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Question 1
Ben and Jerry are two Vermont entrepreneurs who would like to open an ice cream store. Bob, who is a good friend of Ben and Jerry's, owns Moo Juice, Inc., a dairy farm in the area. Bob promises that if Ben and Jerry open their store, he will sell Ben and Jerry all of the milk they need for $1 per gallon for the first year that they are in business. Two years later, Ben and Jerry open their store. However, the market price for milk has risen to $2 per gallon and Bob refuses to sell milk to Ben and Jerry for less than that. If Ben and Jerry sue Bob for breach, they will:
Correct
Incorrect!
Correct A condition precedent is a condition that must be met before the performing party has a duty to perform. Then, once the condition is met, the duty to perform is triggered. In other words, where a contract contains a condition precedent, there is no duty to perform until the condition is met. Once the condition is met, performance is required. Here, the condition precedent to Bob's promise was Ben and Jerry opening an ice cream store. Once Ben and Jerry opened the store, Bob's duty to sell milk to them at $1 per gallon was triggered. That being the case, Ben and Jerry will be able to recover from Bob and B is the correct answer.
Incorrect! A condition precedent is a condition that must be met before the performing party has a duty to perform. Then, once the condition is met, the duty to perform is triggered. In other words, where a contract contains a condition precedent, there is no duty to perform until the condition is met. Once the condition is met, performance is required. Here, the condition precedent to Bob's promise was Ben and Jerry opening an ice cream store. Once Ben and Jerry opened the store, Bob's duty to sell milk to them at $1 per gallon was triggered. That being the case, Ben and Jerry will be able to recover from Bob and B is the correct answer.
Correct
Incorrect!
Correct
Incorrect!
Question 2
Ben and Jerry are two Vermont entrepreneurs who would like to open an ice cream store. Bob, who is a good friend of Ben and Jerry's, owns Moo Juice, Inc., a dairy farm in the area. Bob promises that if Ben and Jerry open their store, he will sell Ben and Jerry all of the milk they need for $1 per gallon until Eddie, a large commercial ice cream manufacturer, signs Bob to be his exclusive milk supplier. Two years later, Eddie tries to negotiate a deal with Bob but the contract falls through. However, Bob works out a deal to be Breyers Ice Cream's exclusive milk supplier. As a result, Bob cancels his contract with Ben and Jerry. If Ben and Jerry sue for breach, they will:
Correct A condition subsequent is a condition that arises after the duty to perform has begun and, if met, releases the performing party from his duty to perform. In other words, where a contract contains a condition subsequent, there is a duty to perform until the condition is met. Once the condition is met, the duty to perform is terminated. Here, the condition that would have cut off Bob's obligation to Ben and Jerry, being signed by Eddie, was not satisfied. That being the case, Bob is still obligated to supply milk to Ben and Jerry for $1 per gallon. Therefore, Ben and Jerry can recover from Bob and A is the correct answer.
Incorrect! A condition subsequent is a condition that arises after the duty to perform has begun and, if met, releases the performing party from his duty to perform. In other words, where a contract contains a condition subsequent, there is a duty to perform until the condition is met. Once the condition is met, the duty to perform is terminated. Here, the condition that would have cut off Bob's obligation to Ben and Jerry, being signed by Eddie, was not satisfied. That being the case, Bob is still obligated to supply milk to Ben and Jerry for $1 per gallon. Therefore, Ben and Jerry can recover from Bob and A is the correct answer.
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Question 3
Ben and Jerry are two Vermont entrepreneurs who would like to open an ice cream store. Bob, who is a good friend of Ben and Jerry's, owns Moo Juice, Inc., a dairy farm in the area. Bob promises that if Ben and Jerry open their store, he will sell Ben and Jerry all of the milk they need for $1 per gallon for the first year that they are in business. Two years later, Ben and Jerry open their store. However, the market price for milk has risen to $2 per gallon and Bob refuses to sell milk to Ben and Jerry for less than that. If Ben and Jerry sue Bob for breach, they will have to prove that the condition that triggered Bob's obligation was satisfied if they are to win the case:
Correct Procedurally, in a cause of action for breach of contract where the contract contains a condition precedent, the burden of proof is on the plaintiff to show that the condition precedent has been met. Here, the cause of action involves a contract containing a condition precedent. That being the case, the burden of proof is on Ben and Jerry, as the plaintiffs, to prove that the condition triggering Bob's performance has been satisfied. Therefore, TRUE is the correct answer.
Incorrect! Procedurally, in a cause of action for breach of contract where the contract contains a condition precedent, the burden of proof is on the plaintiff to show that the condition precedent has been met. Here, the cause of action involves a contract containing a condition precedent. That being the case, the burden of proof is on Ben and Jerry, as the plaintiffs, to prove that the condition triggering Bob's performance has been satisfied. Therefore, TRUE is the correct answer.
Correct
Incorrect!
