Question: Does a buyer have an affirmative obligation to seek mortgage financing and act in good faith if a contract of sale contains a mortgage contingency provision?

Answer: Yes. A buyer has an affirmative obligation to seek mortgage financing and act in good faith if a contract of sale contains a mortgage contingency provision because it requires the buyer to make reasonable efforts to fulfill the condition.


Question: If a buyer agrees to buy a seller's house on an express condition that the buyer obtain a mortgage within 30 days, is the buyer in breach of contract if he fails to get a mortgage as a result of being away on a vacation?

Answer: Yes. If a buyer agrees to buy a seller's house on an express condition that the buyer obtain a mortgage within 30 days, the buyer is in breach of contract if he fails to get a mortgage as a result of being away on a vacation because he failed to make a reasonable effort to obtain a mortgage as required by the good-faith requirement.


Question: Does the court imply a good faith requirement to an express condition that is under one party's control?

Answer: Yes. The court implies a good faith requirement to an express condition that is under one party's control because it ensures that the party makes reasonable efforts to fulfill the condition.


Question: If a land purchase contract contains an express condition precedent that the buyer be able to secure a mortgage at 8% or lower interest rate, can the seller sue the buyer for breach of contract if the buyer refuses to apply for a mortgage?

Answer: Yes. If a land purchase contract contains an express condition precedent that the buyer be able to secure a mortgage at 8% or lower interest rate, the seller can sue the buyer for breach of contract if the buyer refuses to apply for a mortgage because the buyer failed to use reasonable efforts to accomplish the express condition.


Question: If a construction contract does not provide for progress payments, must the contractor complete performance before the other party is obligated to pay?

Answer: Yes. If a construction contract does not provide for progress payments, the contractor must complete performance before the other party is obligated to pay because payment is due only upon completion of the work.


Question: If authorities offer a reward for information leading to the arrest and conviction of a felon, must they pay the reward if information leads to the arrest but they choose not to prosecute?

Answer: Yes. If authorities offer a reward for information leading to the arrest and conviction of a felon, they must pay the reward if information leads to the arrest but they choose not to prosecute because the condition of conviction is excused under the doctrine of prevention.


Question: If a seller cannot cancel a real estate contract because the buyer failed to comply with the requirements of a mortgage contingency clause intended for the sole benefit of the buyer, is the seller's duty to perform still subject to the condition?

Answer: No. If a seller cannot cancel a real estate contract because the buyer failed to comply with the requirements of a mortgage contingency clause intended for the sole benefit of the buyer, the seller's duty to perform is not subject to the condition because it was intended solely for the buyer's benefit.


Question: If the purpose of a condition in a contract is to benefit only one of the parties, is the other party's duty to perform subject to the condition?

Answer: No. If the purpose of a condition in a contract is to benefit only one of the parties, the other party's duty to perform is not subject to the condition because it is intended for the sole benefit of the benefiting party.


Question: If a contract expressly provides that payment is not made until completion of the work, is the payor obligated to make progress payments if requested by the payee?

Answer: No. If a contract expressly provides that payment is not made until completion of the work, the payor is not obligated to make progress payments if requested by the payee because the contract stipulates payment upon completion only.


Question: What is a condition subsequent?

Answer: A condition subsequent is an act or event, not certain to occur, which if it occurs discharges a duty of performance which has already arisen because it terminates the contractual obligations upon its occurrence.


Question: What is a condition precedent?

Answer: A condition precedent is a condition which is to be performed before some right dependent thereon accrues or some act dependent thereon is performed because it establishes the prerequisites for performance.


Question: What must occur before an absolute duty of immediate performance arises in the other party?

Answer: A condition precedent must occur before an absolute duty of immediate performance arises in the other party because it sets the requirements for performance.


Question: What is a condition precedent that must occur before a party's performance under an existing contract becomes due or is a condition to the formation of the contract itself?

Answer: A condition precedent is a condition that must occur before a party's performance under an existing contract becomes due or is a condition to the formation of the contract itself where if the condition does not occur, the contract does not exist because it establishes the basis for contractual obligations.


Question: Does the doctrine of substantial performance apply to the sale of goods?

Answer: No. The doctrine of substantial performance does not apply to the sale of goods because it only applies to building and construction contracts.


Question: Do requirements and output contracts contain an implied covenant of good faith and fair dealing?

Answer: Yes. Requirements and output contracts contain an implied covenant of good faith and fair dealing because neither party can make unreasonably disproportionate demands.


Question: Can a promise not supported by consideration be enforced under the theory of promissory estoppel if it was foreseeable that the promisee would rely upon the promise to his detriment?

Answer: Yes. Under the theory of promissory estoppel, a promise not supported by consideration can be enforced if it was foreseeable that the promisee would rely upon the promise to his detriment because the reliance makes the promise binding.


Question: Can a purchase contingency designed to protect the buyer be waived by the buyer?

Answer: Yes. A purchase contingency designed to protect the buyer can be waived by the buyer because the condition is only for the buyer's benefit.


Question: Under the UCC, what can a party do when reasonable grounds for insecurity arise with respect to the performance of the other party?

Answer: Under the UCC, when reasonable grounds for insecurity arise with respect to the performance of either party, the other party may in writing demand adequate assurance of due performance and until he receives such assurance may, if commercially reasonable, suspend any performance for which he has not already received the agreed return because it provides a means to address insecurity.


Question: If a party indicates that he is unable or unwilling to perform, does the other party have the right to suspend his own performance?

Answer: Yes. If a party indicates that he is unable or unwilling to perform, the other party has the right to suspend his own performance because the indication of non-performance justifies the suspension.


Question: If a promisor continues his own performance after learning that a condition of duty has failed to occur, is this conduct likely to be found to operate as a waiver of that condition?

Answer: Yes. If a promisor continues his own performance after learning that a condition of duty has failed to occur, his conduct is likely to be found to operate as a waiver of that condition because the continuation implies acceptance.


Question: Are construction contracts often divisible?

Answer: Yes. Construction contracts are often divisible because they can be divided logically into a series of separate contracts in which services are performed in stages in exchange for payments of money.


Question: What must a contract be like to be divisible?

Answer: To be divisible, a contract must be such that: (1) the performance of each party is divided into two or more parts under the contract; (2) the number of parts due from each party is the same; and (3) the performance of each party by one party is the agreed-upon equivalent of the corresponding part from the other party because it allows the contract to be logically divided into stages for separate performance.


Question: Are doubtful and indefinite statements that performance may or may not take place enough to constitute anticipatory repudiation?

Answer: No. Doubtful and indefinite statements that performance may or may not take place are not enough to constitute anticipatory repudiation because there is no clear and unequivocal intent to not perform.


Question: If S enters into a valid contract to sell his car to B with delivery and payment to be made on May 10, and B tells S on May 3 that he might not make payment by the due date, what must S do before treating the contract as repudiated?

Answer: If S enters into a valid contract to sell his car to B with delivery and payment to be made on May 10, and B tells S on May 3 that he might not make payment by the due date, S must first demand adequate assurance before treating the contract as repudiated because B's statement is doubtful and does not constitute clear repudiation.


Question: If there are reasonable grounds to believe that the other party is unwilling or unable to perform, what can the insecure party do?

Answer: If there are reasonable grounds to believe that the other party is unwilling or unable to perform, the insecure party may make a demand for adequate assurance of performance and if the other party doesn't respond within a reasonable time (not exceeding 30 days), it is taken as a repudiation because the demand addresses the insecurity and non-response confirms repudiation.


Question: What is an anticipatory repudiation?

Answer: An anticipatory repudiation is where a party makes it clear that before performance is due, he does not intend to perform his duties because it shows an unequivocal intent to not fulfill contractual obligations.


Question: Can a buyer who accepts nonconforming goods in a single delivery contract sue for damages?

Answer: Yes. A buyer who accepts nonconforming goods in a single delivery contract can sue for damages because the acceptance of nonconforming goods does not waive the right to compensation for losses.


Question: In a single delivery contract, if the goods fail to conform to the specifications in the contract, what options does the buyer have?

Answer: In a single delivery contract, if the goods fail to conform to the specifications in the contract, the buyer has the right to reject all, accept all, or accept some and reject the rest because the nonconforming delivery does not meet the contractual terms.


Question: If a farmer contracts to provide a beer brewer with 5 crates of hops at his listed price of $1,000 per crate but mistakenly ships only 4 crates, what must the brewer do if he accepts the 4 crates?

Answer: If a farmer contracts to provide a beer brewer with 5 crates of hops at his listed price of $1,000 per crate but mistakenly ships only 4 crates, the brewer must pay the farmer $4,000, the listed price for the 4 crates he accepted, minus his damages, if any, caused by the farmer's failure to deliver the entire order because the brewer accepted the nonconforming goods and must pay for the accepted units.


Question: Under the UCC, what is a seller's nonconforming shipment in response to a buyer's order considered?

Answer: Under the UCC, a seller's nonconforming shipment in response to a buyer's order is both an acceptance and a breach of the parties' contract because the shipment does not conform to the agreed terms.


Question: What can a buyer do with a nonconforming delivery under the UCC?

Answer: A buyer can accept or reject the nonconforming delivery in its entirety or partially accept or reject any commercial units because the delivery does not meet the contract specifications.


Question: A milk supplier and an ice-cream company enter into a written contract for a delivery of 1000 gallons of milk every Monday for the next 50 weeks. The supplier tenders only 800 gallons on Tuesday for the 31st week. Must the company accept the 800 gallons?

