ND Bar Contracts and Commercial Law 3

Question 1

Which of the following contracts is within the Statute of Frauds and must be in writing to be enforceable?

Accepted Answer

A contract that cannot be performed within one year from the date of its making

Answer

Contracts that by their terms cannot be completed within one year of formation fall within the common law Statute of Frauds and require a signed writing.

Question 2

When a contract is rescinded by mutual agreement, the legal effect is:

Accepted Answer

Both parties are excused from future performance and the contract is treated as if it never existed

Answer

Mutual rescission extinguishes all remaining duties under the original contract, effectively returning both parties to their pre-contract positions.

Question 3

Under the doctrine of substantial performance, a party who substantially but not perfectly performs a contract is entitled to:

Accepted Answer

The contract price minus the cost to remedy the deficiencies

Answer

Substantial performance entitles the performing party to the contract price less the cost of remedying any defects, preventing forfeiture for minor deviations.

Question 4

A third-party beneficiary who has vested rights under a contract may:

Accepted Answer

Enforce the contract against the promisor

Answer

An intended third-party beneficiary whose rights have vested acquires the right to enforce the contract directly against the promisor.

Question 5

Which of the following best describes a liquidated damages clause?

Accepted Answer

A pre-agreed sum payable upon breach when actual damages would be difficult to calculate

Answer

A valid liquidated damages clause fixes a reasonable pre-estimated sum for breach and is enforceable when actual damages are uncertain and the amount is not a penalty.

(ND Bar) North Dakota Bar Exam Practice Test

(ND Bar) North Dakota Bar Exam Practice Test

ND Bar Contracts and Commercial Law 3