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Mann_BLRB 9_TB_Ch17

Business Law and the Regulation of Business

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Chapter 17—Performance, Breach, and Discharge TRUE/FALSE 1. A condition, as used in the law of contracts, is an event whose happening or nonhappening affects a duty of performance under a contract. ANS: T MSC: AACSB Analytic 2. In the case of Hochster v. De La Tour the plaintiff was allowed to treat the repudiation by De La Tour as breach of contract and immediately bring suit. ANS: T MSC: AACSB Analytic 3. A fundamental difference exists between the breach or nonperformance of a contractual promise and the failure or nonhappening of a condition. ANS: T MSC: AACSB Analytic 4. A condition subsequent is a much more frequent occurrence than a condition precedent. ANS: F MSC: AACSB Analytic 5. All contractual promises are absolute promises to perform. ANS: F MSC: AACSB Analytic 6. A breach of contract always discharges the injured party from performance under the contract. ANS: F MSC: AACSB Analytic 7. Robert and John entered into a bilateral contract and Robert has fully performed. Their mutual rescis- sion of the contract is binding at common law. ANS: F MSC: AACSB Analytic 8. Implied-in-fact conditions must fully and literally occur, and they are understood by the parties to be part of the agreement. ANS: T MSC: AACSB Analytic 9. The "perfect tender rule" provides that only substantial deviations from the promised performance in a sales contract under the Code constitute a material breach and discharge the aggrieved party from the duty of performance. ANS: F MSC: AACSB Analytic 10. An unauthorized alteration of ANY of the material terms in a written contract discharges the entire contract. ANS: T MSC: AACSB Analytic
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11. If an obligee promises to accept a stated performance in satisfaction of the obligor's existing contractu- al duty, this creates an accord. ANS: T MSC: AACSB Analytic 12. Substituted contracts immediately discharge the original contracts. ANS: T MSC: AACSB Analytic 13. An implied-in-law condition need only be substantially performed. ANS: T MSC: AACSB Analytic 14. An accord and satisfaction discharges the original debt. ANS: T MSC: AACSB Analytic 15. In all substituted contracts there must be an agreement among three parties where a new promise is substituted for an existing promise or a new promisor is substituted for an existing promisor. ANS: F MSC: AACSB Analytic 16. If there is a novation, the original promisor remains liable to the original promisee if the new promisor fails to perform. ANS: F MSC: AACSB Analytic 17. By agreement, parties to a contract may discharge each other from performance under a contract. ANS: T MSC: AACSB Analytic 18. A material breach by the seller will discharge the buyer from his obligations under a contract. ANS: T MSC: AACSB Analytic 19. A person who has made a financially unsound contract may be relieved from performance under the doctrine of commercial impracticability.
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