COB 318 CHP 11 EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
what is voluntary consent and what might it be lacking - Answers Knowing and voluntary agreement
to the terms of a contract, if it is lacking, the contract can be voidable
May be lacking because of a mistake, misrepresentation, undue influence, or duress
what are mistakes of fact - Answers The other party to the contract knows or should have known that
a mistake of fact was made
The error was due to a substantial mathematical mistake in addition , subtraction, division, or
multiplication, and was made inadvertently and without gross (extreme) negligence
what is a bilateral mistake - Answers A bilateral, or mutual, mistake is made by both of the parties
what is a mistake of value - Answers a mistake concerns the future market value or quality of the
object of the contract, the mistake is one of value and the contract normally is enforceable
what is a fraudulent misrepresentation - Answers refers only to misrepresentation that is consciously
false and is intended to mislead another
what are the elements of a fraudulent misrepresentation - Answers A misrepresentation of a material
fact must occur by words or actions
There must be an intent to deceive
-- Knowledge on the part of the misrepresenting party that facts have been misrepresented
The innocent party must justifiably rely on the misrepresentation
To collect damages, a party must have been harmed as a result of the misrepresentation
-- Most courts do not require a showing of injury in an action to rescind a contract
-- To recover damages caused by fraud, proof of harm is universally required
what is a scienter and what does it go under - Answers Scienter → guilty knowledge, generally
signifies that there was an intent to deceive and exists if a party makes a statement that he or she
believes not to be true or makes a statement recklessly, without regard to whether it is true or false
what is undue influence - Answers arises from relationships in which one party can greatly influence
another party, thus overcoming that party's free will
-- A contract entered into as a result of excessive or undue influence lacks voluntary consent and is
therefore voidable
-- Can also arise from a number of fiduciary relationships
what is duress and what needs to be established - Answers a defense to the enforcement of a
contract and a ground for the rescission of a contract
To establish this, there must be proof of a threat to do something that the threatening party has no
right to do
what is a contract - Answers private agreement between the parties who have entered into it and
traditionally these parties alien have rights and liabilities under the contract - privity of contract
what is a third party - Answers one who is not a direct party to a particular contract - normally does
not have rights under that contract
what are the exceptions of the rule to privity of contract - Answers Allows a party to a contract to
transfer the rights or duties arising from the contract to another person through an assignment (of
rights) or a delegation (of duties)
Involves a third party beneficiary contract - a contract in which the parties to the contract intend that
the contract benefit a third party
what are assignments - Answers transfer of contractual rights to a third party (occurs after original
contract)
what are the parts of an assignment - Answers Bilateral contract → two parties have corresponding
rights and duties, the obligee has a right to require the other to perform some task and the obligor
has a duty to perform it
The party assigning the rights to a third party is the assignor
The party receiving the right is the assignee
what are the exceptions for an assignment - Answers Assignment is prohibited by statute
The contract is for personal services (ex. tutoring)
The assignment significantly changes the risk or duties of the obligor
The contracts prohibits assignment
what is a delegation - Answers transfer of a contractual duties to a third party (occurs after original
contract)
who is a or and ee for a delegation - Answers Party delegating the duties is the delegator
, Party to whom the duties are delegated is the delegatee
what is circumstances are a delegation prohibited - Answers When special trust has been placed in
the obligor
When performance depends on the personal skills or talents of the obligor
When performed by a third party will vary materially from that expected by the obligee
When the contract expressly prohibits delegate
what is a third party - Answers Third party → the for whose benefit a promise is made in a contract
but who is not a party to the contract
what is an intended beneficiary and wha goes under it - Answers Intended beneficiary → the third
party has legal rights and can sue the promisor directly for breach of the contract
-- An incidental beneficiary is a third person who receives a benefit from a contract even though that
person's benefit is not the reason the contract was made
what is a way to discharge or terminate contractural duties by the performance of those duties -
Answers Discharge → The termination of an obligation. In contract law, discharge occurs when the
parties have fully performed their contractual obligations or when events, conduct of the parties, or
operation of law releases the parties from performance. In bankruptcy proceedings, the extinction of
the debtor's dischargeable debts. The termination of an obligation.
