1. (c) Communication by words is not required as the communication can also be done by actions. Equally, the communication need not be directly made by the offeror to the offeree, as it could be communicated through a third party. Since an offer must be seriously intended, communicated, and definite in its terms, answers (a), (b) and (d) are incorrect.
2. (b) Advertisements and price quotes are not usually offers, they are invitations to deal. Answers (a), (c) and (d) are incorrect because no offer was made.
3. (b) Acceptances must be unconditional, complying with all of the offeror’s terms. This was a counteroffer because it was not sent by registered or certified mail and it was not received by February 18. Answers (a) and (d) are incorrect because no contract was formed. Answer (c) is incorrect because overnight delivery service was not registered or certified as required.
4. (b) Since Fox changed the terms of the offer, the letter was a counteroffer and not a valid acceptance.
Answers (c) and (d) are incorrect because no contract was formed. Answer (a) is incorrect because Fox doesn’t have to sign and return an offer to accept.
5. (a) The offer was accepted by telegram before the offer was terminated. Answer (b) is incorrect because rejections are only effective when received, not when they are mailed. Answer (c) is incorrect because an offer can be revoked anytime before acceptance, even if it says it will be held open. Answer (d) is incorrect because firm offers only apply to sale of goods, not real estate.
6. (d) Both rejections and revocations are only effective when they are received. Answers (a), (b) and (c) indicate that one or both of them can be effective when sent.
7. (b) Offers can usually be revoked anytime before acceptance, even if it says it will be held open. Answer (a) is incorrect because an option requires consideration and none was given. Answers (c) and (d) are incorrect because firm offers only apply to sale of goods, not real estate.
8. (d) The offer stated it would only remain open until July 1 and that acceptances were only effective when received. This acceptance was received on July 2 after the offer had ended. Answers (a) and (b) are incorrect because no contract was formed. Answer (c) is incorrect because the offer did not end after three months, it ended on July 1.
9. (a) The acceptance was effective when it was received because the offeror required acceptances to be received. Answer (b) is incorrect because an offeror can usually revoke anytime before acceptance. Answer (c) is incorrect because revocations are only effective when received. Answer (d) is incorrect because the offeror required acceptances to be received.
10. (d) Martin paid consideration ($100) to keep the offer open until February 15 and thus had an option contract. His letter of February 6 accepted the original offer. Answer (a) is incorrect because he paid consideration and created an option. Answer (b) is incorrect because a counteroffer has no effect on an option contract. Answer (c) is incorrect because option contracts cannot be revoked by the offeror.
11. (c) Sale of the lawn mower ended the offer when Mason learned of it, thus the acceptance was ineffective.
Answers (a) and (b) are incorrect because the acceptance was ineffective. Answer (d) is incorrect because the offeror can usually revoke anytime before acceptance.
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12. (c) An acceptance is valid when sent under the "mailbox rule" if the offeree uses the same means of communication that the offeror did or a faster means. Answer (a) is incorrect because the offeror can usually revoke anytime before acceptance. Answer (b) is incorrect because revocations are only effective when received, which was after the acceptance had been mailed. Answer (d) is incorrect because revocations do not require a writing.
13. (b) The offer ended on April 4 and no acceptance had been received by that date as required by the offer.
Answer (a) is incorrect because the use of overnight mail was not prohibited by the offer. Answer (c) is incorrect because the offer required acceptances to be received. Answer (d) is incorrect because the acceptance was received too late.
14. (c) If the offer requires acceptances to be received, then the mailbox rule cannot apply. Whether the parties are merchants, whether real estate is involved, and the duration of the offer have no effect on the mailbox rule, thus (a), (b) and (d) are incorrect.
15. (a) By the terms of the offer, acceptance could only be done by doing the required act. A promise in exchange for an act creates a unilateral contract. Answer (b) is incorrect because unjust enrichment is used when no contract exists, but the court will imply one to prevent a party from being unjustly enriched. Answer (c) is incorrect because public policy is not involved. Answer (d) is incorrect because quasi contract is used like unjust enrichment to imply a contract where none exists to prevent unfairness.
16. (a) Option contracts cannot be revoked because the offeree has paid consideration to keep the offer open.
Agreeing not to sue is consideration because it is giving up of a legal right. Answer (b) is incorrect because option contracts require consideration to be irrevocable. Answer (c) is incorrect because silence is rarely an acceptance. Answer (d) is incorrect because revocations do not require a writing and option contracts cannot be revoked.
17. (b) Consideration must be legally sufficient. Answers (a) and (d) are incorrect because courts aren’t usually concerned with the adequacy of consideration. They will leave the parties to make their own deal. Answer (c) is incorrect because the consideration need not be exchanged simultaneously as, for example, in a credit sale.
18. (b) Consideration must be mutually bargained for. Answers (a) and (c) are incorrect because courts aren’t usually concerned with the adequacy of consideration. Answer (d) is incorrect because consideration need not conform to the subjective intent of the parties, it need only be the giving up of a legal right.
19. (a) Past consideration is no good. Answer (b) is incorrect because consideration is the giving up of a legal right. Answer (c) is incorrect because the adequacy of consideration is not usually important. Answer (d) is incorrect because consideration may performed by third parties. (The law permits most contract duties to be delegated.)
20. (b) A promise to donate to charity needs no consideration. Answer (a) is incorrect because what was done in the past cannot be consideration. Answer (c) is incorrect because additional consideration from both parties would be needed to modify a real estate contract. Although firm offers in sales are irrevocable without consideration, the offer must be in writing. Thus, answer (d) is incorrect because the offer is oral.
21. (a) Additional consideration is needed from both parties to modify a real estate contract. Answer (b) is incorrect because consideration is not needed to ratify a minor’s contract. Answer (c) is incorrect because firm offers in sales are irrevocable without consideration. Answer (d) is incorrect because a sales contract can be modified without additional consideration.
22. (d) Since the debt is disputed, the promises of the creditor and the debtor to compromise are both giving up of a legal right. Answer (c) is incorrect because if the debt were liquidated (undisputed amount), the promise of the debtor to pay a lesser amount would not be something he would be legally free to do. He would be contractually obligated to pay the agreed amount. Answers (a) and (b) are incorrect because both the police officer and the builder were also already obligated to perform their promise.
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23. (d) The Statute of Frauds does not apply to this contract. Although the sale of goods of $500 or more require some kind of writing, this is a contract for personal services not goods (repairing books). Answers (a), (b) and (c) are incorrect because they state Carson will receive less than the agreed amount based on the Statute of Frauds and it does not apply to this contract.
24. (d) A promise to answer the debt of another requires some kind of writing. Answer (a) is incorrect because although a signed writing is not needed in sales from a merchant who fails to object in 10 days to a confirming letter from another merchant, this is not a contract for sale of goods and this rule can not be used. Answers (b) and (c) are incorrect because this contract could have been completed in one year and thus, was not impossible to complete in one year.
25. (c) Since personal services are involved and not goods, the agreement to modify the original contract requires additional consideration from both parties to be enforceable and Dunne failed to give consideration.
The parol evidence rule makes evidence that contradicts a written contract inadmissible, but permits the admissibility of events that took place subsequent to the writing even if it contradicts. Since the modification took place after the writing, it is admissible. The only answer that states it is unenforceable due to lack of consideration, but admissible into evidence is (c) and all other answers are incorrect.
26. (d) Since goods are involved, this contract can be modified without added consideration. Thus (a) is incorrect because it is enforceable. Since the modified price is less than $500, the Statute of Frauds would not apply and (b) is incorrect. Since the modification was made after the writing, the parol evidence would permit its admissibility and (c) is incorrect. The only answer that states it is enforceable and admissible is (d).
27. (d) Under the Statute of Frauds the contract terms may be stated in more than one document. Answer (a) is incorrect because only contracts for the sale of goods of $500 or more require a writing. Answer (b) is incorrect because the writing need only be signed by one party but it can only be enforced against the one who signed.
Answer (c) is incorrect because it is contracts impossible to perform in one year that require a writing.
