Master Contract Termination: Discharge of Contracts Made Easy

Question 1

What is the difference between rescission and termination of a contract?

Accepted Answer

Rescission sets aside the contract from the beginning, while termination ends the contract from the date of termination.

Answer

Termination sets aside the contract from the beginning, while rescission ends the contract from the date of termination.

Answer

There is no difference between rescission and termination.

Answer

Rescission is available only for contracts that are void, while termination is available for all contracts.

Question 2

Which of the following is NOT a ground for rescission of a contract?

Accepted Answer

Breach of contract

Answer

Mistake

Answer

Duress

Answer

Undue influence

Question 3

What is the effect of a valid notice of termination of a contract?

Accepted Answer

It brings the contract to an end at the date specified in the notice.

Answer

It gives the other party a reasonable amount of time to perform their obligations.

Answer

It discharges the parties from their contractual obligations.

Answer

It suspends the contract until further notice.

Question 4

Which of the following is not a recognized method of discharging a contract in English Law?

Accepted Answer

Bankruptcy

Answer

Performance

Answer

Agreement

Answer

Frustration

Question 5

When a contract is discharged by frustration, the parties are:

Accepted Answer

Released from all obligations

Answer

Only released from future obligations

Answer

Still liable for damages

Answer

Entitled to compensation

Question 6

When a contract is discharged by performance, the parties have:

Accepted Answer

Fully completed their obligations

Answer

Partially completed their obligations

Answer

Breached their obligations

Answer

Repudiated their obligations

Question 7

Which of the following is a defense to a claim for breach of contract based on frustration?

Accepted Answer

Self-induced frustration

Answer

Foreseeability

Answer

Impossibility

Answer

Change in circumstances

Question 8

Which of the following is not a potential consequence of a breach of contract?

Accepted Answer

Frustration

Answer

Damages

Answer

Specific performance

Answer

Rescission

Question 9

When a contract is discharged by frustration, the parties are:

Accepted Answer

Released from all obligations

Answer

Only released from future obligations

Answer

Still liable for damages

Answer

Entitled to compensation

Question 10

In which situation can a party avoid fulfilling a contract due to supervening illegality?

Accepted Answer

When the contract's subject matter becomes illegal.

Answer

When a party violates the contract.

Answer

When both parties agree to terminate the contract.

Question 11

Which legal principle allows for the termination of a contract due to a fundamental change in circumstances that make performance impossible?

Accepted Answer

Frustration

Answer

Force Majeure

Answer

Mistake

Answer

Breach of Contract

Question 12

For an agreement to be effective in discharging a contract, which requirement must be met?

Accepted Answer

Consideration

Answer

Written documentation

Answer

Presence of witnesses

Answer

Notarization

Question 13

Explain the distinction between rescission and termination in the context of contract law:

Accepted Answer

Rescission restores the parties to their initial positions, while termination ends the contract.

Answer

Rescission applies exclusively to contracts involving land, whereas termination is applicable to all contracts.

Answer

Termination is only an option for contracts that have been breached, while rescission can be applied to any contract.

Answer

Rescission is always a unilateral action, whereas termination requires mutual agreement.

Question 14

What is the primary purpose of a novation agreement?

Accepted Answer

To create a new contract that supersedes an existing one

Answer

To modify the terms of an existing contract

Answer

To terminate an existing contract

Answer

To assign an existing contract to a third party

Question 15

What is the main purpose of the law governing how contracts end?

Accepted Answer

To provide legal ways for people to end their contracts

Answer

To punish people who break their promises in a contract

Answer

To make sure everyone always does everything they promised in a contract

Answer

To protect people who aren't directly involved in a contract

Question 16

Which legal principle is NOT applicable to the consequences of breaching a material term of a contract?

Accepted Answer

The automatic termination of the contract upon breach

Answer

The right of the non-breaching party to terminate the contract

Answer

The obligation of the non-breaching party to minimize their losses

Answer

The potential liability of the breaching party for damages

Question 17

Which of the following best describes the difference between actual and anticipatory breach of contract?

Accepted Answer

Actual breach occurs after the time for performance has passed, while anticipatory breach occurs before.

Answer

Both actual and anticipatory breach require full performance of the contract before any remedy can be sought.

Answer

Anticipatory breach is more serious than actual breach because it shows the party's unwillingness to perform.

Answer

Actual breach is always a material breach, while anticipatory breach can be either material or non-material.

Question 18

What requirement must be met for a contract to be discharged by performance?

Accepted Answer

Parties must fulfill their contractual obligations

Answer

Impossibility of performance is declared

Answer

Parties mutually agree to terminate the contract

Answer

A court order is obtained

Question 19

Which of the following is a ground for discharging a contract on the basis of frustration?

Accepted Answer

Subsequent change of circumstances

Answer

Mistake

Answer

Illegality

Answer

Lack of consent

Question 20

What is the primary consequence of a breach of contract?

Accepted Answer

The non-breaching party is entitled to sue for damages

Answer

Both parties are released from their obligations

Answer

The contract is automatically terminated

Answer

The court can order specific performance

Question 21

What is the doctrinal effect of anticipatory breach?

Accepted Answer

It allows the non-breaching party to sue for damages before the breach occurs

Answer

It is only available in contracts for the sale of goods

Answer

It is a defense against a breach of contract action

Question 22

What is the purpose of a liquidated damages clause in a contract?

Accepted Answer

To determine the amount of compensation payable in the event of a breach

Answer

To make it easier for the court to assess damages

Answer

To prevent the non-breaching party from seeking other remedies

Question 23

What is the purpose of a discharge by mutual agreement?

Accepted Answer

To end the contract without creating any further obligations

Answer

To assign the contractual rights and obligations to a third party

Answer

To punish the party who breached the contract