NPPE Contract Law Fundamentals 4

Question 1

An architect discovers that a subcontractor's bid was based on a clerical error that significantly understated the cost. Under contract law, the subcontractor may seek relief under the doctrine of:

Accepted Answer

Unilateral mistake

Answer

Unilateral mistake allows a party to void a contract when a clerical or computational error was made and the other party knew or should have known of the error.

Question 2

A construction contract includes a 'time is of the essence' clause. The contractor finishes 10 days late due to unforeseen labor shortages. The owner may:

Accepted Answer

Terminate the contract and sue for all consequential losses

Answer

When a 'time is of the essence' clause is present, timely performance is a material condition, and breach allows the non-breaching party to terminate and claim damages.

Question 3

Which legal doctrine allows a court to rewrite an ambiguous contract term to reflect the parties' original intent?

Accepted Answer

Rectification

Answer

Rectification is an equitable remedy that allows a court to correct a written contract that does not accurately reflect the parties' true agreement.

Question 4

Under the parol evidence rule, which of the following evidence is generally ADMISSIBLE to interpret a fully integrated written contract?

Accepted Answer

Evidence of a trade custom relevant to an ambiguous term

Answer

Trade usage and custom are admissible to explain or supplement ambiguous terms in an integrated contract even under the parol evidence rule.

Question 5

A professional services contract is frustrated when the client's building, the sole purpose of the engagement, burns down before work begins. The most likely outcome is:

Accepted Answer

Both parties are discharged from future obligations

Answer

Under the doctrine of frustration, when an unforeseen event destroys the contract's essential purpose, both parties are excused from future performance.

NPPE - National Professional Practice Examination Practice Test

NPPE - National Professional Practice Examination Practice Test

NPPE Contract Law Fundamentals 4