28. (a) The Statute of Frauds only requires the writing to be signed by one party, but it can only be enforced against the one who signed. Answer (b) is incorrect because all contracts involving real estate require a writing.
Answer (c) is incorrect because the contract terms can be in more than one document. Answer (d) is incorrect because the Statute of Frauds has nothing to do with the adequacy of consideration.
29. (d) No writing is required for a real estate contract if the contract has been fully performed by both parties. Answer (a) is incorrect because most real estate contracts require a writing regardless of the time required for performance. Answer (b) is incorrect because sale of goods of less than $500 can be oral, but most real estate contracts regardless of price require a writing. Answer (c) is incorrect because the part payment must be substantial and the purchaser must usually be in possession for an oral real estate contract to be enforceable.
30. (b) An oral contract to buy land is enforceable when the purchaser is in possession and has made a substantial downpayment. Answer (a) is incorrect because although a sales exception exists if there is no objection between merchants to a confirming letter, no such exception exists for real estate. Answers (c) and (d) are incorrect because Nolan will not win due to the exception regarding possession and substantial downpayments.
31. (a) Although contracts impossible to perform in one year usually require a writing, an exception exists if one side has fully performed and all that remains is for the other side to pay money. Answers (c) and (d) are incorrect because of this exception. Answer (b) is incorrect because the lack of involvement of real estate is irrelevant to contracts impossible to perform in one year.
32. (a) Minors can usually disaffirm not only while a minor, but also a reasonable time thereafter. Answer (b) is incorrect because the disaffirmance need not be in writing. Answer (c) is incorrect because to disaffirm the minors need only return what they possess or control. They do not need to pay the remainder of the purchase price.
Answer (d) is incorrect because although minors are liable in damages for their torts (like negligence), they can still disaffirm their contracts.
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33. (a) Covenants not to compete in the sale of a business are valid if reasonably needed, reasonable as to time and reasonable as to distance. The only incorrect answer is (a).
34. (b) A minor can disaffirm anytime while a minor or a reasonable time thereafter. Answers (a) and (c) are incorrect because minors cannot ratify while a minor, they can only ratify after becoming an adult. Answer (d) is incorrect because UCC Sales does not control the right of the minor to disaffirm; it exists in contract law.
35. (c) A minor can only ratify a contract while an adult. Thus (c) is the only ineffective method of ratification because it occurred before reaching the age of majority. All the remaining answers occurred after reaching the age of majority.
36. (b) To disaffirm a drunk must be incapable of understanding what they did. Since Payne understood the nature and the terms of the contract, the contract was legally binding and not void or voidable.
37. (d) Failure to have a required license makes all of your contracts void, thus West is entitled to nothing.
Answers (a) and (b) are incorrect because they state Zimmer would be liable for some amount. Answer (c) is incorrect because although the Statute of Frauds applies, it only requires a writing signed by the party to be charged.
Since Zimmer signed, the contract could be enforced against him.
38. (c) Illegal contracts are void and courts won’t aid either party. Answers (a), (b) and (d) are all incorrect because they indicate Small could recover under some legal theory.
39. (c) Fraud has five elements (MS RID): a material misrepresentation of fact, scienter which is an intent to deceive, reasonable reliance, an intent to rely and damages. The only answer that indicates an element of fraud is (c).
40. (b) Fraud has five elements (MS RID): a material misrepresentation of fact, scienter which is an intent to deceive, reasonable reliance, an intent to rely and damages. The only answer that indicates an element of fraud is (b).
41. (a) The intent to deceive or scienter element is met in constructive fraud by a reckless disregard for the truth. Answer (b) is incorrect because although fraud requires a material misrepresentation of fact, this relates to the first element of fraud (the M in MS RID), not the scienter element. Answers (c) and (d) relate to the reliance element in fraud, not scienter.
42. (c) Although a failure to disclose will not ordinarily suffice for fraud, a duty exists to correct a previous representation later found to be false. Once Kalp discovered the inventory was overstated, Kalp’s failure to correct the previous representation would constitute fraud. Answers (a) and (b) are incorrect because they indicate Steele will not prevail. Answer (d) is incorrect because an injured party can sue for damages when fraud exists.
43. (b) Fraud in the execution exists when the defrauded party doesn’t even know they made a contract as was the case with Sardy. Answer (a) is incorrect because with fraud in the inducement the injured party knows they are making a contract and Sardy did not know. Answers (c) and (d) are incorrect because all elements of fraud are present and thus it is not mistake or duress.
44. (c) Duress is not present because Maco did not force or coerce Kent to enter into the contract. Answers (a) and (b) are incorrect because mere refusal to pay fair market value or knowledge of financial problems does not constitute duress unless force or coercion is also present. Answer (d) is incorrect because the absence or presence of alternative employment is irrelevant to whether force or coercion is used.
45. (d) Duress requires a threat of force, criminal action, or economic devastation. Most duress makes a contract voidable. Answers (a), (b) and (c) are incorrect because they don’t involve the use of force or coercion.
Equally, (a) and (c) would be incorrect because they state duress makes a contract void. Only forcing someone into a contract by actual physical force, not the threat of force, makes a contract void.
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46. (b) Undue influence is the use of a position of trust, confidence or affection to overcome another’s free will in contract. Here, based on Carter’s illness and Smith’s position as an attorney, undue influence exists. Answer (a) is incorrect because no force was present. Answers (c) and (d) are incorrect because there is no indication any material misrepresentations were made.
47. (d) An innocent misrepresentation has four of the elements of fraud, but no scienter or reckless disregard.
It requires a material misrepresentation of fact, reasonable reliance, an intent to rely and damages. It does not have scienter. Answers (a), (b) and (c) are elements of both fraud and innocent misrepresentations. Answer (d) relates to the scienter element and thus is only present with fraud.
48. (c) An innocent misrepresentation requires a material misrepresentation of fact. Answer (a) is incorrect because it does not require scienter and a reckless disregard for the truth fulfills scienter. Answer (b) is incorrect because the misrepresentation need not be in writing. Answer (d) is incorrect because although reliance is required, it does not have to be the only factor inducing the plaintiff to enter into the contract.
49. (c) In order for a mutual mistake or a unilateral mistake to affect the validity of a contract, the mistake must be material. Thus, with an immaterial mistake the contract would be valid and not void or voidable.
50. (b) A party making a unilateral mistake can disaffirm if the other party knew or should have known an error was being made. Since Preston was a merchant in such goods, Preston should have known that $10,900 for goods worth $109,000 was an error. Answer (a) is incorrect because there was not a mutual mistake. Only Paco made the error. Answer (c) is incorrect because Preston will not prevail. Answer (d) is incorrect because such an error does not make the contract void, it makes it voidable allowing the mistaken party to disaffirm.
51. (a) A party making a unilateral mistake can disaffirm if the other party knew or should have known an error was being made. Since the general contractor knew of the errors, the subcontractor may disaffirm and will not be liable. Answer (b) is incorrect because disaffirmance is permitted when the other party knew of the mistake even if the mistake was the result of gross negligence. Answers (c) and (d) are incorrect because they state the subcontractor is liable.
52 (d) A mutual mistake of a material fact makes a contract voidable. Both parties were mistaken as to the existence of the car and the mistake was material, thus the contract was voidable. Answer (a) is incorrect because failure to pay fair market value does not by itself make a contract unconscionable. Courts are not usually concerned with the adequacy of consideration. Answer (b) is incorrect because the car was destroyed when risk of loss was with Apple. Answer (c) is incorrect because courts aren’t usually concerned with the adequacy of consideration.
53. (a) The parol evidence rule makes evidence of what occurred prior to or contemporaneous with the writing inadmissible if it contradicts the writing. Answers (b) and (c) are incorrect because failure of a condition precedent (an event that must occur before performance is required) and lack of contractual capacity have no application to the parol evidence rule. Answer (d) is incorrect because the parol evidence rule does not exclude evidence of what occurred subsequent to the execution of the written contract.
54. (b) The parol evidence rule excludes evidence of what occurred prior to or contemporaneous with the execution of the written document. Evidence of what occurred subsequent to the writing is admissible. Thus subsequent oral agreements are admissible and prior written agreements are not.
55. (c) The parol evidence rule excludes evidence of what occurred prior to or contemporaneous with the execution of the written document. It does not exclude evidence of fraud. Thus, the oral agreement regarding the utilities is inadmissible (it occurred prior to the writing), but the fraud is admissible.
56. (c) Allied and Bell made a contract whereby Bell would buy Allied’s goods and pay the money to Ferco because Allied owed Ferco money. When two parties make a contract intending to benefit a third party creditor, the third party creditor beneficiary can sue either of the two parties and prevail. Answers (a) and (b) are incorrect because they state Ferco will not prevail. Answer (d) is incorrect because a creditor beneficiary need not be aware of the contract at the time it was entered into. He can find out about the contract afterwards and still prevail.
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57. (a) When two parties make a contract intending to benefit a third party, a third party beneficiary is created and receives rights under the contract. Jones’ insurance contract intended to benefit Smith and Smith can collect under the contract. Since there was no consideration owed, Smith is a donee beneficiary not a creditor beneficiary. Answer (b) is incorrect because Jones was not an assignee, Jones was a beneficiary. Answers (c) and (d) are incorrect because they state Jones will lose and a beneficiary of a life insurance policy can certainly recover.
58. (a) Wagner’s insurance contract naming Union as beneficiary was intended to benefit Union. This makes Union a third party beneficiary and Union received rights under the contract. Since the life insurance was to protect a loan, Union is a creditor beneficiary not a donee beneficiary. Answer (b) is incorrect because it states Union is a donee beneficiary. Answers (c) and (d) are incorrect because they state Union will not recover.
59. (d) United can not recover because the contract between Rice and Locke was not intended to benefit United.
Although United pipe fittings were to be used, the intent of Rice was to have the refinery built and the intent of Locke was to obtain employment. Thus, United is an incidental beneficiary and receives no rights under the contract. Answer (a) is incorrect because it states United can recover under the contract. Answer (b) is incorrect because detrimental reliance requires that a promise be made to United upon which they justifiably relied. No promise was made to United. Answer (c) is incorrect because United was not a donee beneficiary since there was no intent to benefit United.
60. (b) When a buyer assumes a mortgage, both the buyer and the old mortgagor are liable. Thus, Eagle can sue either Spear or Omega. Answer (a) is incorrect because Eagle can sue Spear before suing Omega or after or even sue them both at the same time. Since they are both liable, Eagle can select which of them it will sue. Answers (c) and (d) are incorrect because Eagle can select which of them to sue and is not required to sue both or to sue Spear first.
61. (d) When a buyer purchases land subject to an existing mortgage, the buyer is not personally liable for the mortgage. Only the original mortgagor is liable. Thus, only Dix the original mortgagor is liable and Wilk is not liable. Answers (a) and (c) are incorrect because Wilk is not liable. Answer (b) is incorrect because Dix is liable.
62. (d) An assignment of contract rights requires neither a writing nor consideration, thus (I) is incorrect. An insurance contract cannot usually be assigned, thus (II) is incorrect. Only answer (d) states that both are incorrect.
63. (d) Most contracts can be assigned, unless by assigning the basic obligations of the parties would be changed. Yost’s contract rights to buy the land can be assigned because the basic obligations would not be changed.
The obligation to buy the land is not changed and the obligation to pay for the land is not changed. Answer (a) is incorrect because consent is not needed to assign. Answers (b) and (c) are incorrect because the contract can be assigned.
64. (c) Most contracts can be assigned, unless by assigning the basic obligations of the parties would be changed. Materially increasing risk would change the obligations of the parties. Answer (a) is incorrect because an assignment can be made without consideration (a gift). Answer (b) is incorrect because assignments do not require a writing unless the Statute of Frauds is involved. Answer (d) is incorrect because a contract right that has been assigned can be revoked if it was assigned without consideration (a gift).
65. (a) Since the assignor gains all of the assignee’s rights and liabilities, if there is a breach both the assignor and the assignee are liable. Thus, Ace is still liable even though they assigned the contract to Pure. Answer (b) is incorrect because notifying Wilcox of the assignment does not relieve Ace of liability. Only the release of Ace by Wilcox would relieve Ace of liability and that would be a novation. Answers (c) and (d) are incorrect because Ace could assign the contract. The basic obligation to paint the warehouse was not changed in that it did not involve special skill.
66. (b) Most contracts can be assigned, unless by assigning the basic obligations of the parties would be changed. Materially increasing risk would change the obligations of the parties. Assigning an option contract right would not change the basic obligations of the parties. Assigning a malpractice insurance policy would change the basic obligations because the insurance company’s risk depends on who the insured is. Most insurance contracts cannot be assigned.
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67. (d) By failing to notify the debtor of the assignment, Reed, the assignee, can only collect the amount paid from the assignor, Null. Reed cannot collect the money from Pix. Answers (a) and (b) are incorrect because Pix has no liability. Answer (c) is incorrect because Reed does not need to record to hold the debtor liable, Reed just needs to notify Pix of the assignment.
68. (d) When an assignment occurs, the assignor impliedly warrants the assignee there is no knowledge of facts impairing the value of the assignment. Answer (a) is incorrect because there is no warranty of payment of a debt when a creditor assigns out the right to receive money. Answer (b) is incorrect because failure to notify the debtor does not make the assignment invalid. If, however, the debtor pays the old creditor, the assignee can only collect from the assignor. Answer (c) is incorrect because most defenses that are good against an assignor are good against the assignee.
69. (d) In a novation one party to a contract is replaced by a new party and the creditor releases the old party. The creditor, First Federal, agreed to release Wren and look only to Moss for performance. Answer (a) is incorrect because Moss assumed the mortgage, instead of buying subject to. Answers (b) and (c) are incorrect because in an assignment and in a third party beneficiary contract, Wren would still be liable and Wren was released from liability.
70. (a) In a novation one party to a contract is replaced by a new party and the creditor releases the old party. The creditor, Ball, released Stark and agreed to look only to Dell for payment. Answer (b) is incorrect because in an accord and satisfaction the party who is to perform is not replaced by a new party as is done with a novation. Answer (c) is incorrect because there is no basis for the agreements to be voidable. Answer (d) is incorrect because each party has promised something they are legally free not to do and thus, consideration is present. Dell promised to pay Ball, Stark promised to accept payment to Ball as payment for Dell’s debt to him and Ball promised to release Stark.
71. (c) Impossibility of performance will discharge contractual duties. It was impossible for Jackson to repair a boat that no longer existed and thus both Jackson and Smith are discharged from their contract obligations. Answer (a) is incorrect because there was no mutual mistake at the time the contract was made. Answers (b) and (d) are incorrect because both Smith and Jackson are discharged and no longer liable.
72. (d) The statute of limitations for contract actions in most states is 6 years from the date of the breach. It does not begin to run from the date the contract is made, thus (c) is incorrect. Answer (a) is incorrect because the enforceability of oral contracts concerns the Statute of Frauds, not the statute of limitations. Answer (b) also concerns the Statute of Frauds (contracts impossible to perform in 1 year), not the statute of limitations.
73. (a) The statute of limitations requires that a law suit be brought within a specified time after a breach occurs. Answers (b), (c) and (d) concern the statute of frauds, fraud and the parol evidence rule. They do not apply to the statute of limitations.
74. (b) The statute of limitations requires that a law suit be brought within a specified time after a breach occurs. Answers (a), (c) and (d) are incorrect because it is not computed from when the contract is negotiated, begun or signed.
75. (d) The statute of limitations limits the time period in which a law suit can be brought. It bars a party’s access to judicial remedies. Answers (a) and (b) are incorrect because it doesn’t make the contract void or discharge the underlying obligation, it merely bars access to a remedy. Answer (c) is incorrect because a debt barred by the statute of limitations can be revived by a new written promise to pay.
76. (a) Prevention of performance will discharge a party from a contract. With accord and satisfaction, the satisfaction is the performance of the accord and discharges the old contract. Thus, both prevention of performance and accord and satisfaction discharge a party to a contract.
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77. (d) Illegal contracts are void. Thus, if a contract was legal when made and subsequently became illegal, the parties would be discharged from their duties. Answer (a) is incorrect because only death of the party to perform services results in a discharge, not death of the one to receive services. Answer (b) is incorrect because only the absolute impossibility of performance will discharge a party. Increased difficulty or increased cost of performance does not discharge a party.
Answer (c) is incorrect because bankruptcy of the party to receive services does not result in a discharge, although bankruptcy of the one to perform services may very well result in a discharge.
78. (c) An anticipatory repudiation occurs when one party, prior to the time of performance, states that they won’t perform the contract. Nagel told Fields on September 3 that Nagel would not perform the contract on September 10. Answer (a) is incorrect because promissory estoppel involves detrimental reliance on the promise of another when there is no contract. Answer (b) is incorrect because an accord and satisfaction involves an agreement to substitute performance. Answer (d) is incorrect because substantial performance involves an unintentional breach of the contract in a minor area.
79. (d) With an anticipatory repudiation the injured party can sue immediately or wait until the time of performance and then sue for breach. Answer (a) is incorrect because most contract rights can be assigned. Answer (b) is incorrect because specific performance cannot be used in personal service contracts. Answer (c) is incorrect because no writing was required for this contract under the Statute of Frauds.
80. (a) The doctrine of substantial performance provides that for an unintentional breach in a minor area, recovery is allowed. Damages will be subtracted for the minor breach. Ames unintentionally breached in a minor area. White can only subtract monetary damages for the minor breach. Answer (b) is incorrect because White can subtract damages for the minor breach. Answer (c) is incorrect because Ames did have a minor breach. Answer (d) is incorrect because Ames can recover without installing the Ace fixtures.
81. (d) Specific performance is available for unique property. All real estate is considered to be unique. Thus, Hodge may use specific performance against Kaye. Hodge may choose to receive compensatory damages instead, a monetary award to compensate Hodge for the harm Kaye has done by breaching. Answers (a) and (c) are incorrect because punitive damages are rarely awarded. Answer (b) is incorrect because the award of the land and money for all harm done would ordinarily be "double" compensation. A party usually recovers specific performance or compensatory damages, but not both.
82. (a) Specific performance is available for unique property. All real estate is considered to be unique. Thus, Wyatt may use specific performance against Price. Answer (b) is incorrect because the award of the land and money for all harm done would ordinarily be "double" compensation. A party usually recovers specific performance or compensatory damages, but not both. Answers (c) and (d) are incorrect because punitive damages are rarely awarded.
83. (b) Specific performance is only available for unique property and never for personal service contracts. Thus, Foster could not use specific performance for this personal service contract. Answers (a) and (c) are incorrect because Jones repudiated prior to the time of performance. With an anticipatory breach Foster can sue immediately or wait until the time of performance and then sue. Answer (d) is incorrect because Foster can sue for monetary damages for breach of a personal service contract.
84. (a) With a liquidated damage clause the parties agree in advance what damages will be if there is a breach. To be enforceable the amount must bear a reasonable relationship to the harm done and not be a penalty. Thus, Master will win unless the amount is a penalty. Answer (b) is incorrect because liquidated damages that are unreasonable are not enforced. Answer (c) is incorrect because Accur’s breach was material due to the importance of the computer system. Answer (d) is incorrect because liquidated damages are enforceable if reasonable to the harm done.
85. (c) When rescission occurs the contract is canceled and the parties are restored to their former position.
Answer (a) is incorrect because with a novation the contract is not canceled. In a novation one side is replaced and the new party will perform the contract. Answer (b) is incorrect because with a release one side is excused from performance but both sides are not restored to their original position. Answer (d) is incorrect because a revocation is when an offeror revokes an offer, not the canceling of a contract.
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