Master Contract Termination: Discharge of Contracts Made Easy

Question 1

Which of the following is NOT a recognized method for discharging a contract under U.S. contract law?

Accepted Answer

Assignment

Answer

Performance

Answer

Agreement

Answer

Novation

Question 2

Explain the elements and operation of accord and satisfaction as a method of contract discharge.

Accepted Answer

A new agreement supported by consideration that discharges the original contract.

Answer

A new agreement that modifies the original contract but does not discharge it.

Answer

A unilateral act by one party that discharges the original contract without the consent of the other party.

Answer

A court order that declares the original contract void or unenforceable.

Question 3

According to the doctrine of substantial performance, when is a party's performance considered complete?

Accepted Answer

When it is substantially similar to the agreed-upon terms, providing the other party with the benefit of the bargain

Answer

When it exactly matches the specifications of the contract

Answer

When it is rejected by the other party

Answer

Never, as complete performance is always required

Question 4

What is the primary purpose of a novation?

Accepted Answer

To extinguish an existing contract and create a new one

Answer

To create a new contract without affecting any existing contracts

Answer

To modify an existing contract without creating a new one

Answer

To terminate an existing contract without creating a new one

Question 5

Which of the following is NOT a requirement for an effective release?

Accepted Answer

Delivery to the obligor

Answer

Intent to extinguish the obligation

Answer

Consideration

Answer

Acceptance by the obligee

Question 6

The Statute of Frauds requires certain types of contracts to be in writing to be enforceable. True or False?

Accepted Answer

True

Answer

False

Question 7

Which of the following is NOT an essential element for a legally binding release?

Accepted Answer

Acceptance by only one party

Answer

Mutual intent to terminate the contract

Answer

Valuable consideration

Answer

Legal capacity of the parties involved

Question 8

True or False: Performance of a contract can discharge the parties from their obligations, even if the performance is not complete.

Accepted Answer

True

Answer

False

Question 9

Which of the following actions constitutes a material breach of contract?

Accepted Answer

A breach that significantly impairs the value of the contract to the non-breaching party.

Answer

A breach that causes only minor inconvenience.

Answer

A breach that is not foreseeable.

Answer

A breach that is excused by the doctrine of impossibility.

Question 10

What is the legal effect of rescinding a contract?

Accepted Answer

It cancels the contract and restores the parties to their pre-contract positions.

Answer

It modifies the terms of the contract.

Answer

It suspends the performance of the contract.

Answer

It terminates the contract for breach.

Question 11

Which of the following is NOT a type of anticipatory breach?

Accepted Answer

Partial performance

Answer

Repudiation

Answer

Prevention

Answer

Impossibility

Question 12

Accord and satisfaction is a form of:

Accepted Answer

Discharge by agreement.

Answer

Discharge by breach.

Answer

Discharge by performance.

Answer

Discharge by rescission.

Question 13

What is the purpose of a release in contract law?

Accepted Answer

To discharge a party from liability through a unilateral act.

Answer

To modify the terms of a contract through a bilateral agreement.

Answer

To assert a defense in a breach of contract action.

Answer

To obtain a court order terminating a contract.

Question 14

Under what circumstances does a release effectively discharge a contract?

Accepted Answer

When agreed upon by both parties

Answer

When performance has already been completed

Answer

When the contract is illegal

Answer

When one party has significantly breached the contract

Question 15

Which of the following is NOT a method of discharging a contract by agreement?

Accepted Answer

Substitution

Answer

Rescission

Answer

Novation

Answer

Accord and satisfaction

Question 16

What is the primary purpose of an accord and satisfaction?

Accepted Answer

To discharge a contract and substitute a new obligation

Answer

To replace an existing contract with a new one

Answer

To modify the terms of an existing contract

Answer

To create a new contract and discharge an existing obligation

Question 17

In a discharge by novation, what is the legal effect of the new contract?

Accepted Answer

It extinguishes the old contract

Answer

It supplements the old contract

Answer

It has no effect on the old contract

Answer

It revives the old contract

Question 18

Which of the following is NOT a recognized method for discharging a contract?

