Bar Exam (Next Generation) Quiz: Conditions
5 questions · exam conditions
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ConditionsQuestion 1 of 5

Homeowner hired Builder to construct a custom house for $800,000. The contract stated that the final installment of $100,000 was 'due upon completion of the house.' Builder finished the house and Homeowner moved in. Because of a supplier mix-up, Builder installed a standard asphalt shingle roof instead of the specified premium slate roof. The cost to replace the roof with slate is $12,000, and the difference in market value between the two roofs is $8,000. Homeowner refused to pay the final installment until the roof was replaced. Builder sued for the final installment.

Which of the following best states Builder's right?

Builder is entitled to the full final installment because Homeowner's moving in accepted the house and waived all defects.
Builder is entitled to the final installment less damages for the roof substitution because Builder substantially performed the contract.
Builder is not entitled to any final installment because the completion condition was not exactly satisfied.
Builder is entitled to the final installment only after replacing the roof with slate because the contract required a slate roof.
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Bar Exam (Next Generation) Quiz

Bar Exam (Next Generation) Quiz: Conditions

Practice Conditions in Bar Exam (Next Generation) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Conditions, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Next Generation).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Homeowner hired Builder to construct a custom house for $800,000. The contract stated that the final installment of $100,000 was 'due upon completion of the house.' Builder finished the house and Homeowner moved in. Because of a supplier mix-up, Builder installed a standard asphalt shingle roof instead of the specified premium slate roof. The cost to replace the roof with slate is $12,000, and the difference in market value between the two roofs is $8,000. Homeowner refused to pay the final installment until the roof was replaced. Builder sued for the final installment.

Which of the following best states Builder's right?

  1. Builder is entitled to the full final installment because Homeowner's moving in accepted the house and waived all defects.
  2. Builder is entitled to the final installment less damages for the roof substitution because Builder substantially performed the contract. (correct answer)
  3. Builder is not entitled to any final installment because the completion condition was not exactly satisfied.
  4. Builder is entitled to the final installment only after replacing the roof with slate because the contract required a slate roof.
Explanation: Substantial performance of a constructive condition such as completion satisfies the condition even if there are minor, nonmaterial defects; the performing party may recover the contract price minus damages. The roof substitution was a breach but not material because Builder otherwise completed the house. Homeowner's moving in did not waive all defects. Choice A overstates the effect of acceptance. Choice C ignores the substantial-performance doctrine. Choice D incorrectly converts a damages remedy into a condition on payment.

Question 2

Corporation hired Muralist to design and paint a mural in its headquarters lobby. The contract stated: 'Corporation's duty to pay the $75,000 balance is conditioned on the mural's being satisfactory to Corporation in its sole discretion.' Muralist finished the mural. The CEO rejected it, saying the colors were 'not right for our brand.' Muralist sued. At trial, emails showed the CEO had called the mural 'magnificent' and had asked that it be featured in the annual report, and that the CEO decided to reject it only after the board cut the art budget.

Which party prevails?

  1. Corporation, because the contract expressly made its satisfaction a condition and the CEO's stated dissatisfaction is conclusive.
  2. Corporation, because satisfaction with artistic work is judged by the actual, subjective satisfaction of the party to be satisfied.
  3. Muralist, because the CEO's dissatisfaction was not honestly held, and a satisfaction condition is excused when the obligor acts in bad faith. (correct answer)
  4. Muralist, because the reasonable-person standard applies to artistic work and the mural would satisfy a reasonable person.
Explanation: When satisfaction involves personal taste or artistic judgment and the contract uses language such as 'sole discretion,' the standard is subjective good faith: the obligor must actually be dissatisfied. The evidence showed the CEO was honestly satisfied and manufactured dissatisfaction to save money. That bad faith excuses the condition. Choice A ignores the good-faith limitation on satisfaction clauses. Choice B states the subjective standard but is wrong on the facts because the dissatisfaction was not honest. Choice D applies the objective standard, which is not the standard for artistic taste under this clause.

Question 3

Dr. Lane sold her dental practice to Buyer. The agreement stated: 'Buyer will pay Seller $100,000 per year for five years. Seller agrees not to open a competing dental practice within 20 miles during that period.' The agreement did not state that Buyer's payments were conditioned on Seller's compliance with that covenant. Six months after the sale, Seller opened a competing practice 18 miles away, and two of Buyer's patients transferred to Seller. Buyer stopped making payments. Seller sued for the next installment.

Which statement best describes Buyer's obligation?

