BUL 3320 FINAL EXAM UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
Question:
1. What would be a provision by which the parties agree in advance to the damages to be paid in the event
of a breach of the contract?
Punitive damage provision Reliance damage provision Consequential damage provision liquidated damage
provision
Answer:
Liquidated damage provision
Question:
2. When is an agent normally not liable for a contracting agent entering into when the agent had and acted
within their authority
undisclosed disclosed partially disclosed principal?
Answer:
Disclosed Principle
Question:
3. If a company only hires women as sales representatives because they believe that customers relate better
to women, would this be a violation of the
Federal age discrimination in employment act Violation of the Equal Pay Act Not violating any Federal
Age Discrimination in Employment Act Title 7 of the 1964 Civil Rights Act
Answer:
Title 7 of the 1964 Civil Rights Act
Question:
4. What are the levels of performance of a contract?
complete performance substantial performance inferior performance of a contract. All of the above
Answer:
all of the above
Question:
5. T/F: Does tender of performance discharge a party's contractual obligation?
Answer:
True
Question:
6. T/F: Complete or strict performance by a party discharges that party's duties under the contract.
Answer:
True
Question:
7. T/F: Fully performed contract is called an executed contract; Not fully performed is executory contract.
,Answer:
True
Question:
8. T/F: If you have a minor breach of the contract, there has been substantial performance.
Answer:
True
Question:
9. What rights do a non-breaching party have?
Answer:
Able to sue to recover damages to recover the cost of repairing a defect. Could NOT sue for specific
performance.
Question:
10. When would inferior performance of a contract occur?
Answer:
When there's a major breach of a contract.
Question:
11. If there is a breach in a contract, would the non-breaching party be discharged from any further
performance under the contract? Can they rescind the contract and seek restitution of any compensation
paid under the contract to the breaching party?
Answer:
Yes, they are discharged; Second part is a benefit of an inferior breach of a contract where they can
rescind.
Question:
12. T/F: Anticipatory breach can be implied in the conduct of a party. When someone is supposed to
perform some duty and they don't show up, while stop answering your phone calls.
Answer:
True
Question:
13. T/F: A non-breaching party has to wait until performance is due until they can sue.
Answer:
False, if someone is supposed to perform in 30 days and they tell you that they have no intention of
performing you do not have to wait 30 days.
Question:
14. What is the non-breaching party's obligation in the event of anticipatory repudiation?
Answer:
The non-breaching party can discharge at that point preventing any further duties under contract.
Question:
15. What are your damages when there's a breach of a sales contract involving goods normally governed
by?
,Answer:
Uniform Commercial Code, not common law.
Question:
16. A contractor can recover the profits they would have made on a contract if the owner breaches the
contract before construction begins. (Think anticipatory repudiation.) If Sam is supposed to start building a
house for Lisa in a week and Lisa isn't going to be following the contract by not allowing them on the
property, pay them money etc. Can Sam sue?
Answer:
Sam can then sue at this point to recover damages of the profits they would have made if the contract was
fulfilled.
Question:
17. If an employer hires someone to work and their employee doesn't show up, what damages can the
employer recover for breaches of an employee contract?
Answer:
Cost to hire a new employee and the increase in salary for the replacement.
Question:
18. T/F: Financial loss must be a result from a breach of a contract before the non-breaching party can
recover damages.
Answer:
False, don't have to have a financial loss.
Question:
19. T/F: If a contract has a disclaimer for consequential damages this is lawful in most instances.
Answer:
True
Question:
20. T/F: Most courts do not favor nominal damages lawsuits such as $1.
Answer:
True
Question:
21. T/F: If an employer breaches their contract, the employee still owes a duty to find substitute
comparable employment. The employee can't wait a year and then decide to sue for the whole year of
damages.
Answer:
True
Question:
22. T/F: To have liquidated damage provisions in a contract, the amounts must be reasonable in the
circumstances and the damages must be difficult or impractical to determine. Law doesn't favorite
liquidated damage provisions.
Answer:
True
, Question:
23. T/F: If the court finds out that liquidated damage provision amounts to a penalty it is not enforceable.
Answer:
True
Question:
24. Under what circumstances would remedy of precision be available?
Material breach of a contract Fraud Duress/undue influence Mistake
Answer:
Mistake
Question:
25. T/F: Specific performance is a remedy available for the breach of any sale of personal property or
personal service contract.
Answer:
False, land contracts are the only situation you can get specific performance of a contract.
Question:
26. Injunction
Answer:
requires a person not to do/ perform a certain act
Question:
27. T/F: If there is a clerical error in a contract, you can get reformation of the contract.
Answer:
True
Question:
28. T/F: The Federal Arbitration Act is not limited to disputes involving only federal law.
Answer:
True
Question:
29. Suppose a party can prove a contract related tort, the party could recover compensation for personal
injury, pain and suffering, emotional distress, but never punitive damages.
Answer:
False, in some instances you can recover punitive damages if you can prove there's a contract related tort.
Question:
30. What is the tort of intentional interference with contractual relations?
Answer:
Arises when a third party induces a contracting party to breach the contract with another party.
Ex. Alice (A) and Betty (B) have a contract. Charlie
(C) tries to talk Alice (A) into not performing their duties under the contract.
