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Unformatted text preview: Chapter 19DISCHARGE OF CONTRACTS TRUE/FALSE 1. Generally, contracts are discharged by the performance of the terms of the contract. ANS: T MSC: AACSB Analytic 2. A contract can be discharged by the expiration of the time period specified in the contract. ANS: T MSC: AACSB Analytic 3. A tender of payment of a debt, if refused, does not stop the running of interest or the collection of court costs if a suit is begun. ANS: F MSC: AACSB Analytic 4. When a creditor receives a payment of money, the creditor may apply the money to any debt owed by the debtor if the debtor does not specify what application is to be made. ANS: T MSC: AACSB Analytic 5. Generally, payment is timely if it is mailed on or before the final date for payment. ANS: T MSC: AACSB Analytic 6. Payment by check is a conditional payment. ANS: T MSC: AACSB Analytic 7. An agreement that does not specify the time for performance is not binding because it is too indefinite. ANS: F MSC: AACSB Analytic 8. The time for performance is typically essential in a contract for the sale of perishable property. ANS: T MSC: AACSB Analytic 9. If the parties to a contract expressly state that time is of the essence, a court is bound by such state- ment. ANS: F MSC: AACSB Analytic 10. In most cases, performance within a reasonable time is sufficient. ANS: T MSC: AACSB Analytic 11. Exact performance of every provision of a contract is required for the party that should have performed to sue on the contract. ANS: F MSC: AACSB Analytic 12. The doctrine of substantial performance is concerned with the issue of whether an imperfect perform- ance will be considered adequate to discharge one's responsibilities under a contract. ANS: T MSC: AACSB Analytic 13. The rule of substantial performance applies only if departures from the contract or defects in perform- ance were made willingly. ANS: T MSC: AACSB Analytic 14. A person who substantially performs a contract is liable for damages to the other party. ANS: T MSC: AACSB Analytic 15. There is no exact standard or test by which to determine whether a performance is substantial. ANS: T MSC: AACSB Analytic 16. All courts hold that when an agreement requires satisfaction of the other party regarding the accept- ance of an act, a reasonable-person standard is used. ANS: F MSC: AACSB Analytic 17. When a building contract requires the contractor to perform the contract to the satisfaction of the own- er, the owner generally is required to pay only if actually satisfied with the contractor's work. ANS: F MSC: AACSB Analytic 18. The parties may agree that the adequacy of performance under a contract is to be determined by a third party. ANS: T MSC: AACSB Analytic 19. Contracts may be discharged by the joint action of both parties or sometimes by the action of one party alone....
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This note was uploaded on 02/22/2012 for the course BUS BUS212 taught by Professor Manney during the Spring '12 term at FSU.
- Spring '12