  1. Buyer's duty to pay is discharged automatically because the noncompete promise was a condition precedent to each installment.
  2. Buyer's duty to pay is discharged only if Seller's breach was material; the noncompete covenant was a promise, not an express condition. (correct answer)
  3. Buyer's duty to pay is discharged because any breach of a covenant in the same contract excuses the other party's remaining duties.
  4. Buyer's duty to pay continues regardless of the breach because the covenant not to compete is separate from the payment obligation.
Explanation: The noncompete clause is a promise, not an express condition precedent; the payment clause did not say payments were conditioned on compliance. A breach of a promise discharges the other party only if the breach is material, not automatically. If Seller's breach was material, Buyer may stop paying; if not, Buyer must continue paying and may recover damages. Choice A incorrectly treats the covenant as an express condition. Choice C overstates the effect of any breach. Choice D ignores the possibility that a material breach can discharge remaining duties.

Question 4

Contractor agreed to renovate three separate office suites in one building for $50,000 per suite, payable 'as each suite is completed.' Contractor completed the first two suites in compliance with the contract. Before completing the third suite, Contractor abandoned the project. Owner refused to pay for any suite. Contractor sued for the first two payments.

Which of the following best states Contractor's right?

  1. Contractor is entitled to no payment because abandoning the project was a material breach of the entire contract.
  2. Contractor is entitled to payment for the first two suites, and Owner may recover damages for failure to complete the third. (correct answer)
  3. Contractor is entitled to payment for all three suites less damages because he substantially performed the contract as a whole.
  4. Contractor is entitled to payment for the first two suites only if the contract expressly made each suite an independent condition.
Explanation: A contract is divisible when performance by each party is divided into corresponding pairs and payment is due for each unit. The per-suite payment term made this contract divisible. Contractor's abandonment affects only the third suite, so he can recover for the first two completed suites and Owner can seek damages for the third. Choice A treats the contract as entire despite the payment structure. Choice C incorrectly allows recovery for the uncompleted third suite. Choice D is wrong because divisibility can be inferred from the parties' payment terms and does not require an express condition.

Question 5

Hazel, a commercial landlord, and Tenco entered into a lease requiring Hazel to construct specified tenant improvements. The lease stated: "Hazel's obligation to construct the improvements is expressly conditioned upon Tenco's delivery to Hazel, no later than March 1, of a certificate of insurance evidencing that Tenco maintains commercial general liability coverage of at least $1 million per occurrence and naming Hazel as an additional insured.” On February 20, Tenco delivered a certificate from its insurer. Because of an insurer processing error, the certificate stated coverage of only $300,000 per occurrence and did not name Hazel as an additional insured, although Tenco's actual policy at all times provided $1 million coverage and named Hazel. Hazel refused to begin construction, and Tenco sued to compel performance.

Should Hazel be compelled to construct?

  1. No, because an express condition must be strictly satisfied, and the certificate Tenco delivered did not comply with the condition even if the actual insurance policy satisfied Tenco's separate coverage obligations. (correct answer)
  2. Yes, because Tenco's actual policy met the lease's insurance requirements, so the condition's substantive purpose was fulfilled despite the clerical defect in the certificate.
  3. No, because the insurance certificate requirement was a covenant rather than a condition, so Hazel's only remedy would be in damages; she could not withhold construction pending compliance.
  4. Yes, because Tenco timely delivered a certificate, and Hazel has not shown any actual prejudice from the certificate's errors, so the condition should be excused to avoid forfeiture.
Explanation: The lease language is an express condition precedent: Hazel's duty to construct arises only upon Tenco's delivery of a certificate evidencing at least $1 million coverage and naming Hazel as an additional insured. Express conditions are normally enforced strictly; substantial compliance or near-performance does not satisfy them. Tenco delivered a certificate showing only $300,000 coverage and omitting Hazel, so the specified condition was not fulfilled. The fact that Tenco's actual policy contained the required terms does not help because the condition required delivery of a conforming certificate, not merely maintenance of insurance. Choice A is correct. Choice B incorrectly applies a purpose-based substantial-compliance approach to an express condition, which courts usually reject absent an exception such as forfeiture or prevention. Choice C misclassifies the requirement: the phrase "conditioned upon" makes it a condition, not a covenant, so Hazel may withhold performance rather than merely seek damages. Choice D misstates the law because nonoccurrence of an express condition is not excused merely because the benefited party suffered no prejudice; waiver would require voluntary intentional relinquishment, not mere absence of harm, and no forfeiture exception applies because Tenco has not conferred the bargained-for benefit on Hazel.