Performance → In contract law, the fulfillment of one's duties arising under a contract with another;
the normal way of discharging one's contractual obligations.
The duty to perform under any contract may be conditioned on the occurrence or nonoccurrence of a
certain event, or the duty may be absolute
what are the two conditions of a performance - Answers Condition → a qualification in a contract
based on possible future event, the occurrence or nonoccurrence of the event will trigger the
performance of a legal obligation or terminate an existing obligation
Condition precedent → in contractual agreement, a condition that must be met before a party's
promise becomes absolute
what is discharge by performance? - Answers Tender → an unconditional offer to perform by a
person who is ready, willing, and able to do so
what are the two types of performance - Answers Complete performance
Substantial performance
what is complete performance - Answers when a party performs exactly as greed, there is no
question as to whether the contract has been performed or is perfect it is said to be complete
what is a substantial performance - Answers a party who in good faith performs substantially all of
the terms of a contract can enforce the contract against the other party under the doctrine of
substantial performance, has basic requirements...
The party must have performed in good faith. Intentional failure to comply with the contract terms is
a breach of the contract.
The performance must not vary greatly from the performance promised in the contract. An omission,
variance, or defect in performance is considered minor if it can easily be remedied by compensation
(monetary damages).
The performance must create substantially the same benefits as those promised in the contract.
what effects the duty to perform - Answers If performance is substantial, the other party's duty to
perform remains absolute (except that the party can sue for damages due to the minor deviations). In
other words, the parties must continue performing under the contract (for instance, making payment
to the party who substantially performed). If performance is not substantial, there is a material
breach, and the nonbreaching party is excused from further performance.
what is the measure of damages - Answers because substantial performance is not perfect, the other
party is entitled to damages
Measure of damages is the cost to bring the object of the contract into compliance with its terms, if
that cost is unreasonable under the circumstances
If the cost is unreasonable, the measure of damages is the difference in value between the
performance that was rendered and the performance that would have been rendered if the contract
had been performed completely.
what is the performance to the satisfaction of another - Answers when the subject matter of the
contract is personal, the obligation is conditional, and performance must actually satisfy the party in
the specified contract
what is voluntary consent and what might it be lacking - Answers Knowing and voluntary agreement
to the terms of a contract, if it is lacking, the contract can be voidable
May be lacking because of a mistake, misrepresentation, undue influence, or duress
what are mistakes of fact - Answers The other party to the contract knows or should have known that
a mistake of fact was made
The error was due to a substantial mathematical mistake in addition , subtraction, division, or
multiplication, and was made inadvertently and without gross (extreme) negligence
what is a bilateral mistake - Answers A bilateral, or mutual, mistake is made by both of the parties
what is a mistake of value - Answers a mistake concerns the future market value or quality of the
object of the contract, the mistake is one of value and the contract normally is enforceable
what is a fraudulent misrepresentation - Answers refers only to misrepresentation that is consciously
false and is intended to mislead another
what are the elements of a fraudulent misrepresentation - Answers A misrepresentation of a material
fact must occur by words or actions
There must be an intent to deceive
-- Knowledge on the part of the misrepresenting party that facts have been misrepresented
The innocent party must justifiably rely on the misrepresentation
To collect damages, a party must have been harmed as a result of the misrepresentation
-- Most courts do not require a showing of injury in an action to rescind a contract
-- To recover damages caused by fraud, proof of harm is universally required
what is a scienter and what does it go under - Answers Scienter → guilty knowledge, generally
signifies that there was an intent to deceive and exists if a party makes a statement that he or she
believes not to be true or makes a statement recklessly, without regard to whether it is true or false
what is undue influence - Answers arises from relationships in which one party can greatly influence
another party, thus overcoming that party's free will
-- A contract entered into as a result of excessive or undue influence lacks voluntary consent and is
therefore voidable
-- Can also arise from a number of fiduciary relationships
what is duress and what needs to be established - Answers a defense to the enforcement of a
contract and a ground for the rescission of a contract
To establish this, there must be proof of a threat to do something that the threatening party has no
right to do
what is a contract - Answers private agreement between the parties who have entered into it and
traditionally these parties alien have rights and liabilities under the contract - privity of contract
