Business Law: Understanding Contract Essentials

What is a common legal ground for the termination of a contract?

• Mutual agreement

• A significant increase in cost for one party

• Change in business strategy

• Desire for a new contract

Which of the following is NOT a method of enforcing contract terms?

• Mediation

• Arbitration

• Public shaming

• Litigation

What constitutes a breach of contract?

• Delay in payment as per the agreed terms

• Deciding to renegotiate the contract terms

• Informal complaints about service quality

• All of the above

Which legal remedy involves the payment of money to compensate for a breach of contract?

• Specific performance

• Injunction

• Damages

• Rescission

What is the primary goal of contract dispute resolution?

• To determine which party is at fault

• To enforce punitive measures

• To restore the parties, as much as possible, to their positions before the dispute

• To publicly document the dispute

Which of the following is NOT a contractual obligation?

• Duty to perform the tasks as agreed

• Duty to maintain confidentiality, if specified

• Duty to ensure the personal happiness of the other party

• Duty to pay for services or goods received

What happens at the end of a contract period if neither party takes action to renew or terminate the contract?

• The contract automatically renews for the same period.

• The contract terms are considered void.

• The contract may continue on a month-to-month basis, depending on the terms.

• The contract becomes an indefinite agreement.

Which of the following is a valid reason for a contract to be terminated by law?

• One party no longer finds the contract terms favorable.

• The contract has become impossible to perform due to unforeseen circumstances.

• The contract was signed more than five years ago.

• The market conditions have changed.

In the context of contract law, what is "specific performance"?

• A financial penalty for breach of contract

• A court order to fulfill the contract as agreed

• A method of dispute resolution

• A type of contract modification

What is the role of arbitration in contract disputes?

• To provide a public forum for airing grievances

• To facilitate a binding resolution outside of court

• To determine the amount of damages owed

• To rewrite the contract terms