OMGT 4313 Law and Ethics Quiz 4 (Final)
Office Hospitality Co. contracts to provide Dunkin' Donuts coffee to the all the
breakrooms of Mega Factory for one year. Two months into the contract, Dunkin' Donuts
decides not to supply Office Hospitality Co. Starbucks agrees to supply Office
Hospitality Co. and the breakrooms of Mega Factory have Starbucks coffee, instead of
Dunkin Donuts coffee for the final ten months of the contract. At the end of the year,
Mega Factory refuses to pay Office Hospitality, alleging breach of contract. If Office
Hospitality Co. sues for payment, what is the likely outcome? - ANS-The Court will find
Office Hospitality Co. substantially performed the contract and is entitled to payment.
Party A and Party B enter into a contract. Party B seeks to have Party C take the place
of Party B. All three parties agree to this substitution, agreeing to extinguish the original
contract and create a new contract between Party A and Party C. This is called
____________. - ANS-novation
Under the common law of contracts, a party is entitled to payment if the party
substantially performs the contract. The elements of substantial performance are 1) the
party performed in good faith, 2) the performance must not vary greatly from the
promised performance, and 3) ____________. - ANS-the performance creates
substantially the same benefit as the contractually promised performance
If Party A breaches the contract, Party B may sue for damages. Party B still must
perform any outstanding duties under the contract, unless Party A's breach was
________________, in which case Party B is discharged from performance. -
ANS-material
Which type of contract is formed when the parties exchange promises? - ANS-bilateral
contract
Big Apartment Co. offers to pay Jim $5,000 to paint 10 apartments. Before Jim replies,
a tornado destroys the 10 apartments. The next day, Jim accepts the offer. Was a
contract formed and does Big Apartment Co. owe Jim $5,000? - ANS-No, because
destruction of the subject matter terminated the offer by law
What is the name for a situation where the parties fail to form a contract and have no
contractual legal rights? - ANS-void contract
Office Hospitality Co. contracts to provide Dunkin' Donuts coffee to the all the
breakrooms of Mega Factory for one year. Two months into the contract, Dunkin' Donuts
decides not to supply Office Hospitality Co. Starbucks agrees to supply Office
Hospitality Co. and the breakrooms of Mega Factory have Starbucks coffee, instead of
Dunkin Donuts coffee for the final ten months of the contract. At the end of the year,
Mega Factory refuses to pay Office Hospitality, alleging breach of contract. If Office
Hospitality Co. sues for payment, what is the likely outcome? - ANS-The Court will find
Office Hospitality Co. substantially performed the contract and is entitled to payment.
Party A and Party B enter into a contract. Party B seeks to have Party C take the place
of Party B. All three parties agree to this substitution, agreeing to extinguish the original
contract and create a new contract between Party A and Party C. This is called
____________. - ANS-novation
Under the common law of contracts, a party is entitled to payment if the party
substantially performs the contract. The elements of substantial performance are 1) the
party performed in good faith, 2) the performance must not vary greatly from the
promised performance, and 3) ____________. - ANS-the performance creates
substantially the same benefit as the contractually promised performance
If Party A breaches the contract, Party B may sue for damages. Party B still must
perform any outstanding duties under the contract, unless Party A's breach was
________________, in which case Party B is discharged from performance. -
ANS-material
Which type of contract is formed when the parties exchange promises? - ANS-bilateral
contract
Big Apartment Co. offers to pay Jim $5,000 to paint 10 apartments. Before Jim replies,
a tornado destroys the 10 apartments. The next day, Jim accepts the offer. Was a
contract formed and does Big Apartment Co. owe Jim $5,000? - ANS-No, because
destruction of the subject matter terminated the offer by law
What is the name for a situation where the parties fail to form a contract and have no
contractual legal rights? - ANS-void contract