Answer: Yes. The company must accept the 800 gallons if the late delivery and shortage do not significantly impair the value of that installment or the ice-cream company's operations. The nonconformity must not be substantial.


Question: In an installment contract, when can the buyer reject nonconforming goods?

Answer: In an installment contract, the buyer may reject nonconforming goods if the nonconformity substantially impairs the value of that shipment to the buyer and cannot be cured because it significantly affects the buyer's benefit from the shipment.


Question: Under the UCC substantial performance rule for installment contracts, when is a buyer entitled to reject the tender of partial delivery?

Answer: Under the UCC substantial performance rule for installment contracts, a buyer is entitled to reject the tender of partial delivery if that partial delivery constitutes a substantial impairment of that installment and it cannot be cured because the nonconformity significantly affects the buyer's benefit.


Question: If a promisee demands adequate assurance of performance from a promisor but has no reasonable grounds for insecurity, what can the promisor do?

Answer: If a promisee demands adequate assurance of performance from a promisor but has no reasonable grounds for insecurity, the promisor may properly refuse such unjustified or excessive demands and may seek damages if the promisee unjustifiably terminates the contract because the demand was not warranted.


Question: Is a delay in making the selection of goods by the buyer a material breach of the contract under the UCC if the seller has not changed its position?

Answer: No. A delay in making the selection of goods by the buyer is not a material breach of the contract under the UCC unless the seller has changed its position based on the non-receipt of the buyer's specification because the delay does not substantially affect the seller.


Question: Under the UCC, if a contract fails to provide for the type of goods to be sold and requires a selection to be made by the buyer at a later date, does a valid contract exist?

Answer: Yes. Under the UCC, if a contract fails to provide for the type of goods to be sold and requires a selection to be made by the buyer at a later date, a valid contract exists because the essential terms like price, quantity, and time for delivery are definite.


Question: If a party to a contract asks for an extension to perform after the agreed upon contract start date and the other party refuses, is it anticipatory repudiation if the party then states he will "try to commence the work" on the contract start date?

Answer: No. If a party to a contract asks for an extension to perform after the agreed upon contract start date and the other party refuses, it is not anticipatory repudiation if the party then states he will "try to commence the work" on the contract start date because the statement is not a positive and unconditional refusal to perform.


Question: Is a qualified or ambiguous refusal enough to constitute anticipatory repudiation?

Answer: No. A qualified or ambiguous refusal is not enough to constitute anticipatory repudiation because it does not show a clear and unequivocal intent to not perform.


Question: What is an anticipatory repudiation?

Answer: An anticipatory repudiation occurs if a party to a contract makes a positive and unconditional refusal to perform directed at the other party because it indicates a clear intent not to fulfill contractual obligations.


Question: If a party repudiates and the non-breaching party purchases a substitute, can the breaching party retract his repudiation?

Answer: No. If a party repudiates and the non-breaching party purchases a substitute, the breaching party cannot retract his repudiation because the non-breaching party materially changed position due to the breach.


Question: Is an employment contract for "permanent employment" actually only a contract for employment-at-will?

Answer: Yes. Generally, an employment contract for "permanent employment" is actually only a contract for employment-at-will because either party can terminate the agreement at any time without the termination being considered a breach, as long as it does not violate well-grounded public policies.


Question: If satisfactory assurance is given in a requirements contract, is the requesting party in breach if it then refuses to perform?

Answer: Yes. If satisfactory assurance is given in a requirements contract, the requesting party is in breach if it then refuses to perform because the assurance addresses the insecurity and obligates performance.


Question: In a requirements contract, what can one party do if it has reasonable grounds to worry that the other party might not perform?

Answer: In a requirements contract, if one party has reasonable grounds to worry that the other party might not perform, it can request adequate assurances of performance because the request addresses the insecurity.


Question: Does a mere request to cancel a contract constitute anticipatory breach?

Answer: No. A mere request to cancel a contract does not constitute anticipatory breach because the repudiation must be clear and unequivocal.


Question: Can a buyer reject a nonconforming installment of an installment contract if the nonconformity substantially impairs the value of that installment and it cannot be cured?

Answer: Yes. A buyer can reject a nonconforming installment of an installment contract if the nonconformity substantially impairs the value of that installment and it cannot be cured because the nonconformity significantly affects the buyer's benefit from that installment.


Question: Can a buyer who repudiates a contract retract the repudiation?

Answer: Yes. A buyer who repudiates a contract can retract the repudiation any time before the seller materially changes his position in reliance on the repudiation because the seller's change in position solidifies the breach.


Question: What can a seller do if his tender or delivery is rejected because it is non-conforming and the time for performance has not yet expired?

Answer: If a seller's tender or delivery is rejected because it is non-conforming and the time for performance has not yet expired, the seller may notify the buyer of his intention to cure and may then make a conforming delivery within the contract time because it allows the seller to correct the nonconformity.


Question: Can a seller notify the buyer of his intent to cure if the time for performance has not run out or the seller has reason to believe the buyer would accept non-conforming goods?

Answer: Yes. A seller can notify the buyer of his intent to cure if the time for performance has not run out or the seller has reason to believe the buyer would accept non-conforming goods because it provides an opportunity to correct the nonconformity.


Question: Under the UCC, does a buyer in a single delivery contract have the right to reject the goods if they fail in any respect to conform to the contract?

Answer: Yes. Under the UCC, a buyer in a single delivery contract has the right to reject the goods if they fail in any respect to conform to the contract because the goods do not meet the agreed specifications.


Question: Under the American view of contracts, what happens if one party tells the other party that they cannot perform under the contract unless they pay more money?

Answer: Under the American view of contracts, telling the other party you cannot perform under the contract unless they pay more money is a total breach of the contract because it constitutes an unjustified refusal to perform.


Question: Under the prevailing American view, what happens if one party says they cannot proceed with the work without an increase in price?

Answer: Under the prevailing American view, saying you cannot proceed with the work without an increase in price is a total breach of contract because it indicates an unjustified refusal to perform.


Question: If a buyer properly rejects non-conforming goods, can the buyer re-sell the goods in a private sale?

Answer: Yes. If a buyer properly rejects non-conforming goods, the buyer can re-sell the goods in a private sale so long as the seller is given reasonable notice of the buyer's intention to re-sell because it mitigates the buyer's losses.


Question: Can a delay in performance constitute a lack of substantial performance if "time of the essence" is not explicitly stated?

Answer: No. A delay in performance will not constitute a lack of substantial performance if "time of the essence" is not explicitly stated because the presumption is that time is not "of the essence" in a contract.


Question: Is time generally considered "of the essence" in a contract?

Answer: No. In a contract, the presumption is that time is not "of the essence" and a delay will not constitute a lack of substantial performance because language making "time of the essence" must be clear and unambiguous.


Question: If one party to a contract fails to perform, but the breach is not material, and the other party mitigates his damages by obtaining a commercially reasonable substitute, can the contract be discharged?

Answer: Yes. If one party to a contract fails to perform, but the breach is not material, and the other party mitigates his damages by obtaining a commercially reasonable substitute, the contract may be discharged because the mitigation of damages justifies the discharge of the contract.


Question: Is refusing to pay anything after proper or substantial work considered a breach of contract?

Answer: Yes. Refusing to pay anything after proper or substantial work is a total breach of contract because it constitutes a failure to fulfill the payment obligation.


Question: Does anticipatory repudiation by one party to a contract excuse the other party's duty to perform?

Answer: Yes. Anticipatory repudiation by one party to a contract excuses the other party's duty to perform because it indicates a clear intent to not fulfill contractual obligations.


Question: What does anticipatory repudiation by one party to a contract give rise to?

Answer: Anticipatory repudiation by one party to a contract gives rise to an immediate claim for damages for breach because it excuses the other party's duty to perform.


Question: Can a failure to perform under a contract be regarded as a material breach if the breach was not willful and there is a likelihood of cure?

Answer: No. A failure to perform under a contract may not be regarded as a material breach if the breach was not willful and there is a likelihood of cure because the possibility of remedying the breach mitigates its impact.


Question: If a seller repudiates by notifying the buyer it will not perform the contract, what options does the buyer have?

Answer: If a seller repudiates by notifying the buyer it will not perform the contract, the buyer may cancel and bring an immediate suit for breach or give the seller a commercially reasonable time to perform because the repudiation provides grounds for immediate legal action or an opportunity to cure.


Question: If a seller delivers nonconforming goods, what must the buyer do to properly reject the goods?

Answer: If a seller delivers nonconforming goods, the buyer must notify the seller of the breach within a reasonable time in order to properly reject the goods because timely notification is required to reject the nonconforming goods.


Question: Can a party renounce a contract due to a delay in completion if both parties did not specifically manifest an understanding that time was of the essence?

Answer: No. A party cannot renounce a contract due to a delay in completion unless both parties specifically manifested an understanding that time was of the essence because the presumption is that time is not "of the essence" unless clearly stated.


Question: Can a party recover damages for breach of contract if the contract was contingent on a certification of satisfactory completion by the other party and the other party cannot in good faith certify the completion?

Answer: No. A party cannot recover damages for breach of contract if the contract was contingent on a certification of satisfactory completion by the other party and the other party cannot in good faith certify the completion because the certification condition was not met.


Question: Does a party to a contract have a cause of action for breach of contract if the other party fails to complete the work by the agreed upon date?

Answer: Yes. A party to a contract has a cause of action for breach of contract if the other party fails to complete the work by the agreed upon date because the failure constitutes a breach of the agreed terms.


Question: Is a short delay in completing work considered a material breach of contract?

Answer: No. A short delay will not be deemed "material" unless the circumstances show that the delay seriously damaged the other party because not all delays are significant enough to constitute a material breach.


Question: Under the UCC, what is the measure of damages for non-delivery or repudiation by the seller?

Answer: Under the UCC, the measure of damages for non-delivery or repudiation by the seller is the difference between the market price at the time the buyer learned of the breach, and the contract price plus incidental and consequential damages because this measure compensates the buyer for the loss incurred.


Question: What factors determine the materiality of a breach?

Answer: The materiality of a breach depends on: (1) the amount of benefit the non-breaching party received; (2) the adequacy of the damages remedy; (3) the extent of part performance by the breaching party; (4) the hardship to the breaching party; (5) whether the breaching party's behavior was negligent or willful; and (6) the likelihood of the breaching party completing performance because these factors assess the significance of the breach.


Question: Does anticipatory repudiation apply to unilateral contracts?

Answer: No. Anticipatory repudiation only applies where there is an executory bilateral contract with executory duties on both sides because it does not apply to unilateral contracts or bilateral contracts fully performed by the non-repudiating party.


Question: If a tenant refuses entry to the landlord for showings because the lease did not specifically provide for the landlord to be present at showings, does this breach the implied covenant of good faith?

Answer: Yes. If a tenant refuses entry to the landlord for showings because the lease did not specifically provide for the landlord to be present at showings, the implied covenant of good faith would be breached because the tenant's arbitrary denial frustrates the landlord's purpose in agreeing to the lease.


Question: Is there an implied covenant of good faith and fair dealing in every contract?

Answer: Yes. Both the common law and statutes imply a covenant of good faith and fair dealing into every contract because it ensures fairness in the performance and enforcement of contracts.


Question: Is there an implied covenant of good faith and fair dealing in leases?

Answer: Yes. Some jurisdictions have specifically held that implicit in a lease is a covenant of good faith and fair dealing because it ensures fairness in the landlord-tenant relationship.


Question: Can a condition in a contract that requires the approval of the work by a third party be excused if the third party refuses to approve the work in bad faith?

Answer: Yes. A condition in a contract that requires the approval of the work by a third party will be excused if the third party refuses to approve the work in bad faith because bad faith refusal undermines the condition.


Question: Does an at-will employment contract contain an implied term prohibiting the employer from terminating the arrangement in bad faith?

Answer: Yes. An at-will employment contract contains an implied term prohibiting the employer from terminating the arrangement in bad faith because the implied term ensures fair treatment.


Question: If one party fails to fix an open price term in good faith, what options does the other party have?

Answer: If one party fails to fix an open price term in good faith, the other party may opt either (1) to treat the contract as canceled; or (2) to fix a reasonable price for the goods because it provides remedies for the bad faith action.


Question: Must a seller or buyer who reserves the right to fix a price do so in good faith?

Answer: Yes. A seller or buyer who reserves the right to fix a price must do so in good faith because it prevents exploitation and ensures fairness.


Question: Do goods sold by merchants, including food, have an implied warranty of merchantability?

Answer: Yes. Goods sold by merchants, including food, have an implied warranty of merchantability because it ensures that the goods meet certain standards of quality and fitness for their intended purpose.


Question: If an appliance supplier sends a letter to a customer offering to sell a commercial washing machine for $5,000 and the buyer responds with a letter stating "I accept your offer provided that you warrant the product to be merchantable," is this an effective acceptance?

Answer: Yes. If an appliance supplier sends a letter to a customer offering to sell a commercial washing machine for $5,000 and the buyer responds with a letter stating "I accept your offer provided that you warrant the product to be merchantable," this is an effective acceptance because it merely restates the implied warranty of merchantability in every UCC-2 contract where the seller is a merchant.


Question: If a contract requires shipment by a third party carrier but is silent as to which party pays the cost of carriage or the place of tender, what is presumed?

Answer: If a contract requires shipment by a third party carrier but is silent as to which party pays the cost of carriage or the place of tender, a shipment contract is presumed because the risk of loss passes from the seller to the buyer when the seller duly delivers the goods to the carrier.


Question: What happens to risk of loss in a shipment contract when the seller duly delivers the goods to a third-party carrier and a proper contract for their carriage is made?

Answer: In a shipment contract, the risk of loss passes from the seller to the buyer when the seller duly delivers the goods to a third-party carrier and a proper contract for their carriage is made because the buyer assumes responsibility once the goods are handed over to the carrier.


Question: If a tree company cuts down trees but the logs are destroyed by a lightning strike before they can be removed, is the company entitled to restitutionary interest?

Answer: Yes. If a tree company cuts down trees but the logs are destroyed by a lightning strike before they can be removed, the company is entitled to restitutionary interest because their performance is discharged by impracticability and they should be compensated for the reasonable value of the services rendered.


Question: What happens once a contract is determined to be unenforceable or excused due to impracticability, impossibility, frustration of purpose, mutual mistake, duress, or minority?

Answer: Once a contract is determined to be unenforceable or excused due to impracticability, impossibility, frustration of purpose, mutual mistake, duress, or minority, the parties are entitled to restitution damages because restitution entitles the party exercising the power of avoidance to recover any benefit conferred on the other party.


Question: Can death alone discharge contractual obligations?

Answer: No. Death alone does not discharge contractual obligations because the obligations generally survive the party's death, but one exception is a personal service contract where distinctly personal considerations are at the foundation of the contract.


Question: Can performance of a contract be discharged if a party's principal purpose is substantially frustrated by the occurrence of an event?

Answer: Yes. Performance of a contract may be discharged if a party's principal purpose is substantially frustrated by the occurrence of an event that the parties assumed would not occur at the time they made the contract because the frustration undermines the basis of the agreement.


Question: If a summer camp hires a yoga instructor for one month but the instructor is hospitalized for six days due to an illness, can the camp cancel the contract?

Answer: Yes. If a summer camp hires a yoga instructor for one month but the instructor is hospitalized for six days due to an illness, the camp is justified in cancelling the contract because the temporary impracticability and uncertainty over the duration of the illness excuse the camp's obligation to perform.


Question: What can the other party do if a party is unable to perform due to a temporary impracticability such as illness?

Answer: If a party is unable to perform due to a temporary impracticability such as illness, the other party may suspend performance of the contract and if there is a reasonable probability that substantial performance will not occur, cancel the contract because the uncertainty and potential burdens justify suspension or cancellation.


Question: Does the failure of a contracting party to consider a probable risk become an assumption of the risk by that party?

Answer: Yes. The failure of a contracting party to consider a probable risk becomes an assumption of the risk by that party because they did not account for the foreseeable risk.


Question: In the absence of explicit contractual statements otherwise, who generally assumes the risk that circumstances may arise that cause a seller's performance to become more difficult or not possible?

Answer: In the absence of explicit contractual statements otherwise, the seller generally assumes the risk that circumstances may arise that cause a seller's performance to become more difficult or not possible because the seller is responsible for ensuring performance under the contract.


Question: If events render performance of a contract only temporarily impossible, what happens to the duty of performing?

Answer: If events render performance of a contract only temporarily impossible, this will normally merely suspend the duty of performing until the impossibility ends because the obligation is paused, not terminated.


Question: If events render performance of the contract only temporarily impossible, is performance suspended until the impossibility ends?

Answer: Yes. If events render performance of the contract only temporarily impossible, performance is suspended until the impossibility ends unless performance would be much more burdensome, then suspension will turn into discharge because the increased burden justifies ending the obligation.


Question: Can a seller's duties be discharged if performance is impracticable due to an event such as an embargo, social upheaval, or a labor strike?

Answer: Yes. A seller's duties can be discharged if performance is impracticable due to an event such as an embargo, social upheaval, or a labor strike because such events make performance excessively difficult or impossible.


Question: Is performance excused by objective impossibility in a personal service contract if a skilled party is unable to perform due to illness?

Answer: Yes. Performance is excused by objective impossibility in a personal service contract if a skilled party is unable to perform due to illness because the inability to perform is beyond the party's control.


Question: If both parties can tender performance simultaneously, must they do so concurrently absent contrary language in the contract?

Answer: Yes. If both parties can tender performance simultaneously, they must do so concurrently absent contrary language in the contract because simultaneous performance is an implied condition of their duties.


Question: If one party fails to perform in a contract where both parties must tender performance concurrently, is the other party excused from its duty to perform?

Answer: Yes. If one party fails to perform in a contract where both parties must tender performance concurrently, the other party is excused from its duty to perform because the failure prevents the simultaneous exchange.


Question: Can a party treat the contract as repudiated if proper assurances are not given within a reasonable time under the UCC?

Answer: Yes. If proper assurances are not given within a reasonable time under the UCC, the party seeking assurances can treat the contract as repudiated because the failure to provide assurances indicates an intent not to perform.


Question: Under the UCC, what can a party do if reasonable grounds for insecurity arise regarding the performance of either party?

Answer: The party may in writing demand adequate assurance of due performance and suspend their own performance until they receive such assurance. This mechanism addresses concerns about the other party's ability to perform as agreed.


Question: What conditions must be met for an accord and satisfaction to be enforceable?

Answer: For an accord and satisfaction to be enforceable, payment must be tendered in the context of a good faith dispute as to the amount of the debt owed as "full satisfaction" of any claim that is unliquidated or the subject of a bona fide dispute because the good faith requirement ensures the settlement is legitimate.


Question: What is an accord and satisfaction?

Answer: An accord and satisfaction is a binding agreement settling a reasonable, good faith dispute over the terms and/or performance of a contract because it resolves the dispute through a mutually agreed settlement.


Question: Can a health danger excuse nonperformance of a contract?

Answer: Yes. A health danger can excuse nonperformance of a contract, but if it was foreseeable or self-inflicted, it will not excuse performance because the party assumed the risk of such conditions.


Question: What must the nonbreaching party do if nonperformance is excused due to a health danger?

Answer: The nonbreaching party must take reasonable steps to mitigate damages if nonperformance is excused due to a health danger because mitigation reduces the impact of the breach.


Question: Under the UCC, what are the concurrent conditions of exchange in a contract for the sale of goods?

Answer: Under the UCC, a seller's tender of delivery of goods and a buyer's tender of payment are concurrent conditions of exchange to the extent that the performances of the parties can be tendered simultaneously because both parties are bound to tender them simultaneously unless circumstances indicate otherwise.


Question: What happens if neither party in a UCC contract for the sale of goods is prepared to tender performance at the stipulated time?

Answer: If neither party in a UCC contract for the sale of goods is prepared to tender performance at the stipulated time, each party's performance obligation is discharged because simultaneous tendering is a condition of performance.


Question: A project manager enters into a written contract with a developer to serve "in the essential position" of on-site supervisor of the developer's construction project. The project manager is later injured and becomes physically incapable of performing the job as an on-site supervisor. Is the project manager in breach of contract?

Answer: No. The project manager is not in breach of contract because the impracticability excused his performance.


Question: If a project manager enters into a contract to serve "in the essential position" of on-site supervisor and is later injured, is he in breach of contract?

Answer: No. If a project manager enters into a contract to serve "in the essential position" of on-site supervisor and is later injured, he is not in breach of contract because the injury makes performance impracticable and excuses his duty to perform.


Question: What happens if both parties to a contract understand that the existence of a particular person is necessary for the performance of a duty and that person dies or loses capacity?

Answer: If both parties to a contract understand that the existence of a particular person is necessary for the performance of a duty and that person dies or loses capacity, the obligor's duty to render performance is discharged because the basic assumption of the contract has been undermined.


Question: What happens to a UCC contract for the sale of goods identified at the time the contract was made if the goods are totally destroyed without the fault of either party before the risk of loss has passed to the buyer?

Answer: If the goods are totally destroyed without the fault of either party and before the risk of loss has passed to the buyer in a UCC contract for the sale of goods identified at the time the contract was made, the contract is avoided and each party's performance is discharged because neither party is responsible for the destruction.


Question: Can a requirements contract be terminated if one party in good faith no longer has any further requirements for the goods?

Answer: Yes. A requirements contract may be terminated if one party in good faith no longer has any further requirements for the goods because the contract depends on the continued need for the goods.


Question: Can intoxication from alcohol or drugs render a contract voidable?

Answer: Yes. Intoxication from alcohol or drugs can render a contract voidable if the person entering into the contract was unable to understand the nature of the transaction because the intoxicated party lacks the capacity to consent.


Question: Is a contract voidable if one party is incapable of understanding the contract and the other party knows of this condition?

Answer: Yes. A contract is voidable if one party is incapable of understanding the contract and the other party knows of this condition because the incapacitated party cannot give informed consent.


Question: Is a contract involving a person subject to legal guardianship voidable?

Answer: No. A contract involving a person who is subject to a legal guardianship is not voidable but is simply void because the guardianship removes the ward's legal capacity to contract.


Question: Can a contract for a non-necessary item entered into by a minor be voidable due to incapacity?

Answer: Yes. A contract for a non-necessary item entered into by a minor is voidable due to incapacity because minors lack full legal capacity to enter binding contracts.


Question: Can a minor ratify a contract upon reaching the age of majority?

Answer: Yes. A minor can ratify a contract upon reaching the age of majority and the original promise becomes enforceable to the extent ratified because the minor's ratification confirms the contract.


Question: Are contracts of an infant voidable at the option of the infant?

Answer: Yes. Contracts of an infant are voidable at the option of the infant because minors have the right to disaffirm contracts.


Question: Can infants void insurance contracts?

Answer: No. Insurance contracts generally cannot be voided by infants because insurance contracts are often treated as exceptions to the general rule allowing infants to void contracts.


Question: Can an infant avoid a contract until a reasonable time after reaching the age of majority?

Answer: Yes. An infant has the option to avoid a contract until a reasonable time after reaching the age of majority because the law grants minors the right to disaffirm contracts to protect them from their lack of capacity.


Question: Can a minor affirm a contract once he turns 18?

Answer: Yes. A minor can affirm a contract once he turns 18 and is then responsible for the amount he offered to pay because the act of affirming confirms the minor's commitment to the contract terms.


Question: Does undue influence make a contract voidable?

Answer: Yes. Undue influence makes a contract voidable if the victim is coerced into signing the contract by someone taking advantage of a close or confidential relationship because the undue pressure invalidates the consent.


Question: Can a contract be rescinded due to duress if it was made under the threat of physical or economic harm?

Answer: Yes. A contract can be rescinded due to duress if it was made under the threat of physical or economic harm because duress undermines the voluntary nature of the agreement.


Question: What are the elements of undue influence that make a contract voidable?

Answer: The elements of undue influence that make a contract voidable are: (1) undue susceptibility to pressure by one party; and (2) excessive pressure by the other party because these factors undermine the victim's ability to make a free decision.


Question: Can a contract be reformed if a drafting error fails to capture the true intent of the parties?

Answer: Yes. A contract can be reformed if a drafting error fails to capture the true intent of the parties because reformation corrects the mistake to reflect the actual agreement.


Question: What must a party show to obtain reformation of a contract?

Answer: To obtain reformation of a contract, a party must show that: (1) there was an antecedent valid agreement; (2) that is incorrectly reflected in the writing; and (3) proof of these elements is established by clear and convincing evidence because reformation requires a strong basis for altering the written terms.


Question: Can a person avoid a contract based on mutual mistake if they are considered to bear the risk of the mistake?

Answer: No. A person who is considered to bear the risk of a mistake cannot avoid the contract based on mutual mistake because they assumed the risk of the unknown fact.


Question: Can the adversely affected party bear the risk of mistake when they contract with conscious awareness of their limited information about a fact?

Answer: Yes. The adversely affected party can bear the risk of mistake when they contract with conscious awareness of their limited information about a fact because they chose to proceed despite their lack of knowledge.


Question: If a mutual mistake occurs and neither party has reason to know the meaning attached by the other, is there a contract?

Answer: No. If a mutual mistake occurs and neither party has reason to know the meaning attached by the other, there is no contract because there is no mutual assent to the terms.


Question: Can a contract be voidable due to mutual mistake if the mistake goes to a basic assumption of the agreement and has a material adverse effect?

Answer: Yes. A contract can be voidable due to mutual mistake if the mistake goes to a basic assumption of the agreement and has a material adverse effect because the mistake undermines the foundation of the contract.


Question: Is a contract voidable if a horse purchased for breeding purposes turns out to be sterile?

Answer: Yes. If a horse is purchased for breeding purposes and turns out to be sterile, the contract is voidable because the mutual mistake goes to a basic assumption of the agreement and materially affects its value.


Question: Can a contract be rescinded on equitable grounds based on a unilateral mistake?

Answer: Yes. A contract can be rescinded on equitable grounds based on a unilateral mistake if the mistaken party can show that: (1) it was a material mistake; (2) the contract is currently unconscionable; (3) there was no violation of a positive legal duty or culpable negligence; (4) there is no prejudice to the other party; and (5) prompt notice of the error is given because these factors ensure that the mistake justifies rescission.


Question: If a buyer subjectively intends to buy a condo for $80,000 but mistakenly sends a written offer for $90,000, is there a defense of unilateral mistake?

Answer: No. There is no defense of unilateral mistake because the mistake was neither material nor unconscionable.


Question: Can S get the orally agreed price if B orally agrees to buy land at one price but the signed contract contains a lower price?

Answer: Yes. S can get the orally agreed price if he can prove there was a mistake in integration because it falls under the Statute of Frauds and Parol Evidence.


Question: Can a mistaken party rescind a contract under the modern view of unilateral mistake?

Answer: Yes. Under the modern view, a mistaken party can rescind if: (1) the mistake goes to a basic assumption of the contract, and (2) the hardship to the mistaken party outweighs the detriment to the nonmistaken party because these conditions justify rescission.


Question: Does mutual mistake exist if both the buyer and the seller rely on an appraisal that is wrong?

Answer: Yes. Mutual mistake exists because both parties relied on incorrect information, even if it is a mutual mistake about market value.


Question: Will a unilateral mistake prevent the formation of a contract?

Answer: No. As a general rule, where only one party is mistaken about facts relating to an agreement, the mistake will not prevent the formation of a contract because the mistake does not affect mutual assent.


Question: Does a unilateral mistake justify rescission if the other party did not have reason to know of the mistake?

Answer: No. A unilateral mistake does not justify rescission unless the other party had a reason to know because the mistake must have been apparent to the non-mistaken party.


Question: Can a buyer avoid a contract if his assent was induced by fraudulent or material misrepresentations?

Answer: Yes. Under the common law doctrine of misrepresentation, a buyer can avoid a contract if his assent was induced by fraudulent or material misrepresentations and he was justified in relying on those misrepresentations because these misrepresentations undermine the validity of the agreement.


Question: Can a plaintiff prevail in an action if he tells the defendant he is looking to buy a car that has never been in an accident, but the defendant sells him a car that had a major accident and was repaired before the defendant bought it?

Answer: Yes. The plaintiff will prevail because this is a material fact that was not revealed to the plaintiff before he bought the car.


Question: If A makes a true statement of his financial condition to Bank B to borrow money but his financial condition becomes seriously impaired shortly thereafter, is A's nondisclosure equivalent to a misrepresentation?

Answer: Yes. A's nondisclosure is equivalent to a misrepresentation because his financial condition seriously impaired, and this assertion is a misrepresentation.


Question: What is a misrepresentation under contract law?

Answer: A misrepresentation is an assertion that is not in accord with the facts. The nondisclosure of a fact may be equivalent to a misrepresentation when: (1) a person knows disclosure of the fact is necessary to prevent an assertion from being a misrepresentation, fraud, or material; (2) a person knows disclosure would correct a mistake of the other party with respect to a basic assumption; (3) a person knows disclosure would correct a mistake of the other party as to the contents or effect of a writing; or (4) there is a relationship of trust or confidence between the parties because these conditions make nondisclosure equivalent to misrepresentation.


Question: Can a defrauded party void a contract if they were induced to assent by a misrepresentation of a material term?

Answer: Yes. A contract is voidable at the option of the defrauded party if they were induced to assent by a misrepresentation of a material term because the misrepresentation undermines the validity of the contract.


Question: If a buyer contracts to buy a house because the seller misrepresents that the house is surrounded by a national park and the well water comes from an underground spring, can the buyer prevail in an action against the seller if these claims are false?

Answer: Yes. The buyer will prevail because the seller misrepresented facts known to be important to the buyer, and the buyer sought to void the contract soon after discovery of the deception.


Question: What are the elements of fraud in contract law?

Answer: The elements of fraud are: (1) a misrepresentation of a material fact occurs; (2) there is an intent to deceive; (3) the innocent party justifiably relies on the misrepresentation; and (4) the innocent party is injured. In such cases, the innocent party to a contract induced by fraud can either: (1) rescind the contract and seek restoration of his position before the contract; or (2) enforce the contract and seek damages for injuries caused by the fraud because these remedies address the harm caused by the fraud.


Question: Can a party avoid a contract if they were induced to enter into it by a fraudulent or material misrepresentation?

Answer: Yes. A party can avoid a contract if they were induced to enter into it by a fraudulent or material misrepresentation because the misrepresentation undermines the validity of the contract.


Question: Can B avoid a contract if S commits an affirmative act of misrepresentation by patching a wall without repairing the underlying termite damage and failing to reveal the damage to B?

Answer: Yes. B can avoid the contract because S's act of misrepresentation undermines the validity of the contract.


Question: Is a contract voidable at the election of B if S makes a representation that S knows is not true to induce B to assent to the contract?

Answer: Yes. The contract is voidable at the election of B because S's misrepresentation undermines the validity of the agreement.


Question: Is a seller liable for failure to disclose a latent defect?

Answer: Yes. A seller is liable for failure to disclose a latent defect because nondisclosure of material facts can be equivalent to misrepresentation.


Question: If A renovates B's house without a license, is B obligated to pay A?

Answer: Yes. B must pay A because the license is not central to the contract and it would be inequitable for B to receive a windfall.


Question: Is a contract made without a license unenforceable if the purpose of the licensing statute is to protect the public?

Answer: Yes. A contract made without a license whose purpose is to protect the public is unenforceable because it is against public policy.


Question: Can a contract be unenforceable based on public policy grounds if it violates a statute?

Answer: Yes. A contract that violates a statute may be unenforceable based on public policy grounds because such violations undermine the integrity of legal standards.


Question: Can a court enforce a contract that violates a statute if the violation is intended to protect the party seeking enforcement?

Answer: Yes. A court may enforce a contract that violates a statute if the violation is intended to protect the party seeking enforcement because it avoids frustrating the purpose of the statute.


Question: Is a promise to abstain from illegal activity, such as not using cocaine, in exchange for a reward enforceable?

Answer: No. A promise to abstain from illegal activity in exchange for a reward is void because of illegality.


Question: Does a service contract that is not capable of being performed within one year need to be in writing under the Statute of Frauds?

Answer: Yes. Under the Statute of Frauds, service contracts which are not capable of being performed within one year must be in writing because this requirement helps prevent fraudulent claims.


Question: Is an oral agreement for employment for a term of one year within the Statute of Frauds?

Answer: No. An oral agreement for employment for a term of one year is outside the Statute of Frauds because it can be performed within one year.


Question: Is a confirming memorandum valid under the UCC even if it incorrectly states or omits terms?

Answer: Yes. A confirming memorandum is valid under the UCC even if it incorrectly states or omits terms because it satisfies the Statute of Frauds as long as it evidences a contract for the sale of goods, is signed, and specifies a quantity.


Question: Is a memorandum confirming the terms of an oral agreement between merchants valid if it incorrectly states or omits terms?

Answer: Yes. A memorandum confirming the terms of an oral agreement between merchants is valid even if it incorrectly states or omits terms because it satisfies the Statute of Frauds.


Question: Is an oral contract for specially manufactured goods enforceable?

Answer: Yes. An oral contract for specially manufactured goods is enforceable when the seller has begun substantially to perform because the goods are not suitable for sale in the ordinary course of the seller's business.


Question: Is an oral promise for the sale of goods of $500 or more enforceable?

Answer: No. A promise for the sale of goods of $500 or more is not enforceable unless evidenced by a writing signed by the party to be charged because this is required by the Statute of Frauds.


Question: Does a change to any term of a contract need to be in writing if the original contract is subject to the Statute of Frauds?

Answer: Yes. If the original contract is subject to the Statute of Frauds, then a change to any term of the contract needs to be in writing because the Statute of Frauds requires modifications to be in writing to be enforceable.


Question: Is it a breach of contract if a supplier stops giving a promised 10% discount off its advertised price in a UCC requirements contract?

Answer: Yes. It is a breach of contract because the supplier must honor the terms of the agreement unless a modification is made in writing.


Question: Does a signed letter written after an oral promise to pay the debt of another satisfy the Statute of Frauds?

Answer: Yes. A signed letter written after the oral promise satisfies the Statute of Frauds because it provides the necessary written evidence of the agreement.


Question: Is an oral promise to pay the debt of another enforceable?

Answer: No. An oral promise to pay the debt of another does not satisfy the Statute of Frauds because such agreements must be in writing to be enforceable.


Question: Does the parol evidence rule apply if the parties to a written construction contract orally agree to the installation of 'extras'?

Answer: No. The parol evidence rule does not apply because the agreement to install 'extras' is a subsequent modification of the original contract.


Question: Does the Statute of Frauds apply if the parties to a written construction contract subsequently orally agree to the installation of 'extras'?

Answer: No. The Statute of Frauds does not apply because the agreement to install 'extras' is considered a modification of the original contract.


Question: Does a memorandum confirming the terms of an oral agreement between merchants satisfy the Statute of Frauds?

Answer: Yes. A memorandum confirming the terms of an oral agreement between merchants satisfies the Statute of Frauds unless the buyer objects within ten days of the memo because it provides written evidence of the agreement.


Question: Does proof of an oral promise to guarantee a loan satisfy the Statute of Frauds?

Answer: No. Proof of an oral promise to guarantee a loan is barred by the Statute of Frauds because such promises must be in writing to be enforceable.


Question: What is one major exception to the Statute of Frauds for land sale contracts?

Answer: One major exception to the Statute of Frauds for land sale contracts is the doctrine of part performance because it allows a party who has taken action in reliance on the contract to gain at least limited enforcement of it.


Question: Does an oral contract for labor that is performable within one year need to be in writing?

Answer: No. An oral contract for labor that is performable within one year does not need to be in writing because it is not within the Statute of Frauds.


Question: Is an oral contract for labor that is performable within one year within the Statute of Frauds?

Answer: No. An oral contract for labor that is performable within one year is not within the Statute of Frauds because a writing is not required for such contracts.


Question: Does a promise to assume the debt of another fall within the Statute of Frauds if it cannot be performed in less than one year?

Answer: Yes. A promise to assume the debt of another falls within the Statute of Frauds if it cannot be performed in less than one year because it must be in writing to be enforceable.


Question: Can Bob successfully raise the Statute of Frauds as a defense if Bob orally agrees to pay the debt of Charlie in a real estate contract with Sam but it is not mentioned in the contract itself?

Answer: Yes. Bob can successfully raise the Statute of Frauds as a defense because the agreement was to answer for the debt of another (Charlie) and was for the sale of an interest in land, which requires a written contract.


Question: Can Bob use the defense that Bob and Sam decided not to pay Charlie before Charlie found out about the oral agreement if Bob orally agrees to pay the debt of Charlie in a real estate contract with Sam?

Answer: Yes. Bob can use this defense because the agreement to pay Charlie's debt was not included in the written contract itself, and Bob and Sam decided not to pay Charlie before Charlie found out about the oral agreement.


Question: Are subsequent oral modifications valid if they are supported by consideration and do not fall under the Statute of Frauds?

Answer: Yes. Subsequent oral modifications are valid as long as they are supported by consideration and do not fall under the Statute of Frauds because a compromise of an honest dispute is considered valid consideration.


Question: Can a tenant gain enforcement of an oral land sale contract if they have paid installments in reliance on it?

Answer: Yes. A tenant can gain enforcement of an oral land sale contract if they have paid installments in reliance on it, as long as the payments are not regarded as part of the tenancy.


Question: Can any contract be modified or rescinded by oral agreement under common law?

Answer: Yes. Under common law, any contract can be modified or rescinded by the oral agreement of the parties, even if the original contract is in writing, but consideration is needed.


Question: Is an oral contract for specially manufactured goods enforceable?

Answer: Yes. An oral contract for specially manufactured goods is enforceable if the seller has made a substantial beginning in their manufacture because such goods are not suitable for sale to others in the ordinary course of the seller's business.


Question: Is a written promise to pay a debt barred by the Statute of Limitations enforceable?

Answer: Yes. A written promise to pay a debt barred by the Statute of Limitations is enforceable because it provides the necessary written evidence of the agreement.


Question: Does a written confirmation between merchants bind both parties under the Statute of Frauds?

Answer: Yes. A written confirmation between merchants binds both parties unless objected to within 10 days because the Statute of Frauds does not require the merchant charged to have signed the confirmation.


Question: Must modifications to contracts between merchants comply with the Statute of Frauds?

Answer: Yes. Modifications to contracts between merchants must comply with the Statute of Frauds because they need to be in writing to be enforceable.


Question: Does a promise to pay the debt of another have to be in writing if the main purpose of the underlying contract is to benefit the guaranteeing party?

Answer: No. If the main purpose of the underlying contract is to benefit the guaranteeing party, the promise does not have to be in writing because it is not within the Statute of Frauds.


Question: Does a promise to answer for the debt of another need specific language to fall within the Statute of Frauds?

Answer: Yes. A promise to answer for the debt of another must contain language such as 'if Debtor did not pay' to be within the Statute of Frauds because it specifies the condition under which the promise applies.


Question: Must a promise to pay a debt barred by the Statute of Limitations be in writing?

Answer: Yes. A promise to pay a debt barred by the Statute of Limitations must be a signed writing because it provides the necessary written evidence of the agreement.


Question: Is a written signed promise to pay a debt that is barred by the Statute of Frauds enforceable?

Answer: Yes. A written signed promise to pay a debt that is barred by the Statute of Frauds is legally enforceable because it provides the necessary written evidence of the agreement.


Question: Are subcontractor bids usually treated as irrevocable offers until the general contractor's prime bid is awarded or rejected?

Answer: Yes. Subcontractor bids are usually treated as irrevocable offers for a reasonable time until the general contractor's prime bid is awarded or rejected because they are considered binding under the doctrine of promissory estoppel.


Question: Can a general contractor recover expectation damages if a subcontractor withdraws its bid after the general contractor's prime bid is awarded?

Answer: Yes. The general contractor is entitled to recover expectation damages because the subcontractor's bid was treated as an irrevocable offer under the doctrine of promissory estoppel.


Question: What must a seller do if goods in a contract are specially manufactured and the buyer repudiates?

Answer: The seller must exercise reasonable commercial judgment and either complete the manufacture if a viable resale market exists or cease manufacture and resell the goods for scrap value because these actions allow the seller to recover the difference between the contract price of the goods and their resale price or sue for the full contract price if resale is impracticable.


Question: Does an employee have to take a different job to mitigate damages if an employer breaches an employment contract?

Answer: No. The employee is not required to take a different job to mitigate damages because the job must be substantially similar in terms of location, type of service, hours of work, and status.


Question: If an employer breaches an employment contract, does the employee have a duty to mitigate damages?

Answer: Yes. The employee has a duty to mitigate damages by making a reasonable effort to find comparable employment but is not required to take other employment that is inferior or different because the employee's duty is to minimize damages without compromising on job quality.


Question: Can attorney's fees be recovered if provided for in the contract or by statute?

Answer: Yes. Attorney's fees can be recovered if provided for in the contract or by statute because these provisions explicitly allow for the recovery of such fees.


Question: Do attorney's fees qualify as a recoverable incidental or consequential loss?

Answer: No. Attorney's fees generally do not qualify as a recoverable incidental or consequential loss unless provided for in the contract or by statute because they are not typically considered damages arising from a breach.


Question: Can a buyer recover damages if a seller delivers an antique chair worth $9,000 damaged and fails to pay for the $2,000 repair cost, resulting in the chair being worth only $6,000?

Answer: Yes. The buyer can recover $5,000 in damages because the measure of damage is the chair's value as warranted ($9,000), minus its value as repaired ($6,000), plus the repair costs ($2,000).


Question: What is the measure of damages for breach of warranty under the UCC?

Answer: The measure of damages for breach of warranty under the UCC is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted unless special circumstances show proximate damages of a different amount because this calculation reflects the loss resulting from the seller's breach.


Question: Is a non-breaching party entitled to recover damages that were foreseeable as a probable result of the breach?

Answer: Yes. A non-breaching party is entitled to recover damages that the party in breach had reason to foresee as a probable result of the breach when the parties entered into the contract because foreseeability determines the scope of recoverable damages.


Question: Is a borrower entitled to recover lost profits for breach of a contract to lend money?

Answer: No. A borrower cannot recover lost profits for breach of a contract to lend money because they are considered unforeseeable at the time of contract formation.


Question: What is the proper measure of damages for breach of a contract to lend money?

Answer: The proper measure of damages for breach of a contract to lend money is the additional cost of obtaining a loan from another lender because this measure reflects the direct financial impact of the breach.


Question: What is the measure of damages for a lost volume seller if a buyer wrongfully rejects a good?

Answer: The measure of damages for a lost volume seller if a buyer wrongfully rejects a good is the profit the manufacturer would have made on the sale of the item to the buyer because this reflects the lost opportunity to sell the goods.


Question: Is a buyer liable to the seller for the fair market value of goods at the time of conversion if the buyer exercises ownership over the goods by selling them to a third party after rightfully rejecting them?

Answer: Yes. The buyer is liable to the seller for the fair market value of the goods at the time of conversion because the buyer has wrongfully converted the goods.


Question: Can a contractor recover damages if a homeowner breaches after the contractor spent $45,000 on labor and materials but can use $5,000 of the materials on another job?

Answer: Yes. The contractor is entitled to damages of $50,000 because the contractor's damages include the profit expected ($10,000) plus the amount spent ($45,000) minus the amount used on another job ($5,000).


Question: Is a non-breaching party entitled to be put in the position as if the contract had been performed upon a breach?

Answer: Yes. Upon a breach, the non-breaching party should be put in the position as if the contract had been performed, plus reasonable expenses for mitigating after the breach because this ensures the non-breaching party is made whole.


Question: Is a nonbreaching party entitled to receive the contract price for work done and any foreseeable damages if a price for the services was stated in the contract?

Answer: Yes. The nonbreaching party is entitled to receive the contract price for work done and any foreseeable damages because the contract governs the compensation for the services provided.


Question: Can the seller recover the profit and costs incurred minus the proceeds from the resale if a purchaser repudiates a UCC contract?

Answer: Yes. If a purchaser repudiates a UCC contract, the seller is entitled to the profit the seller would have made, plus allowance for costs reasonably incurred, minus the proceeds received from the resale of the goods because these elements reflect the seller's loss due to the repudiation.


Question: Is a contract for the construction of 3 different houses on 3 different lots for 3 different prices divisible?

Answer: Yes. A contract for the construction of 3 different houses on 3 different lots for 3 different prices is divisible because each house is treated as a separate contract.


Question: What is the measure of damages recoverable by a lost volume seller for a buyer's breach?

Answer: The measure of damages recoverable by a lost volume seller for a buyer's breach is the profit the seller would have made on the sale plus any incidental damages because this reflects the lost opportunity to sell the goods.


Question: Can a contractor recover from the landlord based on quasi contract if the tenant does not pay and the landlord is unjustly enriched by services performed?

Answer: Yes. A contractor can recover from the landlord based on quasi contract if the tenant does not pay because the landlord's unjust enrichment by the services performed creates a quasi-contractual obligation.


Question: Does the non-breaching party have a right to damages based on his expectation interest?

Answer: Yes. The non-breaching party has a right to damages based on his expectation interest because this is measured by the loss in the value of the other party's performance caused by its failure or deficiency.


Question: What are the seller's damages if a buyer repudiates a contract?

Answer: If a buyer repudiates a contract, the seller's damages are the contract price minus their cost because this represents their lost profit.


Question: What is the measure of damages if a contractor is in breach of contract?

Answer: If a contractor is in breach of contract, the measure of damages is the cost to get the house completed by another contractor minus installments not yet paid to the first contractor because this reflects the homeowner's cost to complete the contract.


Question: When does the risk of loss pass to the buyer in a contract specifying 'F.O.B. Seller's place of business'?

Answer: In a contract specifying 'F.O.B. Seller's place of business,' the risk of loss passes to the buyer when the goods are delivered to the shipper because this fulfills the seller's delivery obligation.


Question: What is the non-breaching party's recovery in a breach of contract action?

Answer: In a breach of contract action, the non-breaching party will recover the difference between the original contract price and the cover contract price because this represents the additional cost incurred due to the breach.


Question: What is the remedy to a buyer of nonconforming goods?

Answer: The remedy to a buyer of nonconforming goods is the difference between the contract price and the cost of buying substitute goods because this compensates the buyer for the nonconformity.


Question: Can a party in breach of contract recover the reasonable value of its services if the other party derives a benefit and knew payment was expected?

Answer: Yes. A party in breach of contract can recover the reasonable value of its services if the other party derives a benefit and knew that payment was expected because the benefit conferred creates a quasi-contractual obligation.


Question: Can you recover the reasonable value of improvements made to land if the contract to purchase the land is invalid?

Answer: Yes. If you improve land expecting to purchase it, but the contract is invalid, you can recover the reasonable value of the improvements because benefits were unofficiously and non-gratuitously conferred to the other party under the theory of quasi-contract.


Question: Does a provision in a sales agreement requiring a pre-inspection payment impair a buyer's right of inspection or legal remedies?

Answer: No. A provision in a sales agreement requiring a pre-inspection payment does not impair a buyer's right of inspection or legal remedies because these rights remain intact regardless of the payment provision.


Question: When does the risk of loss pass to the buyer for non-merchants?

Answer: For non-merchants, the risk of loss does not pass to the buyer until tender of the goods because the buyer must be given an opportunity to take possession before assuming the risk.


Question: Is a party to a contract entitled to be paid for his work before completing performance if the contract says nothing about progress payments?

Answer: No. Unless a contract contains language about progress payments, a party to a contract is not entitled to be paid for his work until he completely performs because the obligation to pay is conditioned on complete performance.


Question: Are consequential damages recoverable in contract disputes?

Answer: No. Consequential damages are generally not recoverable in contract disputes unless they were reasonably foreseeable to the breaching party at the time of the contract because foreseeability determines the scope of recoverable consequential damages.


Question: Can a non-breaching party recover incidental damages in contract disputes?

Answer: Yes. A non-breaching party may always recover incidental damages because these costs are incurred in dealing with the breach.


Question: Is a breaching party liable for consequential damages if both parties knew at contract formation that the non-breaching party would sustain little or no damages due to a minor delay?

Answer: No. The breaching party is not liable for consequential damages if both parties knew at contract formation that the non-breaching party would sustain little or no damages due to a minor delay because the damages were not foreseeable.


Question: Is a nonbreaching party entitled to consequential damages if he fails to mitigate?

Answer: No. A nonbreaching party who fails to mitigate is only entitled to damages to put him in the position he would have been in had the contract been performed because he is not entitled to consequential damages if he fails to mitigate.


Question: Are consequential damages only recoverable if they were reasonably foreseeable by the breaching party or within the contemplation of the parties at the time of the contract?

Answer: Yes. Consequential damages are only recoverable if it is determined the damages were reasonably foreseeable by the breaching party or within the contemplation of the parties at the time of the contract because foreseeability limits the scope of recoverable consequential damages.


Question: Can a party recover consequential damages if the damages were foreseeable by any reasonable person, regardless of whether the defendant actually foresaw them?

Answer: Yes. A party to a contract can recover consequential damages if the damages were foreseeable by any reasonable person because foreseeability does not require actual foresight by the defendant.


Question: Can damages for personal injuries be recovered in a contract action if the loss was foreseeable?

Answer: Yes. Damages for personal injuries can be recovered in a contract action if such a loss was foreseeable because foreseeability extends to all types of losses caused by the breach.


Question: Can a seller keep a deposit if a purchaser defaults and the contract includes a liquidated damages provision?

Answer: Yes. If there is a provision in a real estate contract for liquidated damages and the purchaser defaults, the seller can keep the deposit if it reflects the seller's damages because the liquidated damages provision sets the agreed amount of compensation for the breach.


Question: Can a plaintiff recover actual damages if a liquidated damages clause is deemed punitive?

Answer: Yes. If a party breaches but actual damages are minimal, a liquidated damages clause may be deemed punitive, and a plaintiff will only recover actual damages because courts do not enforce punitive liquidated damages.


Question: What is a penalty or forfeiture clause in a contract?

Answer: A penalty or forfeiture clause is a sum in excess of the value of the contract and fixed to be paid on breach of the contract because it serves as a deterrent rather than a compensation for the breach.


Question: Is a liquidated damages clause equal to 50% of the contract price considered a penalty?

Answer: Yes. A liquidated damages clause equal to 50% of the contract price is a penalty making the contract invalid and unenforceable because it imposes an excessive burden not reflective of actual damages.


Question: A buyer agrees to purchase lumber from a seller for $15,000 with delivery to be made on June 1. The price of lumber increases substantially on May 15, and the seller tells the buyer it won't deliver the lumber unless the buyer agrees to pay $20,000 and waive any claim for damages against the seller. Is this a repudiation?

Answer: Yes. This is a repudiation because the seller is demanding a modification of the contract terms and refusing to perform the original agreement unless the modification is accepted.


Question: Does a demand for modification constitute repudiation under the UCC?

Answer: No. A demand for modification is not itself a repudiation, but if the party wrongfully states that it will not perform unless the other party consents to a modification, that statement amounts to repudiation because it signals an unwillingness to fulfill contractual obligations.


Question: Can a nonbreaching party recover expectation damages?

Answer: Yes. A nonbreaching party can recover expectation damages if they occur naturally, or are consequences that were contemplated by the parties because expectation damages aim to place the injured party in the position he would have been in had the contract been fully performed.


Question: A programmer sells his internet company to a multinational corporation for $10 million under a contract that also promises to hire the programmer for three years at a salary of $1 million per year. The corporation fires the programmer without cause after one year. Can the programmer recover the promised salary for the remaining two years if a comparable job is not reasonably available?

Answer: Yes. The programmer can recover the promised salary for the remaining two years because he is not required to take another job that is not substantially similar in regards to location, type of service, hours of work, and status.


Question: Does an employee have a duty to mitigate damages if an employer breaches an employment contract?

Answer: Yes. An employee has a duty to mitigate damages by making a reasonable effort to find comparable employment because this reduces the overall loss sustained due to the breach.


Question: An experienced attorney contracts with a law firm at a salary of $5 million to lead the firm's insurance department as a managing partner. The firm notifies the attorney that it will instead offer him a position as a senior associate at another department at a salary of $2 million. The attorney declines another firm's offer of $4 million to head its insurance department to pursue an LLM. How much can the attorney recover?

Answer: The attorney can recover only $1 million because a party in an employment contract recovers his expectation damages, minus any amount of loss that could have been avoided with reasonable efforts at obtaining a comparable position.


Question: What happens if an employee refuses to mitigate damages by finding comparable employment after an employer breaches an employment contract?

Answer: If an employee fails or refuses to mitigate damages by finding comparable employment, the employee's recovery is reduced by the amount of the loss that could have been avoided because failure to mitigate limits the damages recoverable.


Question: Both parties to a contract intended to include a provision in the contract but through a mutual mistake they forget to include it in the written contract. Can the court modify the contract to include the provision?

Answer: Yes. The court will modify the contract to express that agreement because reformation corrects the mutual mistake and ensures the contract reflects the parties' original intention.


Question: What is reformation of a contract?

Answer: Reformation is a court order effectively rewriting contract documents to correct mistakes because it ensures the written contract accurately reflects the parties' original agreement.


Question: Can a contract be reformed if the mistake is unilateral but induced by fraudulent conduct?

Answer: Yes. A contract can be reformed to the original contract if the mistake is unilateral but induced by fraudulent, unfair, or inequitable conduct because the reformation corrects the fraud-induced error.


Question: Can a contract be rescinded due to knowledge of a debt not owed?

Answer: Yes. A contract can be rescinded if one party knows the debt is not owed because the other party's lack of knowledge creates a basis for rescission.


Question: What are the damages for a seller's breach of a real estate sale contract if specific performance is not available?

Answer: If specific performance is not available, the measure of damages for a seller's breach of a real estate sale contract is the difference between the sales price and the fair market value of the property on the date of the breach because this reflects the buyer's loss due to the breach.


Question: Will a court grant specific performance in a land-sale contract where the seller has not yet conveyed and the buyer breaches the contract?

Answer: Yes. In a land-sale contract where the seller has not yet conveyed and the buyer breaches the contract, a court will grant specific performance because the remedy ensures the seller receives the agreed-upon consideration.


Question: Can you compel performance in a personal service contract if the services are unique?

Answer: No. In a personal service contract, you cannot compel the person to perform, even if the services are unique because personal service contracts require voluntary cooperation.


Question: A contractor wrongfully abandons work after erecting part of a building. The market value of the work done before abandonment is $5,000, but the amount of the contract price attributable to that work is only $4,000. How much can the contractor recover?

Answer: The contractor cannot recover more than $4,000 because restitutionary recovery is limited to the smaller of the market value of what was done or the portion of the price allocated to the performance under the contract.


Question: Can a breacher recover under the contract after partially performing?

Answer: No. When a party materially breaches a contract after having partially performed, the breacher cannot recover under the contract but can obtain restitution for the value of the benefit conferred because the breacher is at fault for breaking the contract.


Question: Are reliance damages recoverable if negotiations fail without an enforceable contractual obligation?

Answer: No. Reliance damages are not recoverable if negotiations fail and there are no enforceable contractual obligations unless one party conferred a benefit on the other because parties are free to negotiate without risk of liability.


Question: Does a nonbreaching party have a right to damages based on his expectation interest?