Accepted Answer

Estoppel

Answer

Performance

Answer

Agreement

Answer

Rescission

Question 19

Which of these is NOT a way to legally end a contract?

Accepted Answer

The Statute of Frauds

Answer

Full performance by both parties

Answer

Mutual agreement to cancel the contract

Answer

Rescission, where both parties agree to undo the contract

Question 20

Which of these DOES NOT end a contract legally?

Accepted Answer

One party breaking the contract terms

Answer

Full performance of the agreement

Answer

Mutual agreement to cancel

Answer

Rescission by both parties

Question 21

When parties mutually agree to terminate a contract, it is referred to as:

Accepted Answer

Agreement

Answer

Novation

Answer

Rescission

Answer

Release

Question 22

Which of the following involves the cancellation of a contract and the restoration of parties to their pre-contract positions?

Accepted Answer

Rescission

Answer

Accord and satisfaction

Answer

Release

Answer

Novation

Question 23

When a new contract replaces an existing one, the process is referred to as:

Accepted Answer

Novation

Answer

Accord and satisfaction

Answer

Release

Answer

Rescission

Question 24

Which of the following involves the acceptance by the creditor of something different from what was originally owed?

Accepted Answer

Accord and satisfaction

Answer

Release

Answer

Rescission

Answer

Novation

Question 25

A formal written document that relieves a party from their contractual obligations is known as a:

Accepted Answer

Release

Answer

Rescission

Answer

Novation

Answer

Accord and satisfaction

Question 26

When one party fails to fulfill their contractual obligations, it is known as a:

Accepted Answer

Breach

Answer

Frustration

Answer

Default

Answer

Repudiation

Question 27

When performance of a contract becomes impossible due to unforeseen circumstances, it may be discharged on the grounds of:

Accepted Answer

Frustration

Answer

Rescission

Answer

Breach

Answer

Novation

Question 28

Which of the following is NOT a recognized method of discharging a contract?

Accepted Answer

Lapse of Time

Answer

Rescission

Answer

Agreement

Answer

Performance

Question 29

When a contract is discharged by performance, what must be shown?

Accepted Answer

Complete and substantial performance of all contractual obligations.

Answer

Performance of a material portion of the contract.

Answer

Performance to the satisfaction of the promisor.

Question 30

Which of the following accurately describes the legal effect of rescission?

Accepted Answer

It restores the parties to the positions they were in before the contract was entered into.

Answer

It only applies to contracts that are void from the beginning.

Answer

It can be granted even if the breach of contract was not material.

Question 31

What is the fundamental distinction between novation and accord and satisfaction?

Accepted Answer

Novation substitutes a new contract for the old one, while accord and satisfaction discharges the old contract by substituting a new performance.

Answer

Novation can only occur if the new contract is in writing.

Question 32

When a release is given, what is its legal effect?

Accepted Answer

It discharges the promisor from any further obligation under the contract.

Answer

It can be revoked at any time by the promisee.

Answer

It only discharges the promisor from liability for breach of contract.

Question 33

Which of the following is NOT a recognized defense to a claim for breach of contract?

Accepted Answer

Statute of Frauds

Answer

Mutual rescission

Answer

Impossibility of performance

Answer

Failure of consideration

Question 34

What is the legal consequence of a material breach of contract?

Accepted Answer

It gives the non-breaching party the right to terminate the contract and seek damages.

Answer

It automatically terminates the contract.

Answer

It only gives the non-breaching party the right to suspend performance.

Question 35

When is a party entitled to damages for breach of contract?

Accepted Answer

When the breach causes the non-breaching party to suffer a loss.

Answer

When the breach is material.

Answer

When the breach is willful.

Question 36

A party's obligation under a contract may be terminated by death, incapacity, or impossibility of performance if:

Accepted Answer

The event occurs before performance is due and is not caused by the party's own fault.

Answer

The event occurs after performance is due.

Answer

The party foresees the event.

Answer

The party causes the event.

Question 37

When a party accepts something of value in lieu of the performance due under a contract, the party has:

Accepted Answer

Accorded and satisfied the contract.