Question 4
Ben and Jerry are two Vermont entrepreneurs who would like to open an ice cream store. Bob, who is a good friend of Ben and Jerry's, owns Moo Juice, Inc., a dairy farm in the area. Bob promises that if Ben and Jerry open their store, he will sell Ben and Jerry all of the milk they need for $1 per gallon until Eddie, a large commercial ice cream manufacturer, signs Bob to be his exclusive milk supplier. Two years later, Eddie tries to negotiate a deal with Bob but the contract falls through. However, Bob works out a deal to be Breyers Ice Cream's exclusive milk supplier. As a result, Bob cancels his contract with Ben and Jerry. If Ben and Jerry sue Bob for breach, they will have to prove that the condition that canceled Bob's obligation was not satisfied if they are to win the case:
Correct
Incorrect!
Correct In a cause of action for breach of contract where the contract contains a condition subsequent, the burden of proof is on the defendant to prove that the conditions have or have not been met. That being the case, the burden here is on Bob, not Ben and Jerry, to prove that the condition canceling his obligation was satisfied. Therefore, FALSE is the correct answer.
Incorrect! In a cause of action for breach of contract where the contract contains a condition subsequent, the burden of proof is on the defendant to prove that the conditions have or have not been met. That being the case, the burden here is on Bob, not Ben and Jerry, to prove that the condition canceling his obligation was satisfied. Therefore, FALSE is the correct answer.
Question 5
College Painters, Inc. is a painting company, staffed and run by Boston College Students. Howard owns a house near the B.C. campus and hires College Painters to paint his house. The contract states that the company will paint the house white with blue trim and that Howard will pay the company $10,000 if he is satisfied with the work. Howard is dissatisfied with the work and refuses to pay. If the company sues Howard for breach of contract, Howard will:
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Correct If a contract contains a condition of payment that is determined by satisfaction with the performance, and the contract is a construction or manufacturing contract or any kind of contract that involves mechanical fitness or marketability, satisfaction is measured by the reasonable man standard. In this situation, if the reasonable man would be satisfied with the company's work, Howard must pay the company the contract price, even if he himself hates the way the house looks. That being the case, D is the correct answer.
Incorrect! If a contract contains a condition of payment that is determined by satisfaction with the performance, and the contract is a construction or manufacturing contract or any kind of contract that involves mechanical fitness or marketability, satisfaction is measured by the reasonable man standard. In this situation, if the reasonable man would be satisfied with the company's work, Howard must pay the company the contract price, even if he himself hates the way the house looks. That being the case, D is the correct answer.
Question 6
College Painters, Inc. is a painting company, staffed and run by Boston College Students. Howard owns a house near the B.C. campus and hires College Painters to paint his house. The contract states that the company will paint the house white with blue trim and that Howard will pay the company $10,000 if Mike, the real estate salesman whom Howard has hired to appraise his house after it is painted, is satisfied with the work. Mike is dissatisfied with the work and Howard refuses to pay. If the company sues Howard for breach of contract, Howard will:
Correct
Incorrect!
Correct If the required condition to be met is the satisfaction of a third person, the actual personal satisfaction of the third person is what determines whether or not the condition has been met. However, where actual personal satisfaction is required, the party's dissatisfaction must be in good faith. If his expression of dissatisfaction is not in good faith, the court will consider the condition of satisfaction to have been fulfilled. Here, because Mike's satisfaction will determine whether or not Howard has to pay, the condition's satisfaction is measured by Mike's personal satisfaction. So long as Mike is dissatisfied with the work and his dissatisfaction is in good faith, Howard will not have to pay the company. Therefore, B is the correct answer.
Incorrect! If the required condition to be met is the satisfaction of a third person, the actual personal satisfaction of the third person is what determines whether or not the condition has been met. However, where actual personal satisfaction is required, the party's dissatisfaction must be in good faith. If his expression of dissatisfaction is not in good faith, the court will consider the condition of satisfaction to have been fulfilled. Here, because Mike's satisfaction will determine whether or not Howard has to pay, the condition's satisfaction is measured by Mike's personal satisfaction. So long as Mike is dissatisfied with the work and his dissatisfaction is in good faith, Howard will not have to pay the company. Therefore, B is the correct answer.
Correct
Incorrect!
Correct
Incorrect!
Question 7
Howard has just bought a house in Boston and he hires ScapeArtists, Inc. to landscape his front and back yards. The contract states that ScapeArtists will landscape the grounds and that Howard will pay the company $10,000 if he is satisfied with the work. Howard is dissatisfied with the work and refuses to pay. If the company sues Howard for breach of contract, Howard will:
Correct
Incorrect!
Correct If a contract contains a condition of payment that is determined by satisfaction with the performance, and the subject of the contract involves personal taste or judgments, the condition of satisfaction will be determined by the actual person's satisfaction. Here, the contract involves Howard's personal taste. That being the case, he will not have to pay ScapeArtists if he is unsatisfied with their work and his dissatisfaction is in good faith. Therefore, B is the correct answer.
Incorrect! If a contract contains a condition of payment that is determined by satisfaction with the performance, and the subject of the contract involves personal taste or judgments, the condition of satisfaction will be determined by the actual person's satisfaction. Here, the contract involves Howard's personal taste. That being the case, he will not have to pay ScapeArtists if he is unsatisfied with their work and his dissatisfaction is in good faith. Therefore, B is the correct answer.
Correct
Incorrect!
Correct
Incorrect!
Question 8
Michelangelo hires Picasso to paint his portrait. Michelangelo promises to pay Picasso $8,000 and an extra $2,000 if he finishes the painting within a week. Picasso has almost finished the painting by the end of the sixth day. However, when he arrives at Michelangelo's house on the seventh day to finish the painting, Michelangelo refuses to let Picasso in. On the eighth day, after Picasso has finished the painting, Michelangelo pays him $8,000. If Picasso sues for the extra $2,000, he will:
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Correct There is usually no duty to perform a contract unless the express condition contained in the contract has been fulfilled. However, there are situations in which conditions may be excused so that the duty to perform is there even though the condition has not been met. One situation where a condition will be excused is if the party that benefits from the condition wrongfully interferes with the fulfillment of the condition. Here, Michelangelo, who benefited from having the painting finished within a week, wrongly interfered with Picasso, who would have finished the painting on time had there been no interference. That being the case, the condition that Picasso had to fulfill in order to collect the extra $2,000 is excused. Therefore, Picasso can recover the extra $2,000 from Michelangelo and D is the correct answer.
Incorrect! There is usually no duty to perform a contract unless the express condition contained in the contract has been fulfilled. However, there are situations in which conditions may be excused so that the duty to perform is there even though the condition has not been met. One situation where a condition will be excused is if the party that benefits from the condition wrongfully interferes with the fulfillment of the condition. Here, Michelangelo, who benefited from having the painting finished within a week, wrongly interfered with Picasso, who would have finished the painting on time had there been no interference. That being the case, the condition that Picasso had to fulfill in order to collect the extra $2,000 is excused. Therefore, Picasso can recover the extra $2,000 from Michelangelo and D is the correct answer.
Question 9
Ben and Jerry and Moo Juice enter into a contract under which, Moo Juice promises to sell Ben and Jerry all of the milk that they need and Ben and Jerry promise to pay $1 per gallon of milk. One week before the first shipment of milk is due, Moo Juice declares bankruptcy and goes out of business. Rising equipment costs, falling prices and the threat of mad cow disease have all combined to basically ruin the dairy industry and Moo Juice had no choice but to go out of business. If Ben and Jerry sue Moo Juice for breach of contract, they will:
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Correct Many contracts, requirement and output contracts in particular, are conditioned on the parties to the contract actually staying in business. If a company goes out of business in the middle of such a contract, courts will usually protect the company from liability if they close for economic reasons that are not connected to the other party to the contract. However, closing down to avoid losses on the actual contract itself will not protect them from liability. Here, Moo Juice closed down for economic reasons that had nothing to do with Ben and Jerry or the contract that Moo Juice had with them. That being the case, Ben and Jerry cannot recover from Moo Juice and D is the correct answer.
Incorrect! Many contracts, requirement and output contracts in particular, are conditioned on the parties to the contract actually staying in business. If a company goes out of business in the middle of such a contract, courts will usually protect the company from liability if they close for economic reasons that are not connected to the other party to the contract. However, closing down to avoid losses on the actual contract itself will not protect them from liability. Here, Moo Juice closed down for economic reasons that had nothing to do with Ben and Jerry or the contract that Moo Juice had with them. That being the case, Ben and Jerry cannot recover from Moo Juice and D is the correct answer.
Question 10
Ben and Jerry and Moo Juice enter into a contract under which Moo Juice is to deliver ten thousand gallons of milk to Ben and Jerry's ice cream manufacturing plant on May 1st and Ben and Jerry will pay $1 per gallon. The contract calls for Moo Juice to deliver the milk to the plant's loading dock. When Moo Juice's trucks arrive at the plant, the entrance to the loading dock is locked shut and blocked by several large broken ice cream making machines. Not being able to deliver the milk, the trucks return to the Moo Juice farm. Ben and Jerry sue Moo Juice for breach of contract. They will probably:
Correct
Incorrect!
Correct
Incorrect!
Correct There is an implied condition of cooperation under which the obligation of one party to perform on the contract is conditioned on the other party's cooperation in that performance. Here, Ben and Jerry violated this condition by not providing a clear loading dock for Moo Juice to make their delivery at. That being the case, Ben and Jerry will not be able to recover from Moo Juice and C is the correct answer.
Incorrect! There is an implied condition of cooperation under which the obligation of one party to perform on the contract is conditioned on the other party's cooperation in that performance. Here, Ben and Jerry violated this condition by not providing a clear loading dock for Moo Juice to make their delivery at. That being the case, Ben and Jerry will not be able to recover from Moo Juice and C is the correct answer.