- Is the gallery owner's refusal to deliver the painting a breach of contract? Select one.
Answer: No, because the collector's tender of payment and the gallery's tender of delivery are concurrent conditions.
The correct answer is (D). In a bilateral contract where performances can be rendered simultaneously, the law implies that each party's performance is a constructive condition concurrent to the other's. The gallery's duty to tender the painting is conditioned on the collector's tender of the final payment, and vice versa. Since the collector has not tendered the remaining $20,000, the gallery's duty to deliver has not been triggered. (A) is incorrect because in such contracts, promises are not independent; they are linked by constructive conditions. (B) is incorrect because the gallery's duty to deliver is not absolute; it is conditioned on payment. (C) is incorrect because the condition is not express (stated in the contract) but rather constructive (implied by law).
- If the CEO sues to compel the grant of the stock options, what is the company's strongest defense? Select one.
Answer: The vesting of the stock options was subject to an express condition precedent that was not strictly satisfied.
This question tests your understanding of conditions in contract law, specifically the distinction between conditions precedent and other contractual concepts. When you see precise conditional language like "if, and only if," focus on whether the condition was strictly met.
The company's strongest defense is that the vesting was subject to an express condition precedent that wasn't satisfied. The contract clearly stated the options would vest "if, and only if" the company secured "at least $10 million" in funding. Since only $8 million was raised, this condition wasn't met. Conditions precedent are interpreted strictly—substantial compliance typically isn't enough. The CEO has no legal right to the stock options because the triggering event never occurred.
Let's examine why the other answers fail. Option B incorrectly applies substantial performance doctrine, which generally applies to performance of contractual duties, not satisfaction of conditions precedent. The $8 million vs. $10 million shortfall is also significant (20%), making substantial performance arguments weaker. Option C mischaracterizes the CEO's role—securing funding likely wasn't a guaranteed duty but rather a conditional trigger for additional compensation. The CEO fulfilled her employment obligations by working diligently. Option D wrongly suggests the promise was illusory. While the funding condition was outside the CEO's direct control, this doesn't make the promise illusory—it makes it conditional. The company gave valid consideration through the base salary and genuine commitment to grant options if the condition was met.
Remember: When contracts use precise conditional language with specific thresholds, courts typically require strict compliance. "Close enough" rarely works with express conditions precedent.
- If the contractor sues the homeowner for the final payment, what is the most likely outcome? Select one.
Answer: The contractor will recover $9,800 because the condition will be excused to avoid a disproportionate forfeiture, offset by the cost to cure the defect.
The correct answer is (C). The clause creates an express condition of personal satisfaction involving a third party (the architect). While express conditions must generally be strictly satisfied, courts may excuse the condition to avoid a disproportionate forfeiture if the failure is minor. Here, withholding a $10,000 payment for a $200 defect would be a disproportionate forfeiture. Therefore, a court is likely to excuse the condition and award the contractor the payment, less the amount required to correct the defect ($10,000 - $200 = $9,800). (A) is incorrect because courts can excuse express conditions to avoid forfeiture. (B) is incorrect because substantial performance is the standard for constructive conditions, not express conditions, and it would not account for the minor defect. (D) is incorrect because while the architect's satisfaction is the condition, the key legal doctrine is the avoidance of disproportionate forfeiture, and the homeowner is entitled to an offset for the defect.
- Is the shipping company's refusal to perform justified? Select one.
Answer: No, because the provision of the list was a promise, and the two-day delay was not a material breach.
When you encounter contract disputes involving missed deadlines, you need to distinguish between promises and conditions. This distinction determines whether a breach excuses the other party's performance or simply creates a right to damages.
The manufacturer's obligation to provide the certified list "no later than November 1" is phrased as a contractual promise, not an express condition precedent to the shipper's duty. When a party breaches a promise, the non-breaching party can only refuse to perform if the breach is material—meaning it goes to the essence of the contract or substantially defeats its purpose. Here, a two-day delay in providing a customs list doesn't materially impair the shipping company's ability to transport toys for the holiday season, especially since the delivery date was November 15.
Answer A correctly identifies this as a non-material breach of a promise, meaning the shipping company must still perform but can seek damages for any harm caused by the delay.
Answer B is wrong because anticipatory repudiation requires clear indication that a party will not perform at all—a minor delay doesn't constitute repudiation.
Answer C incorrectly characterizes the list provision as an express condition precedent. Conditions typically use language like "provided that," "on condition that," or "if." This clause simply states when the manufacturer "will" provide the list.
Answer D misapplies waiver doctrine—waiver requires knowledge of the breach and conduct indicating acceptance. The shipping company couldn't object on November 2 without knowing whether the list would arrive that day.
Study tip: Look for conditional language ("if," "provided that") versus promissory language ("will," "shall") to distinguish conditions from promises in contract disputes.
- In a breach of contract action by the professor against the university, which of the following is the university's weakest argument? Select one.
Answer: Securing housing by August 1 was an express condition precedent to the university's duty to employ the professor.
The correct answer is (B). Courts interpret contract language to avoid forfeiture and will not construe a term as a condition unless the language is clear and unambiguous. The phrase "professor promises to secure housing" is the language of a promise, not a condition. Language like "on condition that" or "if" would be needed to create an express condition. Therefore, arguing it was an express condition is the university's weakest position. (A) and (D) are related and more plausible arguments, though likely to fail; the university would argue the promise was breached and that the breach was material, discharging its duties. This requires a factual determination of materiality, which is arguable. (C) is also a weak argument but more plausible than (B), as the university might try to frame the professor's difficulties as an indication she would not be able to perform her teaching duties, although this is a stretch based on the facts.
- If the owner sues the purchaser for breach of contract, what is the likely outcome? Select one.
Answer: The owner will win because the purchaser had an implied duty of good faith and fair dealing in assessing the veterinarian's report.
The correct answer is (B). This is a condition of satisfaction, but it is based on a third party's (the veterinarian's) report and relates to a technical matter (fitness for racing). Courts will apply an objective standard. Even if a subjective standard were applied, the purchaser has a duty of good faith in making the determination. The veterinarian's report indicated the horse was fit for racing despite a minor issue. Using this report to terminate the contract, especially when motivated by finding a preferred horse, is likely a breach of the implied duty of good faith. A court would likely find that the condition was satisfied and the purchaser's termination was a breach. (A) is a conclusion that follows from (B). (B) provides the better legal reasoning. (C) is incorrect because "fit for racing" does not mean "in perfect health," and the report confirmed fitness. (D) is incorrect because discretion is limited by the duty of good faith.
- In most modern jurisdictions, if the owner sues the insurance company, what is the likely outcome? Select one.
Answer: The owner will win because the notice condition will be excused since the insurer was not prejudiced by the delay.
The correct answer is (C). While notice provisions in insurance contracts are generally treated as express conditions, most modern jurisdictions have adopted a rule that excuses the failure of the condition unless the insurer was prejudiced by the delay. Since the facts state the insurer was not prejudiced, a court is likely to excuse the condition and allow the claim. (A) reflects the traditional, strict rule that is less followed today, especially in the insurance context. (B) is incorrect because the provision functions as a condition to recovery, not a promise for which the insurer could sue for damages. (D) is incorrect because impossibility typically applies to the performance of promises, not the satisfaction of conditions, and a more specific legal rule applies here.
- If the farmer sues the tenant for the unpaid rent from the last six months of the lease, what is the tenant's best defense? Select one.
Answer: The rezoning was a condition subsequent that terminated the tenant's obligation to pay rent.
The correct answer is (B). The clause in the lease created a condition subsequent. A condition subsequent is an event that, if it occurs, extinguishes a duty of performance that has already arisen. Here, the tenant's duty to pay rent existed from the start of the lease, but the rezoning by the county terminated that duty. (A) is incorrect because while the facts might also support a frustration of purpose defense, the contract explicitly provides for this contingency with a condition subsequent, which is a more direct and stronger defense. (C) is incorrect because a condition precedent is an event that must occur before a duty arises. Here, the duty to pay rent already existed. (D) is incorrect because the farmer did not make such a promise; instead, the parties allocated the risk of rezoning through a condition.
- What is the likely outcome of the manufacturer's lawsuit? Select one.
Answer: The manufacturer will win because the company's refusal to allow the test excused the condition.
The correct answer is (B). The contract contained an express condition precedent: the machine passing the test. However, a party cannot rely on the non-occurrence of a condition if that party wrongfully prevented the condition from occurring. The company had an implied duty of good faith and fair dealing to cooperate by allowing the test. By refusing to allow the test, the company prevented the condition from occurring, which excuses the condition. The company's duty to accept and pay becomes absolute, and it is in breach. (A) is incorrect because the condition is excused. (C) is a question of remedies, not liability; the manufacturer is likely entitled to the price because the custom goods are not easily resalable, but the primary reason for liability is the excuse of the condition. (D) is less accurate; the clause is a condition, but the company's duty to cooperate is implied. The breach is the repudiation and failure to pay after the condition was excused.
- What is the most likely legal interpretation of the payment clause? Select one.
Answer: It is a provision that postpones the time for payment for a reasonable period, but it is not a condition that shifts the risk of the owner's nonpayment.
The correct answer is (C). Most courts interpret such "pay-when-paid" clauses not as conditions precedent that shift the risk of owner insolvency to the subcontractor, but as timing mechanisms that merely postpone the contractor's duty to pay for a reasonable time. This interpretation avoids the forfeiture that would result if the clause were read as a condition. To create a true condition precedent (a "pay-if-paid" clause), the language must be explicit and unambiguous that the subcontractor bears the risk of owner nonpayment. (A) is the interpretation contractors argue for but courts usually reject. (B) is too simplistic; the reference is not irrelevant, it sets the timing. (D) is incorrect; this is not a penalty clause.
- If the author sues the publisher for breach of contract, is she likely to succeed? Select one.
Answer: Yes, because the publisher's statement constituted an estoppel waiver of the condition.
The correct answer is (C). The publisher's statement, "don't worry about it," indicated an intent to disregard the condition of the December 31 deadline. The author relied on this statement by continuing her work and submitting the manuscript on January 14. This creates an estoppel waiver. A party may retract a waiver of a condition before the other party has detrimentally relied on it, but here, the author's reliance prevents the publisher from retracting the waiver and reasserting the original deadline. (A) is incorrect because a condition can be waived without a formal modification. (B) is incorrect because a waiver of a condition that is not a material part of the agreed exchange does not require consideration. Estoppel waiver specifically relies on reliance, not consideration. (D) is incorrect because the delivery date was an express condition, not merely a promise, so the concept of material breach is inapplicable to its failure.
- Which statement best describes the legal significance of the two clauses? Select one.
Answer: Securing shelf space was a promise by the agent, while receiving a gold medal was a condition to the winery's duty to pay the bonus.
The correct answer is (A). The language "The agent's duties include securing shelf space" clearly defines a performance obligation of the agent, making it a promise. A failure to perform this duty would be a breach. In contrast, the language "bonus payment if the new wine line receives a 'gold medal' rating" makes the rating an event that must occur before the winery's duty to pay the bonus arises. This is a condition, as the agent does not promise to win the medal, but the bonus is contingent upon it. (B), (C), and (D) incorrectly classify one or both of the clauses.
- Which of the following provides the landowner with the best argument to enforce the contract? Select one.
Answer: The permitting deadline was merely a target date, and because the condition was met before closing, the developer's duty to purchase became absolute.
The correct answer is (D). While the clause is a condition precedent, courts analyze the purpose of such conditions. Here, the purpose was to ensure the developer could build its project before being obligated to close on the purchase. Since the permits were obtained before the June 1 closing date, the purpose of the condition was fulfilled. Courts will often interpret such date-specific conditions as setting a target, and as long as the condition is met within a reasonable time before the ultimate performance (closing) is due, the duty to perform is not discharged. (A) is incorrect; the language "subject to" clearly creates a condition. (B) is incorrect; while the developer had a duty of good faith, satisfying that duty does not excuse the non-occurrence of the condition itself. (C) is incorrect because substantial performance does not apply to express conditions like this one.
- What is the client's best defense against the software company's attempt to terminate the agreement? Select one.
Answer: The software company, by its conduct, has waived its right to insist on strict compliance with the condition.
The correct answer is (B). Even though the contract labels the reporting requirement a "condition," a party whose duty is conditional can waive the condition by accepting the other party's defective performance. By repeatedly accepting late reports without objection, the software company has likely waived the benefit of the condition of timely submission for past and, arguably, future reports unless it retracts the waiver by giving reasonable notice. (A) is incorrect because the contract explicitly calls the requirement a "condition," making it difficult to argue it was merely a promise. (C) is incorrect because while "time is of the essence" language creates a condition, its absence doesn't prevent other language from doing so. (D) is a plausible but weaker argument; waiver is the more specific and direct defense based on these facts.
- If the seller sues the buyer for breach of contract, what is the seller's best argument? Select one.
Answer: The buyer wrongfully prevented the occurrence of the condition, thereby excusing the condition.
The correct answer is (C). This clause is a promissory condition. While obtaining the variance is a condition to the buyer's duty to close, the buyer also promised to use best efforts to bring about the condition. By submitting a deficient application and failing to pursue it further, the buyer breached the promise of best efforts. A party who wrongfully hinders or prevents a condition from occurring cannot rely on its non-occurrence as a defense. Thus, the condition is excused, and the buyer's duty to perform (i.e., purchase the property) becomes absolute. (A) is incorrect because the failure to obtain the variance itself is not the breach; the breach is the failure to use best efforts. (B) is incorrect as the contract explicitly states the sale is contingent on the variance. (D) is incorrect because submitting a deficient application is evidence of a breach of the duty of good faith, not a waiver of the condition.
- What is the company's best argument for its refusal to pay? Select one.
Answer: The planner's failure to secure a national expert was a material breach of a promise, discharging the company's duty to pay.
The correct answer is (B). The clause uses the word "promises," indicating it is a promise, not a condition. The key question is whether the breach was material. The company's best argument is that securing a nationally recognized expert was a central part of the bargain, and the failure to do so was a material breach that discharged the company's duty to pay the full price. (Note: The planner would have a counterargument that the company waived the breach by proceeding with the conference, entitling the planner to a quantum meruit recovery). (A) is incorrect because the language is of promise, not condition. (C) is incorrect because there was no repudiation before performance was due; there was simply defective performance. (D) is not supported by the facts.
- If the marketing firm sues the corporation for payment, is the firm likely to prevail? Select one.
Answer: No, because the contract created a condition of personal satisfaction involving aesthetics, which was not met.
When you encounter contracts with satisfaction clauses, you need to distinguish between objective and subjective standards. Courts apply different tests depending on whether the contract involves matters of personal taste or commercial/mechanical performance.
This contract creates a subjective satisfaction condition involving aesthetic judgment—the CEO's personal approval of logo designs. When contracts involve matters of taste, personal preference, or artistic judgment, courts apply a subjective standard requiring only that the party's dissatisfaction be genuine and in good faith. Since the CEO acted in good faith and simply didn't like the designs aesthetically, the condition wasn't satisfied, and the corporation has no obligation to pay.
Answer A is wrong because it applies an objective "reasonable person" standard, which courts use only for commercial or mechanical satisfaction clauses, not aesthetic ones. The fact that a reasonable person might find the designs satisfactory is irrelevant when the contract specifically requires the CEO's personal approval.
Answer B incorrectly relies on substantial performance doctrine. While the firm may have performed competently, substantial performance doesn't excuse the failure to meet an express condition precedent. The payment obligation never arose because the condition wasn't satisfied.