Question:
31. T/F: Most states permit a court to apply Covenant called the covenant of good faith and fair dealing.
AND CORRECT ANSWERS
Question:
1. What would be a provision by which the parties agree in advance to the damages to be paid in the event
of a breach of the contract?
Punitive damage provision Reliance damage provision Consequential damage provision liquidated damage
provision
Answer:
Liquidated damage provision
Question:
2. When is an agent normally not liable for a contracting agent entering into when the agent had and acted
within their authority
undisclosed disclosed partially disclosed principal?
Answer:
Disclosed Principle
Question:
3. If a company only hires women as sales representatives because they believe that customers relate better
to women, would this be a violation of the
Federal age discrimination in employment act Violation of the Equal Pay Act Not violating any Federal
Age Discrimination in Employment Act Title 7 of the 1964 Civil Rights Act
Answer:
Title 7 of the 1964 Civil Rights Act
Question:
4. What are the levels of performance of a contract?
complete performance substantial performance inferior performance of a contract. All of the above
Answer:
all of the above
Question:
5. T/F: Does tender of performance discharge a party's contractual obligation?
Answer:
True
Question:
6. T/F: Complete or strict performance by a party discharges that party's duties under the contract.
Answer:
True
Question:
7. T/F: Fully performed contract is called an executed contract; Not fully performed is executory contract.
,Answer:
True
Question:
8. T/F: If you have a minor breach of the contract, there has been substantial performance.
Answer:
True
Question:
9. What rights do a non-breaching party have?
Answer:
Able to sue to recover damages to recover the cost of repairing a defect. Could NOT sue for specific
performance.
Question:
10. When would inferior performance of a contract occur?
Answer:
When there's a major breach of a contract.
Question:
11. If there is a breach in a contract, would the non-breaching party be discharged from any further
performance under the contract? Can they rescind the contract and seek restitution of any compensation
paid under the contract to the breaching party?
Answer:
Yes, they are discharged; Second part is a benefit of an inferior breach of a contract where they can
rescind.
Question:
12. T/F: Anticipatory breach can be implied in the conduct of a party. When someone is supposed to
perform some duty and they don't show up, while stop answering your phone calls.
Answer:
True
Question:
13. T/F: A non-breaching party has to wait until performance is due until they can sue.
Answer:
False, if someone is supposed to perform in 30 days and they tell you that they have no intention of
performing you do not have to wait 30 days.
Question:
14. What is the non-breaching party's obligation in the event of anticipatory repudiation?
Answer:
The non-breaching party can discharge at that point preventing any further duties under contract.
Question:
15. What are your damages when there's a breach of a sales contract involving goods normally governed
by?
,Answer:
Uniform Commercial Code, not common law.
Question:
16. A contractor can recover the profits they would have made on a contract if the owner breaches the
contract before construction begins. (Think anticipatory repudiation.) If Sam is supposed to start building a
house for Lisa in a week and Lisa isn't going to be following the contract by not allowing them on the
property, pay them money etc. Can Sam sue?
Answer:
Sam can then sue at this point to recover damages of the profits they would have made if the contract was
fulfilled.
Question:
17. If an employer hires someone to work and their employee doesn't show up, what damages can the
employer recover for breaches of an employee contract?
Answer:
Cost to hire a new employee and the increase in salary for the replacement.
Question:
18. T/F: Financial loss must be a result from a breach of a contract before the non-breaching party can
recover damages.
Answer:
False, don't have to have a financial loss.
Question:
19. T/F: If a contract has a disclaimer for consequential damages this is lawful in most instances.
Answer:
True
Question:
20. T/F: Most courts do not favor nominal damages lawsuits such as $1.
Answer:
True
Question:
21. T/F: If an employer breaches their contract, the employee still owes a duty to find substitute
comparable employment. The employee can't wait a year and then decide to sue for the whole year of
damages.
Answer:
True
Question:
22. T/F: To have liquidated damage provisions in a contract, the amounts must be reasonable in the
circumstances and the damages must be difficult or impractical to determine. Law doesn't favorite
liquidated damage provisions.
Answer:
True
, Question:
23. T/F: If the court finds out that liquidated damage provision amounts to a penalty it is not enforceable.
Answer:
True
Question:
24. Under what circumstances would remedy of precision be available?
Material breach of a contract Fraud Duress/undue influence Mistake
Answer:
Mistake
Question:
25. T/F: Specific performance is a remedy available for the breach of any sale of personal property or
personal service contract.
Answer:
False, land contracts are the only situation you can get specific performance of a contract.
Question:
26. Injunction
Answer:
requires a person not to do/ perform a certain act
Question:
27. T/F: If there is a clerical error in a contract, you can get reformation of the contract.
Answer:
True
Question:
28. T/F: The Federal Arbitration Act is not limited to disputes involving only federal law.
Answer:
True
Question:
29. Suppose a party can prove a contract related tort, the party could recover compensation for personal
injury, pain and suffering, emotional distress, but never punitive damages.
Answer:
False, in some instances you can recover punitive damages if you can prove there's a contract related tort.
Question:
30. What is the tort of intentional interference with contractual relations?
Answer:
Arises when a third party induces a contracting party to breach the contract with another party.
Ex. Alice (A) and Betty (B) have a contract. Charlie
(C) tries to talk Alice (A) into not performing their duties under the contract.
Question:
31. T/F: Most states permit a court to apply Covenant called the covenant of good faith and fair dealing.
