NCBE CONTRACTS QUESTIONS WITH 100%
ACCURATE ANSWERS
A general contractor about to bid on a construction job for an office building invited a carpenter and
several others to bid on the carpentry work. The carpenter agreed to bid if the general contractor would
agree to give the carpenter the job provided that his bid was lowest and the general contractor was
awarded the main contract. The general contractor so agreed. The carpenter, incurring time and
expense in preparing his bid, submitted the lowest carpentry bid. The general contractor used the
carpenter's bid in calculating its own bid, which was successful.
Which of the following best supports the carpenter's position that the general contractor is obligated to
award the carpentry subcontract to the carpenter? - Accurate answers The carpenter gave
consideration for the general contractor's conditional promise to award the carpentry subcontract to
the carpenter.
- The carpenter's bid was consideration for the general contractor's promise to award the carpentry
subcontract to the carpenter if his bid was the lowest and the general contractor was awarded the main
contract. Thus, the general contractor and the carpenter formed a contract.
- The carpenter's bid was bargained for and was a benefit to the general contractor, so it constitutes
consideration sufficient to support the general contractor's conditional promise to award the
subcontract to the carpenter. Conditional promises are enforceable, but the duty to perform does not
become absolute until the condition has been met or is legally excused. The conditions in this contract
were met-the carpenter's bid was the lowest and the general contractor was awarded the main
contract. Thus, the general contractor is under a duty to perform his promise to award the subcontract
to the carpenter.
A homeowner and a contractor entered into a contract under which the homeowner agreed to pay the
contractor $50,000 for remodeling the homeowner's basement according to a set of plans.
After the work was completed, the homeowner honestly believed that there were defects in the
contractor's work as well as departures from the plans. In fact, the contractor had fully performed. The
homeowner offered to pay the contractor $35,000 in full settlement in exchange for the contractor's
promise to surrender his entire claim. The contractor accepted the homeowner's offer, and the
homeowner paid the contractor $35,000. The reasonable value of the work was $35,000.
Is the contractor likely to succeed in an action challenging the validity of the settlement agreement? -
Accurate answers No, because the homeowner honestly disputed the amount he owed the
contractor.
- The homeowner's promise to surrender his claim against the contractor was sufficient consideration
for a modification of the contract price. A common law contract (such as the one here - for services) can
be modified if the modification is supported by new consideration. The promise to refrain from suing on
a claim may constitute consideration. Even if the claim is invalid, in law or in fact, if the claimant
reasonably and in good faith believes his claim to be valid, forbearance of the legal right to have the
claim adjudicated constitutes a detriment and consideration. Here, the homeowner honestly believed
that there were defects in the contractor's work and departures from the plans. Even though the
homeowner's belief is incorrect, and thus he is unlikely to win a suit against the contractor, this belief is
, in good faith, so a surrender of his right to sue on the claim constitutes valid consideration sufficient to
modify the contract price.
An engineer signed a two-year contract to serve as the chief safety engineer for a coal mine at a salary
of $7,000 per month. The position required the engineer to work underground each workday. After one
week on the job, the engineer became very ill. He requested testing of the mine air system, which
revealed the presence of a chemical agent to which the engineer had a rare allergic reaction. The
engineer promptly quit. The coal mine then hired a qualified replacement for the remainder of the
engineer's contract at a salary of $7,500 per month.
Assume that no statute or regulation applies.
If the coal mine sues the engineer for breach of contract, is the coal mine likely to recover damages? -
Accurate answers No, because the risk to the engineer's health excused his nonperformance of the
contract.
- The occurrence of an unanticipated or extraordinary event may make contractual duties impossible or
impracticable to perform. Where the nonoccurrence of the event was a basic assumption of the parties
in making the contract and neither party has expressly or impliedly assumed the risk of the event
occurring, contractual duties may be discharged. The test for a finding of impracticability is that the
party to perform has encountered: (i) extreme and unreasonable difficulty and/or expense; and (ii) its
nonoccurrence was a basic assumption of the parties. The engineer's rare allergic reaction to a chemical
found in the mine air system was unanticipated by the parties. The engineer cannot perform his job
anywhere but inside the coal mine but it is unreasonable for the engineer to risk his health, and possibly
his life, to fulfill his duties under the contract. Due to this unanticipated and rare circumstance, his
employment under the contract will be discharged.
- It does not matter that the mine was reasonably safe for most people; the test for impracticability is a
subjective one. The engineer could not perform under the contract without risking illness and possibly
death due to his unusual and unanticipated allergy. Thus his performance under the contract will be
discharged due to impracticability.
An elderly woman underwent major surgery and spent two weeks in the hospital. The woman continued
to take powerful pain medication for several weeks after she returned home. During her recovery, she
offered to sell her car for $450 to her neighbor, who owned a house-cleaning service. The neighbor said,
"That's great! I need a car to transport all the people who work for me to their job sites."
In fact, the woman's car was worth $3,000, and the neighbor knew this. He was also aware that the
woman had undergone surgery and noted that she seemed "out of it" because of the medication she
was taking.
Several days later, the woman's son found out about the deal and contacted the neighbor, telling him
that the woman would sell him the car, but for $3,450. The next day, when the neighbor tendered $450
and demanded that the woman give him the car, she refused.
If the neighbor sues the woman for breach of contract, will he be - Accurate answers No, because
the contract was voidable due to the woman's apparent incapacity.