Answer C mischaracterizes the legal situation. The CEO's rejection wasn't a breach—it was the non-occurrence of a condition precedent that prevented the corporation's payment obligation from arising in the first place.
Remember: satisfaction clauses involving personal taste or aesthetics are judged subjectively (good faith only), while those involving commercial utility or mechanical fitness are judged objectively (reasonableness standard).
- If the firm sues for the bonus, what is the likely result? Select one.
Answer: The firm will lose because the 15% profit increase was an express condition for the bonus that did not occur.
This question tests your understanding of the crucial distinction between conditions and promises in contract law. When you see specific performance metrics tied to payment, analyze whether they're conditions that must be met or promises that can be substantially performed.
The contract language "provided that the client's quarterly profits increase by at least 15%" creates an express condition precedent to the firm's right to receive the bonus. This isn't a promise the firm made—it's a specific requirement that must be satisfied before any bonus obligation arises. Since profits only increased 12%, the condition failed, and no bonus is owed. Answer D correctly identifies this as an unmet express condition.
A is wrong because substantial performance applies to promises, not conditions. While the firm performed its consulting duties well, the 15% increase wasn't part of those duties—it was a condition for bonus payment.
B incorrectly focuses on causation. Even if the firm's services caused the 12% increase, that's irrelevant when the contract requires 15%. Conditions must be strictly satisfied, regardless of causation.
C mischaracterizes the situation as a breach. The firm didn't promise to achieve 15% growth; that would be impossible since many factors beyond consulting affect profits. The 15% figure is a condition, not a breached promise.
Study tip: Watch for "provided that," "if," "when," or "unless" language—these typically signal conditions rather than promises. Conditions require strict compliance, while promises may be substantially performed. This distinction frequently appears on contract law questions.
- If the playwright sues the theater for breach of contract, is she likely to succeed? Select one.
Answer: Yes, because the theater's actions prevented the occurrence of the condition, thereby excusing it.
This question tests the doctrine of prevention of conditions in contract law. When a contract contains a condition precedent, one party cannot prevent that condition from occurring and then claim the condition wasn't met to avoid their obligations.
The correct answer is A because the theater actively prevented the artistic director from reading and evaluating the play. By ordering the director not to consider the play due to their change in artistic vision, the theater prevented the very condition they later claimed wasn't satisfied. Under contract law, when a party prevents a condition from occurring, that condition is legally excused, and the contract becomes enforceable as if the condition were met.
Answer B is wrong because while the director may have subjective discretion, the theater never allowed him to exercise that discretion. The issue isn't the nature of his approval power, but that he was prevented from using it at all.
Answer C misses the key legal principle. Although the director's approval was indeed an express condition precedent that didn't technically occur, the theater's prevention of this condition excuses it under the prevention doctrine.
Answer D incorrectly characterizes the contract structure. The agreement clearly made the theater's duty to produce the play conditional on the director's approval—it wasn't an independent promise.
Remember this pattern: whenever you see a fact pattern where one party blocks a condition from being tested or fulfilled, look for prevention of condition as the likely legal theory. The prevented party can't benefit from their own interference.
- The technology firm has threatened to sue for the final payment. What is your client's strongest legal position for withholding payment? Select one.
Answer: The provision of the certified report is an express condition precedent to the hotel's duty to make the final payment.
The correct answer is (C). The contract language "within 10 days after the firm provides a certified report" clearly makes the provision of the report an event that must occur before the hotel's duty to pay arises. This is the classic structure of an express condition precedent. The hotel's duty to pay has not yet been triggered. (A) is incorrect because the clause is phrased as a condition to payment, not a promise by the firm to provide a report by a certain date. The firm's duty is to install the system; the report is the trigger for payment. (B) is incorrect because the failure of a condition is not a breach. The firm has not breached; rather, it has failed to satisfy the condition for payment. (D) is incorrect because the failure of a condition does not make the contract voidable; it simply suspends or excuses the conditioned performance.
