NYLE Contract Law Principles 4 — Questions and Answers
Question 1: Under UCC Article 2, the 'battle of the forms' provision (§2-207) provides that a definite and seasonable expression of acceptance operates as acceptance even if it states additional or different terms, UNLESS:
- The offeree is not a merchant
- Acceptance is expressly conditioned on assent to the new terms (Correct answer)
- The additional terms relate to payment
- The original offer was oral
Correct answer: Acceptance is expressly conditioned on assent to the new terms
Under UCC §2-207(1), acceptance is effective unless it is expressly made conditional on the offeror's assent to the different or additional terms.
Question 2: A third-party beneficiary who has not yet relied on or assented to a contract generally:
- Can immediately sue to enforce the contract
- Cannot sue because they lack privity
- Has vested rights that the contracting parties cannot modify
- Has rights that may be rescinded by the original contracting parties (Correct answer)
Correct answer: Has rights that may be rescinded by the original contracting parties
Until a third-party beneficiary's rights vest (through reliance, assent, or filing suit), the original parties may modify or rescind the contract.
Question 3: Which of the following is true about an assignment of contractual rights in New York?
- Assignment always requires the obligor's written consent
- An assignment of future rights is always void
- An assignee generally takes the rights subject to defenses the obligor had against the assignor (Correct answer)
- Gratuitous assignments are always irrevocable
Correct answer: An assignee generally takes the rights subject to defenses the obligor had against the assignor
An assignee stands in the assignor's shoes; the obligor retains all defenses (e.g., breach, fraud, failure of consideration) it had against the original assignor.
Question 4: Specific performance as a remedy for breach of contract is generally available when:
- The breach was intentional
- The subject matter is unique and money damages are inadequate (Correct answer)
- The plaintiff requests it and the breach caused actual harm
- The contract involved real property only
Correct answer: The subject matter is unique and money damages are inadequate
Specific performance is an equitable remedy granted when the subject matter is unique (e.g., land, rare goods) so that monetary damages cannot fully compensate the plaintiff.
Question 5: Under New York law, the doctrine of impossibility of performance excuses a party's duty when:
- Performance becomes more expensive than anticipated
- The specific subject matter essential to performance is destroyed without the party's fault (Correct answer)
- A party simply changes their mind about the contract's wisdom
- A supervening law makes performance less profitable
Correct answer: The specific subject matter essential to performance is destroyed without the party's fault
Impossibility requires that the specific subject matter necessary for performance be destroyed or become unavailable through no fault of the obligor.
Question 6: A material breach by one party to a contract generally:
- Entitles the non-breaching party to suspend performance and sue for total breach (Correct answer)
- Only allows the non-breaching party to claim nominal damages
- Does not affect the non-breaching party's ongoing duties
- Must be accompanied by the non-breaching party's notice of termination to be actionable
Correct answer: Entitles the non-breaching party to suspend performance and sue for total breach
A material breach discharges the non-breaching party from further performance obligations and gives them the right to treat the contract as totally breached and sue for all damages.
Question 7: Under the doctrine of frustration of purpose, a contract may be discharged when:
- Performance becomes physically impossible
- The principal purpose of the contract is substantially frustrated by an unforeseen event (Correct answer)
- One party simply no longer wants to perform
- The market value of the contract's subject matter drops significantly
Correct answer: The principal purpose of the contract is substantially frustrated by an unforeseen event
Frustration of purpose (Restatement §265) excuses performance when an unforeseen event substantially destroys the value of the contract to the non-breaching party.
NYLE Contract Law Principles 4
Under UCC Article 2, the 'battle of the forms' provision (§2-207) provides that a definite and seasonable expression of acceptance operates as acceptance even if it states additional or different terms, UNLESS: