BUL 3320 FINAL EXAM UPDATED 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 employ-ment act
Violation of the Equal Pay Act Not violating any Federal Age Discrimination in Employ-ment 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 dis-charge a party's contractual obliga-tion?
Answer:
True
Question:
6. T/F: Complete or strict performance by a party discharges that party's du-ties under the contract.
Answer:
True
Question:
7. T/F: Fully performed contract is called an executed contract; Not fully per-formed 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
perfor-mance under the contract? Can they rescind the contract and seek restitu-tion 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 im-plied 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 be-fore construction begins. (Think an-ticipatory repudiation.) If Sam is sup-posed to start
building a house for Lisa in a week and Lisa isn't going to be following the contract by not allow-ing
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 re-cover 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 provi-sions 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 liqui-dated 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 con-tract, you can get reformation of the contract.
Answer:
True
Question:
28. T/F: The Federal Arbitration Act is not limited to disputes involving only fed-eral law.
Answer:
True
Question:
29. Suppose a party can prove a con-tract related tort, the party could re-cover compensation for
personal in-jury, 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 interfer-ence 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 ap-ply Covenant called the covenant of good faith and fair
dealing.
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 employ-ment act
Violation of the Equal Pay Act Not violating any Federal Age Discrimination in Employ-ment 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 dis-charge a party's contractual obliga-tion?
Answer:
True
Question:
6. T/F: Complete or strict performance by a party discharges that party's du-ties under the contract.
Answer:
True
Question:
7. T/F: Fully performed contract is called an executed contract; Not fully per-formed 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
perfor-mance under the contract? Can they rescind the contract and seek restitu-tion 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 im-plied 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 be-fore construction begins. (Think an-ticipatory repudiation.) If Sam is sup-posed to start
building a house for Lisa in a week and Lisa isn't going to be following the contract by not allow-ing
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 re-cover 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 provi-sions 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 liqui-dated 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 con-tract, you can get reformation of the contract.
Answer:
True
Question:
28. T/F: The Federal Arbitration Act is not limited to disputes involving only fed-eral law.
Answer:
True
Question:
29. Suppose a party can prove a con-tract related tort, the party could re-cover compensation for
personal in-jury, 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 interfer-ence 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 ap-ply Covenant called the covenant of good faith and fair
dealing.