Answer

Rescinded the contract.

Answer

Released the contract.

Answer

Novated the contract.

Question 38

A party can avoid the consequences of an anticipatory breach by:

Accepted Answer

Retracting the repudiation before the other party changes its position in reliance.

Answer

Waiting for the other party to perform.

Answer

Filing a lawsuit against the other party.

Answer

Accepting the repudiation.

Question 39

For a contract to be discharged by performance, what is the primary requirement?

Accepted Answer

Complete and substantial performance by both parties

Answer

Conditional performance

Answer

Partial performance by one party

Question 40

What is the legal effect of a novation on the original contract?

Accepted Answer

It extinguishes the original contract and creates a new one in its place.

Answer

It suspends the original contract

Answer

It modifies the original contract

Question 41

Which of the following is NOT a type of accord and satisfaction?

Accepted Answer

Rescission

Answer

Satisfaction

Answer

Accord

Question 42

What is the primary effect of a release on a contract?

Accepted Answer

It discharges the obligor from their contractual obligations

Answer

It voids the contract

Answer

It modifies the contract

Question 43

What is the measure of damages for a breach of contract to purchase goods?

Accepted Answer

The difference between the contract price and the market price at the time and place of tender or acceptance

Answer

The actual loss suffered by the injured party

Question 44

Which of the following is NOT a consequence of a material breach of contract?

Accepted Answer

The non-breaching party is still obligated to perform their obligations

Answer

The non-breaching party may terminate the contract

Answer

The non-breaching party may suspend their performance

Question 45

What is the primary goal of the Statute of Frauds?

Accepted Answer

To prevent fraud by mandating that certain types of contracts be in writing

Answer

To provide a uniform set of contract rules

Answer

To protect the rights of minors

Question 46

Which of the following is NOT a method of discharging a contract by mutual agreement?

Accepted Answer

Operation of law (e.g., statute of limitations)

Answer

Mutual rescission (canceling the contract)

Answer

Novation (substituting a new party)

Answer

Accord and satisfaction (accepting a different performance)

Question 47

A contract is discharged by performance when:

Accepted Answer

Both parties have completely fulfilled their contractual obligations as agreed.

Answer

Both parties have partially fulfilled their obligations.

Answer

One party has substantially performed their obligations, but there are minor deviations.

Answer

One party has fulfilled their obligations, but the other party has not.

Question 48

A release is a document that:

Accepted Answer

Formally releases a party from liability for a specific breach of contract or for future breaches.

Answer

Allows parties to mutually rescind a contract.

Answer

Modifies the terms of an existing contract.

Answer

Substitutes a new contract for an existing one.

Question 49

A novation is a contract that:

Accepted Answer

Replaces an existing party with a new party in a contract, with the consent of all parties.

Answer

Creates a new contract with different terms and parties.

Answer

Modifies the terms of an existing contract.

Answer

Releases a party from liability for a breach of contract.

Question 50

Which of the following is an example of a material breach of contract, potentially leading to discharge?

Accepted Answer

Failure to deliver goods of the agreed-upon quality or quantity, rendering the contract's purpose ineffective.

Answer

Late delivery of goods, where time was not of the essence and the delay is minor.

Answer

Minor defect in goods, easily remedied without significant impact on the contract's purpose.

Answer

Failure to pay a small amount of money, not materially affecting the overall contract.

Question 51

The doctrine of anticipatory repudiation applies when:

Accepted Answer

One party unequivocally communicates their intention to breach the contract before the performance date.

Answer

Both parties agree to terminate the contract.

Answer

One party expresses doubts about their ability to perform, but does not definitively state they will breach.

Answer

One party fails to perform their obligations on the performance date.

Question 52

A party who seeks to discharge a contract based on impossibility of performance must prove that:

Accepted Answer

The performance became objectively impossible due to unforeseen circumstances beyond the control of either party.

Answer

The performance became difficult or expensive, but not entirely impossible.

Answer

The party was unable to perform due to their own negligence or lack of effort.

Answer

The party did not anticipate the impossibility at the time of contract formation, but could have with reasonable diligence.