Answer: Yes. A nonbreaching party has a right to damages based on his expectation interest because this measure aims to put the injured party in the position he would have been in had the contract been performed.


Question: What must a seller do if a buyer rightfully rejects delivery or justifiably revokes acceptance under the UCC?

Answer: If a buyer rightfully rejects delivery or justifiably revokes acceptance under the UCC, the seller must pay restitution by returning any down payment received because the law of restitution seeks to restore the benefit conferred to the breaching party.


Question: Can a buyer resell nonconforming goods if the seller refuses to restore or repay?

Answer: Yes. If a buyer pays for nonconforming goods and the seller refuses to restore the goods or repay the buyer, the buyer can resell the goods at public or private sale to credit the amount owed by the seller to the buyer because this mitigates the buyer's loss.


Question: Do courts deny restitution to a party that has willfully breached?

Answer: Yes. Many courts deny restitution to a party that has willfully breached because the breaching party should not benefit from its own wrongdoing.


Question: Is restitution an elective remedy to repudiation in all jurisdictions?

Answer: Yes. All jurisdictions recognize restitution as an elective remedy to repudiation because it allows the non-breaching party to recover benefits conferred on the breaching party.


Question: Can a breaching party seek restitution damages after partial performance?

Answer: Yes. If a party wrongfully breaches after partial performance, the breaching party can still seek restitution damages in quantum meruit because restitution compensates for the value of the benefit conferred, minus the non-breaching party's damages.


Question: If a party wrongfully breaches after partial performance, can the breaching party seek restitution damages?

Answer: Yes. The breaching party can seek restitution damages in quantum meruit because restitution compensates for the value of the benefit conferred, minus the non-breaching party's damages.


Question: Is course-of-dealing evidence admissible to explain or supplement a final written agreement under the UCC?

Answer: Yes. Under the UCC's parol evidence rule, course-of-dealing evidence is admissible to explain or supplement a final written agreement because it reflects the parties' prior conduct and helps clarify the terms.


Question: In a conflict over the terms of a contract, which trumps: express terms, course of dealing, or usage of trade?

Answer: Express terms trump course of dealing and usage of trade, and course of dealing trumps usage of trade because the hierarchy of terms ensures that the most explicit agreement controls.


Question: Is trade usage admissible to explain or supplement express terms in a UCC contract for the sale of goods?

Answer: Yes. In a UCC contract for the sale of goods, trade usage is admissible to explain or supplement express terms because it is deemed consistent with the express terms unless it completely negates them.


Question: How can a UCC contract be explained or supplemented if there is nothing in writing to the contrary?

Answer: A UCC contract may be explained or supplemented by course of dealing, usage of trade, or course of performance because these provide context and clarify the parties' intent.


Question: If parties to a contract have differing interpretations of a material term, whose interpretation controls?

Answer: If parties to a contract have differing interpretations of a material term, the interpretation of the party who knew the other party's interpretation at the time of contract controls because it reflects the reasonable expectation of the parties.


Question: Does a delay in delivery constitute a breach of contract if usage in the relevant trade allows a leeway?

Answer: No. A delay in delivery does not constitute a breach of contract if usage in the relevant trade allows a leeway in the specified time of delivery because trade usage provides flexibility unless expressly negated by the contract.


Question: What controls in a dispute over compensation between an employer and an employee?

Answer: In a dispute over compensation between an employer and an employee, an express contractual provision regarding compensation will control because it explicitly states the agreed-upon terms.


Question: What is the best indication of what the parties intended the writing to mean?

Answer: Course of performance is the best indication of what the parties intended the writing to mean because it reflects how the parties have consistently acted under the contract.


Question: Can the terms of a contract be explained or supplemented by parol evidence?

Answer: Yes. The terms of a contract may be explained or supplemented by parol evidence because it provides additional context and clarifies the parties' intent.


Question: A buyer purchases a laptop from a computer store, and the salesman has to go into the back to get a laptop from inventory to fulfill the order. When is the laptop identified to the contract?

Answer: The laptop is identified to the contract once the salesman picks the laptop or puts a shipping label on the box because identification links the specific goods to the contract and establishes the buyer's interest.


Question: When does a buyer of goods obtain an insurable interest in the goods?

Answer: A buyer of goods obtains an insurable interest in the goods as soon as the goods are identified to the contract because identification links the specific goods to the contract and establishes the buyer's interest.


Question: How is a contract that requires payment within a time period of completion interpreted?

Answer: A contract that requires payment within a time period of completion is objectively interpreted to mean within a time period after completion because this interpretation aligns with reasonable expectations.


Question: A beneficiary in whose favor a contract is made is an intended beneficiary. If A enters into a contract with C where A will perform work for C and then C will pay $50,000 to B to repay a debt owed to B by A. If A completes the work but C incurred costs of $3,000 to correct minor problems with the work, how much is C obligated to pay B?

Answer: C is only obligated to pay $47,000 to B because C stands in the place of A, and B's right is based on the contract between A and C.


Question: Who is an intended beneficiary in a contract?

Answer: A beneficiary in whose favor a contract is made is an intended beneficiary because the contract specifically aims to benefit that person.


Question: Is an express promise by a debtor to pay a debt barred by the statute of limitations enforceable without new consideration?

Answer: Yes. An express promise by a debtor to pay a debt barred by the statute of limitations is legally enforceable without new consideration because the promise revives the obligation.


Question: A man contracts to sell his house to an investor for $500,000, of which $200,000 is to be paid to a hospital. The hospital can sue the investor to enforce its right to the $200,000 payment. Why?

Answer: The hospital can sue the investor to enforce its right to the $200,000 payment because the contract specifically named the hospital as an intended beneficiary and its contractual rights vested upon the commencement of its lawsuit.


Question: When do an intended beneficiary's rights vest in a third-party beneficiary contract?

Answer: An intended beneficiary's rights vest if, before receiving notice of a rescission or modification, the beneficiary materially changes his position in reliance on the promise, brings suit on the promise, or manifests assent to it because these actions solidify the beneficiary's interest in the contract.


Question: A patient becomes seriously infected when a cleaning company fails to meet a local health code. Can the patient sue the cleaning company for breach of contract?

Answer: No. The patient has no breach of contract claim against the cleaning company because the hospital did not intend to give her the benefit of the performance, making the patient an incidental beneficiary.


Question: Is a non-contracting party who benefits from a contract between two other persons always an intended beneficiary?

Answer: No. A non-contracting party who benefits from a contract is an intended beneficiary if the contracting parties intended the benefit to flow to him; otherwise, he is an incidental beneficiary because intent determines the beneficiary's status.


Question: Can parties modify a contract for an intended beneficiary after the beneficiary's rights have vested?

Answer: No. Parties cannot modify the contract once the intended beneficiary's rights have vested because the vested rights protect the beneficiary's interest in the contract.


Question: Can an incidental beneficiary sue on a contract they are not a party to?

Answer: No. An incidental beneficiary has no rights to sue on a contract they are not a party to because only intended beneficiaries have enforceable rights.


Question: Does a promise in a contract create a duty in the promisor to any intended beneficiary to perform the promise?

Answer: Yes. A promise in a contract creates a duty in the promisor to any intended beneficiary to perform the promise because the intended beneficiary may enforce the duty.


Question: Is an intended beneficiary entitled to enforce a promise in a contract?

Answer: Yes. An intended beneficiary is entitled to enforce a promise in a contract because the promise creates a duty in the promisor to perform the promise for the beneficiary's benefit.


Question: To be a third party beneficiary, must other parties have a motive to benefit you?

Answer: Yes. To be a third party beneficiary, other parties must have a motive to benefit you because their intention to benefit you is required for third-party beneficiary status.


Question: Does a direct promise need to be made to an intended third party beneficiary for that beneficiary to successfully enforce the contract?

Answer: No. A direct promise does not need to be made to an intended third party beneficiary in order for that beneficiary to successfully enforce the contract because a release of the contract is ineffective without the agreement of the third party beneficiary.


Question: When do the rights of a third-party beneficiary vest?

Answer: The rights of a third-party beneficiary vest when the beneficiary manifests assent to the promise, sues to enforce the promise, or justifiably relies on the promise to his detriment because these actions solidify the beneficiary's interest in the contract.


Question: Is it a defense for a physician sued for breach of contract for discontinuing treatment to an intended beneficiary that no consideration was furnished by the intended beneficiary?

Answer: No. It is not a defense that no consideration was furnished by the intended beneficiary or that there was no contract between the physician and the intended beneficiary because the intended beneficiary can still enforce the promise.


Question: Can a third-party creditor beneficiary of a contract sue the promisor for breach?

Answer: Yes. A third-party creditor beneficiary of a contract can sue the promisor for breach because the creditor beneficiary has enforceable rights under the contract.


Question: Can the original parties to a contract with a third-party beneficiary modify the contract if the beneficiary was not aware of the contract?

Answer: Yes. The original parties to a contract with a third-party beneficiary can modify the contract if the beneficiary was not aware of the contract because no vesting has occurred.


Question: Who is an intended beneficiary in a contract?

Answer: A person is an intended beneficiary if the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary because the performance is intended to benefit the beneficiary.


Question: What happens if a beneficiary does not fall into the category of an intended beneficiary?

Answer: If a beneficiary does not fall into the category of an intended beneficiary, he is an incidental beneficiary because the promisee does not intend to give the beneficiary the benefit of the promised performance.