1. Tom and Zeke enter into a contract for Tom to paint Zeke’s house for $1,000 by August 5th. Tom
paints half of the house on August 6th, then demands pay. Which of the following is false?
A. Tom may not be in breach if the contract doesn’t make time of the essence.
B. Zeke may have to pay if payment is a condition precedent to the duty to paint.
C. The contract doesn’t violate the statute of frauds.
D. Tom’s duties are discharged under the doctrine of substantial performance.
2. Under the _______ rule, courts generally accept into evidence only the original of a writing, not a copy.
A. equal dignities
B. standard construction
C. parol evidence
D. best evidence
3. Kevin, a world-renowned violinist, agrees to play at the reception for Jay’s wedding. Something comes
up at the last minute, and Kevin delegates his duty to perform to Susan, a mediocre but professional
violinist. This delegation is
B. permissible if Susan performs well.
C. permissible if Kevin also assigns to Susan the right to be paid for playing.
4. Paul enters into a contract with Harry. Paul agrees to put a new roof on Harry’s house, and Harry agrees
to pay Paul $5,000. Paul is late on a payment to Sam’s Supply House and tells Sam’s Supply House that he
will pay when he receives money from Harry. Sam’s Supply House has heard this from Paul before and
didn’t receive money. To ensure Paul pays his payment from the money Harry pays him, Sam’s Supply
A. require an accord and satisfaction be entered into.
B. tell Harry that Paul is indebted to Sam’s Supply House, which automatically makes them a creditor beneficiary entitled to the payment.
C. have Paul assign his interests under the contract with Harry to Sam’s Supply House.
D. have Harry assign his interests under the contract with Paul to Sam’s Supply House.
5. James leases an apartment to Kyle for $900 per month rent. The written lease contains no prohibition
against assignment, nor does it expressly permit assignment. Kyle assigns his rights to Harley without any
consideration. James finds out and objects. The assignment is
A. invalid because the lease didn’t expressly permit assignment.
B. valid because the written lease didn’t prohibit it.
C. valid because there’s no consideration for the assignment.
D. invalid because James didn’t consent to the assignment.
6. Collin purchases a house, using a loan from Big Bank. As a condition of the loan, Big Bank requires that
Collin purchase life insurance payable to Big Bank, to the extent of the outstanding mortgage, if Collin dies
before fully paying the mortgage. Big Bank is
A. both a creditor beneficiary and a donee beneficiary.
B. an incidental beneficiary but not a donee beneficiary.
C. an intended beneficiary but not a donee beneficiary.
D. a creditor beneficiary but not a donee beneficiary.
7. Horatio agrees to paint Stella’s house for $1,000. Horatio fails to paint, and Stella hires Winston to paint the house for $1,000. Stella sues Horatio for breach of contract. Stella likely will receive __________ damages.
8. Warren agrees to paint Abby’s restaurant for $1,000. Warren fails to paint. Abby may be entitled to punitive damages if
A. Warren doesn’t know how to paint, misrepresented himself as a painter, and never intended to paint.
B. the contract breached was both written and witnessed.
C. Abby has to pay substantially more than $1,000 for someone else to perform the job.
D. Abby loses profits as a result of the breach.
9. Denise orally authorizes Shaun to sell her house. Shaun enters into a written agreement with Eric to sell him the house for $140,000. Both Shaun and Eric sign the contract. Denise learns of the agreement after the fact and decides she doesn’t want to sell. If the contract is ruled unenforceable, the most likely reason is the __________ rule.
A. best evidence
B. equal dignities
C. parol evidence
10. A substitution, by mutual agreement, of a new party for one of the original parties to a contract is called a
A. condition concurrent.
C. mutual rescission.
D. complete performance.
11. Elmer borrows money from Big Bank, who then assigns the promissory note and mortgage to Financial
Institution for valuable consideration. Elmer isn’t given notice of the assignment and continues to pay Big
Bank. Financial Institution files suit, claiming Elmer is in default because Elmer failed to pay monthly payments to Financial Institution. Which of the following statements is true?
A. Big Bank must forgive Elmer’s loan because they failed to notify him.
B. Financial Institution was obligated to give notice to Elmer of the assignment.
C. Financial Institution must pay Big Bank for the payments Elmer made.
D. Elmer is in default to Financial Institution because he didn’t pay them.
12. Tom and Zeke go out to a restaurant for dinner. Tom orders a steak, and Zeke orders lasagna. After they’ve finished eating, they pay their bill. Assuming all parties performed in the order they were required to under this contract, which of the following is true?
A. There was no contract.
B. Service was a condition precedent to payment.
C. Service and payment were conditions concurrent.
D. Payment was a condition precedent to service.
13. Will contracts with Grace to sell her 100 lamps for $1,000. Will breaches his contractual duty to deliver the lamps, and Grace buys 100 lamps for $2,000 from another dealer. Grace sues Will for breach of contract. She will most likely receive what type of damages?
A. Consequential damages of $3,000
B. Compensatory damages in the amount of $1,000
C. Compensatory damages in the amount of $2,000
D. Nominal damages of $100
14. Danielle purchases life insurance on her own life with Big Life Insurance and makes her husband,
Walter, the beneficiary. Which of the following statements is true?
A. Big Life Insurance is a creditor beneficiary.
B. Danielle is a donee beneficiary.
C. Walter is a donee beneficiary.
D. Danielle is an intended third-party beneficiary.
15. Which of the following acts is designed to cut down on identity theft related to the use of credit cards?
A. Uniform Computer Information Transactions Act
B. E-Sign Act
C. Uniform Electronic Transactions Act
D. Fair and Accurate Credit Transactions Act
16. Stan contracts to sell his house to Bonnie for $150,000. Stan then finds a buyer who will pay $200,000 and tells Bonnie he won’t perform. Bonnie wants to make Stan honor his contract. The remedy she should seek is
A. compensatory damages.
B. punitive damages.
End of exam
C. specific performance.
D. consequential damages.
17. Jack and Jane formed a contract in which Jack agreed to sell Jane a large amount of apples. Jack knew that Jane planned to resell the apples at the farmers’ market the following weekend. Jack failed to deliver the apples as promised. Jane will most likely be able to recover
A. punitive damages only.
B. both nominal and punitive damages.
C. both compensatory and consequential damages.
D. compensatory damages only.
18. One name for a promise made by one party to pay another person’s debts, if that person fails to pay the debt, is
A. collateral contract.
B. signature requirement.
C. prenuptial agreement.
D. condition precedent.
19. Which of the following is an example of discharge by operation of law?
A. Xavier agrees to paint Rita’s house for $1,000. Rita later tells Xavier that she won’t pay him. As a result, Xavier decides not to paint.
B. Xavier agrees to paint Rita’s house for $1,000. Rita changes her mind and asks Xavier not to paint. Xavier agrees.
C. Xavier agrees to paint Rita’s house for $1,000. Xavier paints, but before Rita pays him, she files bankruptcy. As a result, Xavier doesn’t get paid.
D. Xavier agrees to paint Rita’s house for $1,000. Before Xavier can paint, Rita’s house burns down.
20. Barb and Ned exchange e-mails in which Barb agrees to paint Ned’s house for $1,000. Which of the following statements is true?
A. The contract is enforceable.
B. The contract can’t be enforced because there’s no handwritten signature.
C. The contract is unenforceable due to the statute of frauds.
D. The contract can’t be enforced because electronic contracts aren’t legally binding.