VERIFIED 2026/2027 Business Law – Exam 3
Business Law – Exam 3
Question 1
An award for a purely technical breach of contract (usually $1.00) is:
Select one:
a. Nominal
Question 2
In which of the following situations can a party's duty to perform be discharged?
Select one:
c. When events occur after the formation of the contract that would make the return
performance of the other party worthless to the promisor
Question 3
A person who enters into an illegal contract may recover any consideration when:
Select one:
b. The party rescinds the contract before any illegal act has been performed
performed
Question
An award for loss in value of a promised performance is:
Select one:
d. Compensatory
Question 5
A donee beneficiary:
Select one:
a. Is a third-party beneficiary to whom a gift of performance is given
Question
Notice to the promisor is important to address the issue/s of:
Select one:
c. Liability and priority
Question
Which of the following is a true statement about exculpatory clauses?
, VERIFIED 2026/2027 Business Law – Exam 3
Select one:
b. When an exculpatory clause is enforced, it can effectively relieve a party of liability for his
own negligence
Question 8
When one or both parties to an illegal bargain are ignorant of the facts that made the
bargain illegal, courts will:
Select one:
b. Allow recovery for performance rendered before the parties learned of the illegality
Question 9
Transfer of duties is referred to as a(n):
Select one:
c. Delegation
Question 10
When interpreting contracts, courts:
Select one:
b. Give ordinary words their usual meaning
Question 11
Harry Hotdog is hired as an accountant by a large Indianapolis-based accounting firm. The
firm's attorney drafts an employment contract which contains the following clause:
"Employee agrees that he will not engage in the practice of accounting in Indianapolis for
one year after termination of his employment with this firm." Hotdog signs the contract,
works for six months and then resigns and opens his own accounting firm in Indianapolis.
His former employer sues him for breach of contract and is likely to:
Select one:
d. Win, if the restriction is found to be reasonable in duration and area
Question
Sunny makes an oral agreement with WudWerks to create 100 custom-made chairs for her
restaurant for $14,000. After WudWerks had shifted around their production schedule to
produce the chairs, Sunny calls WudWerks and says that she no longer wants the chairs
and that their deal is off. Under this scenario:
Select one:
Business Law – Exam 3
Question 1
An award for a purely technical breach of contract (usually $1.00) is:
Select one:
a. Nominal
Question 2
In which of the following situations can a party's duty to perform be discharged?
Select one:
c. When events occur after the formation of the contract that would make the return
performance of the other party worthless to the promisor
Question 3
A person who enters into an illegal contract may recover any consideration when:
Select one:
b. The party rescinds the contract before any illegal act has been performed
performed
Question
An award for loss in value of a promised performance is:
Select one:
d. Compensatory
Question 5
A donee beneficiary:
Select one:
a. Is a third-party beneficiary to whom a gift of performance is given
Question
Notice to the promisor is important to address the issue/s of:
Select one:
c. Liability and priority
Question
Which of the following is a true statement about exculpatory clauses?
, VERIFIED 2026/2027 Business Law – Exam 3
Select one:
b. When an exculpatory clause is enforced, it can effectively relieve a party of liability for his
own negligence
Question 8
When one or both parties to an illegal bargain are ignorant of the facts that made the
bargain illegal, courts will:
Select one:
b. Allow recovery for performance rendered before the parties learned of the illegality
Question 9
Transfer of duties is referred to as a(n):
Select one:
c. Delegation
Question 10
When interpreting contracts, courts:
Select one:
b. Give ordinary words their usual meaning
Question 11
Harry Hotdog is hired as an accountant by a large Indianapolis-based accounting firm. The
firm's attorney drafts an employment contract which contains the following clause:
"Employee agrees that he will not engage in the practice of accounting in Indianapolis for
one year after termination of his employment with this firm." Hotdog signs the contract,
works for six months and then resigns and opens his own accounting firm in Indianapolis.
His former employer sues him for breach of contract and is likely to:
Select one:
d. Win, if the restriction is found to be reasonable in duration and area
Question
Sunny makes an oral agreement with WudWerks to create 100 custom-made chairs for her
restaurant for $14,000. After WudWerks had shifted around their production schedule to
produce the chairs, Sunny calls WudWerks and says that she no longer wants the chairs
and that their deal is off. Under this scenario:
Select one:
