1 . What is the legal effect of the discharge of a contract?

A. Discharge provides relief only to the party that has carried out its obligations under the contract.

B. Discharge frees the parties of their contractual obligations.

C. Discharge of an old contract is a necessary step before the parties can enter into any new contract.

D. Discharge relieves the parties of their performance obligations, but not their payment obligations.

2 . Which of the following is NOT a way in which a contract can be discharged?

A. Discharge by agreement.

B. Discharge by operation of law.

C. Discharge by performance.

D. Discharge by neglect.

3 . Which of these situations is a case of discharge by performance?

A. Eli pays cash for the laptop he ordered when it is delivered to his business.

B. Eli has ordered a drink at a local tavern and the server has put it on Eli's tab.

C. Eli paid for an antique desk he ordered online. The desk has not been delivered yet.

D. Eli has entered a bid in an online auction that ends the next weekend.

4 . What must occur in order for a contract to be considered discharged as a result of performance?

A. One party must deviate significantly from the terms of the contract.

B. One or more parties to the contract must fail to perform as expected.

C. The parties must have performed at least some of their contractual duties and paid at least some of their contractual debts.

D. All contractual obligations must be fulfilled by the parties.

5 . A judge may consider a contract discharged in most of these situations. Which situation will likely NOT be considered an effective discharge?

A. You requested that payment be made for a service you had provided before close of business on Wednesday. The customer is waiting to pay you when you arrive at work on Thursday morning.

B. The local hockey association ordered 500 ice cream bars from Epic Dairy for an association banquet that was to be held last Saturday afternoon. Rather than delivering the bars at 10 a.m., as requested, they were delivered at 6 p.m.

C. The contractor you hired to build your new office complex has completed all of the work on time, except for landscaping to be done around the front entrance.

D. Lester's Jeans Limited delivers an order for 200 pairs of jeans to Rexy's Retail Outlet a day later than stipulated in the contract.

6 . Which of the following is LEAST likely to result in the discharge of a contract through late performance?

A. The parties agree time is of the essence and late performance is refused.

B. A court finds that performance occurred within a reasonable time.

C. A party unilaterally gives notice that performance must occur by a specific date, which is difficult for the other party to meet.

D. The parties have not stipulated that time is of the essence, and late performance is refused

7 . Professor Jones, who teaches at a local university, agrees to rent a basement apartment to Rita Martin at a modest monthly rate, with the stipulation that the arrangement will end when Rita graduates. The stipulation is an example of

A. A condition precedent.

B. A restrictive covenant.

C. A condition subsequent.

D. A true condition precedent.

8 . Victor's Sporting Goods Limited has offered university soccer star Pat Holloway a $20 000-per-year endorsement contract that will come into effect only if Pat plays professional soccer in one of four leagues listed in the contract by Victor's. The qualifier on this agreement would be considered

A. A condition subsequent.

B. A true condition precedent.

C. Void for lack of specificity.

D. A condition precedent.

9 . With respect to discharging a contract, rescission differs from accord and satisfaction in that rescission requires

A. The mutual agreement of the parties to discharge an executory contract.

B. Fresh consideration.

C. Defective or incomplete performance of a minor term of the contract.

D. Completion of substantial performance to bring a contract to an end.

10 . Discharging a contract by way of release differs from rescission or satisfaction and accord because a release

A. Enforces a demand for contractual performance.

B. Can only be used to discharge an executed contract.

C. Requires fresh consideration and agreement of all parties.

D. Is made under seal and requires no fresh consideration.

11 . It is considered a variation to a contract, rather than a novation, when

A. One of the parties does not fully perform its obligations under the contract.

B. Substituting a new party for one of the existing parties to the contract.

C. The parties agree to changes to an existing contract that go to the root of the contract.

D. The parties agree to alter minor terms in an existing contract.

12 . Freemont Construction Corp. entered into a contract with Atlantic Grocers Inc. to build a new grocery store in Dartmouth under some tight time constraints. Unfortunately, most of the Freemont Construction staff are tied up on an even bigger project in Labrador. Freemont's CEO has suggested to Atlantic that Birchcliffe Builders Ltd., a new company started by one of Freemont's most dependable former lead hands, would be prepared to take over the grocery store contract. The process that would be used to make this work for all the parties is called

A. Variation.

B. Rescission.

C. Novation.

D. Accord and satisfaction.

13 . In contract law, a waiver occurs when a party to an agreement

A. States that an agreement will come into existence only after a certain event occurs.

B. Alleges performance under the contract is defective or incomplete in some minor way.

C. Insists performance must occur within a reasonable time, considering all the circumstances.

D. Signifies orally or in writing that it is abandoning a right to insist on contractual performance.

14 . Louis Landlord has rented retail space to Tara Tenant under a commercial lease. Tara asks to be relieved of the final two months of the five-year lease. Louis agrees, saying that it doesn't matter to him because he has a new tenant ready to move in. This is an example of

A. Novation.

B. Condition subsequent.

C. Accord and satisfaction.

D. Waiver.

15 . Which of the following statements about limitation periods for contract claims is FALSE?

A. Limitation periods are set by provincial law.

B. If a limitation period has expired, the plaintiff generally loses the right to sue.

C. There is no limitation period for contract claims.

D. The limitation period for contract claims is commonly two years, but there are variations.

16 . Your company has a contract with a pet store to supply toys for dogs and cats. The contract has a term of three years. In the second year, and with a sizeable debt to you for products already delivered, the pet store declares bankruptcy. This is a major blow for your company, but you do find other customers. This is an example of termination of contract by

A. Operation of law, specifically by frustration of contract.

B. Operation of law, specifically by statute.

C. Waiver.

D. Novation.

17 . Which of the following statements about contract terms is TRUE?

A. Parties to a contract are not allowed to stipulate that a particular contract term is a condition; only judges can do that.

B. A breach of a contract term considered a condition allows the victim to claim damages only. The victim's contract obligations will not be discharged.

C. A breach of a contract term considered to be an intermediate term creates the most uncertainty about which remedy will be available to the victim.

D. A breach of a contract term considered a warranty results in the victim being discharged from his or her obligations under the terms of the contract.

18 . If a lawyer advises her client he cannot discharge his obligations under a contract, but can claim damages for any losses suffered as a result of the other party's breach, the term breached must be

A. A warranty.

B. A condition.

C. A condition precedent.

D. A condition subsequent.

19 . Your business has agreed to ship 3000 widgets to a manufacturer in Chicago by August 1st. The Chicago manufacturer uses your widgets as a component in their own products. On July 15th, you phone the company in Chicago to let them know that your business is not going to be able to meet this order because of a strike by your production staff that is unlikely to be resolved in time. Your phone call is an example of

A. Deviation.

B. Defective performance.

C. Frustration of the contract.

D. Anticipatory breach.

20 . Your business has agreed to ship 3000 widgets to a manufacturer in Chicago by August 1st. The Chicago manufacturer uses your widgets as a component in their own products. On July 15th, you phone the company in Chicago to let them know that your business is not going to be able to meet this order because of a strike by your production staff that is unlikely to be resolved in time. As a result of your phone call, the manufacturer in Chicago

A. Could seek another supplier immediately and sue you for any difference in price if they have to pay more for the widgets.

B. Must obey the contract and wait until the strike is resolved to get the widgets.

C. Can do nothing in the way of a legal remedy because they are in the United States and you are in Canada.

D. Must wait until August 2nd before seeking any remedy for your breach.