but does not inform Health Source. On July 1, Health Source, relying on the financial statements, buys Medico. On July 10, Health Source discovers the inventory overstatement. Can Health Source succeed in a suit against Medico? Explain.

If one party's performance on a contract is substantial, the other party's duty to perform need only comport with the level of the rendered performance.

Only a mistake of value or quality makes a contract voidable.

Rene contracts with Scot to pay him $5,000 for repairs to Rene's lake cabin. After Scot performs, Rene tells him that she cannot pay him in full immediately. They sign an agreement in which Rene promises to pay $2,500 now instead of $5,000 later. This is

Trucking LLC enters into a contract to deliver a certain quantity of potatoes to United Foods's refrigerated warehouse in exchange for a specified payment. Trucking delivers the spuds to the location. United's duty to pay is

The distinction between "seller's talk" and facts allows sellers to tout their products and services, thereby creating potential liability for fraud.