T or F 1. An accord and satisfaction discharges the original contract upon the formation of the accord.

T or F 2. All rights in a contract can be assigned by either party.

T or F 3. Substantial performance entitles the performing party to full payment of the contract price.

T or F 4. Substantial performance is performance that is complete enough that there is no breach.

T or F 5. In general, an oral contract that the Statute of Frauds requires to be in writing is voidable.

T or F 6. To be sufficient under the Statute of Frauds, a written contract must be signed by the party who is bringing a suit to enforce the contract.

T or F 7. Fraud in the inception exists when the misrepresentation occurs at the beginning of negotiations.

T or F 8. A contract entered into because of duress is illegal and thus, void.

T or F 9. The primary goal of compensatory damages is to place the parties in the position that they were in prior to the formation of the contract.

T or F 10. Specific performance is the primary remedy used to make a party live up to its obligations under a personal services contract.

ESSAY QUESTIONS

1. Can a star NBA guard, under an 8-year multimillion dollar contract be required to play if he does not want to? Please briefly explain.

2. Alex rented a small one-bedroom beach house in Martha's Vineyard that had an attached one-car garage. Alex customarily parked his 2009 Porsche 911 GT2 RS in the garage. After purchasing a new Jet Ski, Alex realized he had nowhere to store it. Alex approached his neighbor Leon and said, "If you'll let me store my jest ski in your garage I'll pay you $100 a month, as long as you agree to take out insurance to guard against any casualty loss." Leon agreed and promised to use reasonable care in the storage of Alex's Jet Ski.

When Alex arrived with the Jet Ski at Leon's house, he said to Leon, "Since the time we made our agreement, I realized the Jet Ski is covered under my own homeowner's insurance policy, so it won't be necessary for you to take out additional insurance." Two months later Leon's house was destroyed by a fire. The Jet Ski was also ruined in the fire. Afterwards, Alex learned that the Jet Ski was excluded under his homeowner's policy and was not covered by insurance. At the time of the fire, the Jet Ski was valued at $3,800. Alex sues Leon to recover damages for the loss of his Jet Ski. The judgment should be for Alex or Leon? Please briefly explain.

3. Mary Homeowner hired Ken Builder to construct a beach house in Cape Matters along the outer banks of the Georgia coastline. According to the written building contract, Mary Homeowner agreed to pay Ken Builder $500,000 for the construction work and, in return, Ken Builder promised to build the beach house (in accord with the architectural specifications) and to pave a driveway along the side of the house.

While the home was being constructed, Mary Homeowner decided that she wanted to plant a garden on the space originally set aside for the driveway. As a result, Mary Homeowner and Ken Builder orally agreed that Ken Builder would not be required to pave the driveway. However, after Ken Builder completed the construction of the beach house, Mary Homeowner changed her mind and told Ken Builder she wanted the driveway paved after all. Citing their oral agreement, Ken Builder refused. If Mary Homeowner sues Ken Builder for breach of contract based on Ken Builder's failure to pave the driveway, who should win? Please briefly explain.

FILL-IN QUESTIONS

1. A condition that requires the occurrence of an event before a party is obligated to perform a promise under a contract is a condition ____________________.

2. The parties to a contract may agree to settle a contract dispute by a(n) ___________________ and ____________________ whereby the parties agree to accept something different in full performance of the original contract.

3. The damages to which parties to a contract agree in advance if a contract breach occurs are referred to as ____________________.

5. Under _____________________ all parties to a contract agree for a third party to substitute one of the original parties.