what is a third party - Answers one who is not a direct party to a particular contract - normally does
not have rights under that contract
what are the exceptions of the rule to privity of contract - Answers Allows a party to a contract to
transfer the rights or duties arising from the contract to another person through an assignment (of
rights) or a delegation (of duties)
Involves a third party beneficiary contract - a contract in which the parties to the contract intend that
the contract benefit a third party
what are assignments - Answers transfer of contractual rights to a third party (occurs after original
contract)
what are the parts of an assignment - Answers Bilateral contract → two parties have corresponding
rights and duties, the obligee has a right to require the other to perform some task and the obligor
has a duty to perform it
The party assigning the rights to a third party is the assignor
The party receiving the right is the assignee
what are the exceptions for an assignment - Answers Assignment is prohibited by statute
The contract is for personal services (ex. tutoring)
The assignment significantly changes the risk or duties of the obligor
The contracts prohibits assignment
what is a delegation - Answers transfer of a contractual duties to a third party (occurs after original
contract)
who is a or and ee for a delegation - Answers Party delegating the duties is the delegator
, Party to whom the duties are delegated is the delegatee
what is circumstances are a delegation prohibited - Answers When special trust has been placed in
the obligor
When performance depends on the personal skills or talents of the obligor
When performed by a third party will vary materially from that expected by the obligee
When the contract expressly prohibits delegate
what is a third party - Answers Third party → the for whose benefit a promise is made in a contract
but who is not a party to the contract
what is an intended beneficiary and wha goes under it - Answers Intended beneficiary → the third
party has legal rights and can sue the promisor directly for breach of the contract
-- An incidental beneficiary is a third person who receives a benefit from a contract even though that
person's benefit is not the reason the contract was made
what is a way to discharge or terminate contractural duties by the performance of those duties -
Answers Discharge → The termination of an obligation. In contract law, discharge occurs when the
parties have fully performed their contractual obligations or when events, conduct of the parties, or
operation of law releases the parties from performance. In bankruptcy proceedings, the extinction of
the debtor's dischargeable debts. The termination of an obligation.
Performance → In contract law, the fulfillment of one's duties arising under a contract with another;
the normal way of discharging one's contractual obligations.
The duty to perform under any contract may be conditioned on the occurrence or nonoccurrence of a
certain event, or the duty may be absolute
what are the two conditions of a performance - Answers Condition → a qualification in a contract
based on possible future event, the occurrence or nonoccurrence of the event will trigger the
performance of a legal obligation or terminate an existing obligation
Condition precedent → in contractual agreement, a condition that must be met before a party's
promise becomes absolute
what is discharge by performance? - Answers Tender → an unconditional offer to perform by a
person who is ready, willing, and able to do so
what are the two types of performance - Answers Complete performance
Substantial performance
what is complete performance - Answers when a party performs exactly as greed, there is no
question as to whether the contract has been performed or is perfect it is said to be complete
what is a substantial performance - Answers a party who in good faith performs substantially all of
the terms of a contract can enforce the contract against the other party under the doctrine of
substantial performance, has basic requirements...
The party must have performed in good faith. Intentional failure to comply with the contract terms is
a breach of the contract.
The performance must not vary greatly from the performance promised in the contract. An omission,
variance, or defect in performance is considered minor if it can easily be remedied by compensation
(monetary damages).
The performance must create substantially the same benefits as those promised in the contract.
what effects the duty to perform - Answers If performance is substantial, the other party's duty to
perform remains absolute (except that the party can sue for damages due to the minor deviations). In
other words, the parties must continue performing under the contract (for instance, making payment
to the party who substantially performed). If performance is not substantial, there is a material
breach, and the nonbreaching party is excused from further performance.
what is the measure of damages - Answers because substantial performance is not perfect, the other
party is entitled to damages
Measure of damages is the cost to bring the object of the contract into compliance with its terms, if
that cost is unreasonable under the circumstances
If the cost is unreasonable, the measure of damages is the difference in value between the
performance that was rendered and the performance that would have been rendered if the contract
had been performed completely.
what is the performance to the satisfaction of another - Answers when the subject matter of the
contract is personal, the obligation is conditional, and performance must actually satisfy the party in
the specified contract