- For a contract to be enforceable, both parties must have had capacity to enter into a contract. One
who is so intoxicated by drugs or alcohol that she does not understand the nature and significance of
her promise may be held to have made only a voidable promise if the other party had reason to know of
the intoxication. Here, the woman was under the influence of powerful pain medication at the time she
made the offer to sell her car to the neighbor. The neighbor was aware of her incapacity, noting that she
ACCURATE ANSWERS
A general contractor about to bid on a construction job for an office building invited a carpenter and
several others to bid on the carpentry work. The carpenter agreed to bid if the general contractor would
agree to give the carpenter the job provided that his bid was lowest and the general contractor was
awarded the main contract. The general contractor so agreed. The carpenter, incurring time and
expense in preparing his bid, submitted the lowest carpentry bid. The general contractor used the
carpenter's bid in calculating its own bid, which was successful.
Which of the following best supports the carpenter's position that the general contractor is obligated to
award the carpentry subcontract to the carpenter? - Accurate answers The carpenter gave
consideration for the general contractor's conditional promise to award the carpentry subcontract to
the carpenter.
- The carpenter's bid was consideration for the general contractor's promise to award the carpentry
subcontract to the carpenter if his bid was the lowest and the general contractor was awarded the main
contract. Thus, the general contractor and the carpenter formed a contract.
- The carpenter's bid was bargained for and was a benefit to the general contractor, so it constitutes
consideration sufficient to support the general contractor's conditional promise to award the
subcontract to the carpenter. Conditional promises are enforceable, but the duty to perform does not
become absolute until the condition has been met or is legally excused. The conditions in this contract
were met-the carpenter's bid was the lowest and the general contractor was awarded the main
contract. Thus, the general contractor is under a duty to perform his promise to award the subcontract
to the carpenter.
A homeowner and a contractor entered into a contract under which the homeowner agreed to pay the
contractor $50,000 for remodeling the homeowner's basement according to a set of plans.
After the work was completed, the homeowner honestly believed that there were defects in the
contractor's work as well as departures from the plans. In fact, the contractor had fully performed. The
homeowner offered to pay the contractor $35,000 in full settlement in exchange for the contractor's
promise to surrender his entire claim. The contractor accepted the homeowner's offer, and the
homeowner paid the contractor $35,000. The reasonable value of the work was $35,000.
Is the contractor likely to succeed in an action challenging the validity of the settlement agreement? -
Accurate answers No, because the homeowner honestly disputed the amount he owed the
contractor.
- The homeowner's promise to surrender his claim against the contractor was sufficient consideration
for a modification of the contract price. A common law contract (such as the one here - for services) can
be modified if the modification is supported by new consideration. The promise to refrain from suing on
a claim may constitute consideration. Even if the claim is invalid, in law or in fact, if the claimant
reasonably and in good faith believes his claim to be valid, forbearance of the legal right to have the
claim adjudicated constitutes a detriment and consideration. Here, the homeowner honestly believed
that there were defects in the contractor's work and departures from the plans. Even though the
homeowner's belief is incorrect, and thus he is unlikely to win a suit against the contractor, this belief is
, in good faith, so a surrender of his right to sue on the claim constitutes valid consideration sufficient to
modify the contract price.
An engineer signed a two-year contract to serve as the chief safety engineer for a coal mine at a salary
of $7,000 per month. The position required the engineer to work underground each workday. After one
week on the job, the engineer became very ill. He requested testing of the mine air system, which
revealed the presence of a chemical agent to which the engineer had a rare allergic reaction. The
engineer promptly quit. The coal mine then hired a qualified replacement for the remainder of the
engineer's contract at a salary of $7,500 per month.
Assume that no statute or regulation applies.
If the coal mine sues the engineer for breach of contract, is the coal mine likely to recover damages? -
Accurate answers No, because the risk to the engineer's health excused his nonperformance of the
contract.
- The occurrence of an unanticipated or extraordinary event may make contractual duties impossible or
impracticable to perform. Where the nonoccurrence of the event was a basic assumption of the parties
in making the contract and neither party has expressly or impliedly assumed the risk of the event
occurring, contractual duties may be discharged. The test for a finding of impracticability is that the
party to perform has encountered: (i) extreme and unreasonable difficulty and/or expense; and (ii) its
nonoccurrence was a basic assumption of the parties. The engineer's rare allergic reaction to a chemical
found in the mine air system was unanticipated by the parties. The engineer cannot perform his job
anywhere but inside the coal mine but it is unreasonable for the engineer to risk his health, and possibly
his life, to fulfill his duties under the contract. Due to this unanticipated and rare circumstance, his
employment under the contract will be discharged.
- It does not matter that the mine was reasonably safe for most people; the test for impracticability is a
subjective one. The engineer could not perform under the contract without risking illness and possibly
death due to his unusual and unanticipated allergy. Thus his performance under the contract will be
discharged due to impracticability.
An elderly woman underwent major surgery and spent two weeks in the hospital. The woman continued
to take powerful pain medication for several weeks after she returned home. During her recovery, she
offered to sell her car for $450 to her neighbor, who owned a house-cleaning service. The neighbor said,
"That's great! I need a car to transport all the people who work for me to their job sites."
In fact, the woman's car was worth $3,000, and the neighbor knew this. He was also aware that the
woman had undergone surgery and noted that she seemed "out of it" because of the medication she
was taking.
Several days later, the woman's son found out about the deal and contacted the neighbor, telling him
that the woman would sell him the car, but for $3,450. The next day, when the neighbor tendered $450
and demanded that the woman give him the car, she refused.
If the neighbor sues the woman for breach of contract, will he be - Accurate answers No, because
the contract was voidable due to the woman's apparent incapacity.
- For a contract to be enforceable, both parties must have had capacity to enter into a contract. One
who is so intoxicated by drugs or alcohol that she does not understand the nature and significance of
her promise may be held to have made only a voidable promise if the other party had reason to know of
the intoxication. Here, the woman was under the influence of powerful pain medication at the time she
made the offer to sell her car to the neighbor. The neighbor was aware of her incapacity, noting that she
