Question 1

Which of the following terms refers to a nonbreaching party's legal duty to avoid or reduce damages caused by a breach of contract?

Accepted Answer

A) tender of performance 
B) mitigation of damages 
C) liquidation of damages 
D) disclaimer of consequential damages 
A) tender of performance 
B) mitigation of damages 
C) liquidation of damages 
D) disclaimer of consequential damages B

Question 2

Harold and Ali enter into a contract where Ali has to ship goods within six weeks of signing the contract.Two weeks later, Ali informs Howard that he cannot provide the shipment in time.What type of contractual breach does this constitute? Suggest Howard's course of action following the breach of contract.

Accepted Answer

Ali's actions constitute an anticipatory breach.An anticipatory breach (or anticipatory repudiation)of a contract occurs when a contracting party informs the other party in advance that he or she will not perform his or her contractual duties when due.Where there is an anticipatory repudiation, the nonbreaching party's-Howard's, in this case-obligations under the contract are discharged immediately.Howard also has the right to sue Ali when the anticipatory breach occurs; there is no need to wait until performance is due.

Question 3

Consequential damages arise from circumstances outside a contract.

Accepted Answer

A) True 
 B)False  True

Question 4

________ is a term that denotes the return of goods or property received from the other party to undo a contract.

Accepted Answer

A) Rescission 
B) Recession 
C) Restitution 
D) Retribution 
A) Rescission 
B) Recession 
C) Restitution 
D) Retribution

Question 5

________ occurs when one contracting party informs the other that he or she will not perform his or her contractual duties when due.

Accepted Answer

A) Restitution 
B) Rescission 
C) Anticipatory repudiation 
D) Material breach 
A) Restitution 
B) Rescission 
C) Anticipatory repudiation 
D) Material breach

Question 6

If an employer breaches an employment contract, the employee owes a duty to mitigate damages by trying to find substitute employment.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following torts arises when a third party induces a contracting party to breach the contract with another party?

Accepted Answer

A) intentional interference with contractual relations 
B) breach of the covenant of good faith and fair dealing 
C) tort of bad faith 
D) malicious breach of contractual relations 
A) intentional interference with contractual relations 
B) breach of the covenant of good faith and fair dealing 
C) tort of bad faith 
D) malicious breach of contractual relations

Question 8

In an anticipatory breach, the nonbreaching party does not have the right to sue the breaching party until performance is due.

Accepted Answer

A) True 
 B)False

Question 9

In the event of material breach, the nonbreaching party is discharged from further performance under the contract.

Accepted Answer

A) True 
 B)False

Question 10

A ________ is an order of the court that enables a government officer to seize property of the breaching party and sell it at auction to satisfy a judgment.

Accepted Answer

A) writ of attachment 
B) writ of garnishment 
C) specific performance 
D) liquidation of damages 
A) writ of attachment 
B) writ of garnishment 
C) specific performance 
D) liquidation of damages

Question 11

Nominal damages are awarded when no financial loss resulted from the breach.

Accepted Answer

A) True 
 B)False

Question 12

Rudy was working as an applications developer in a software firm in San Jose.His employment contract was for three years at $100, 000 a year.Two years into the contract, Rudy's employer fired him as a part of downsizing.Which of the following jobs could Rudy take in order to mitigate damages?

Accepted Answer

A) Any job that offers $100, 000 or more a year. 
B) Another software applications developer job, irrespective of the salary. 
C) A job in any software firm in any part of the country. 
D) An applications developer job in San Jose for $100, 000 a year or more. 
A) Any job that offers $100, 000 or more a year. 
B) Another software applications developer job, irrespective of the salary. 
C) A job in any software firm in any part of the country. 
D) An applications developer job in San Jose for $100, 000 a year or more.

Question 13

When there is substantial performance of a contract, the nonbreaching party may sue to recover the cost to repair the defect.

Accepted Answer

A) True 
 B)False

Question 14

To be liable for consequential damages, the breaching party need not know nor have reason to know that the breach will cause special damages to the other party.

Accepted Answer

A) True 
 B)False

Question 15

Consequential damages are unforeseeable damages.

Accepted Answer

A) True 
 B)False

Question 16

Specific performance is awarded if the subject matter of the contract is unique.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following hold true in case of liquidated damages?

Accepted Answer

A) For liquidated damages to be lawful, the actual damages must be precisely determined. 
B) Liquidated damages are enforceable even if actual damages are later determined to be different. 
C) A liquidated damages clause is considered a penalty if actual damages are not determinable in advance. 
D) If a liquidated damages clause is found to be a penalty, it continues to be enforceable. 
A) For liquidated damages to be lawful, the actual damages must be precisely determined. 
B) Liquidated damages are enforceable even if actual damages are later determined to be different. 
C) A liquidated damages clause is considered a penalty if actual damages are not determinable in advance. 
D) If a liquidated damages clause is found to be a penalty, it continues to be enforceable.

Question 18

An unconditional and absolute offer by a contracting party to perform his or her obligations under the contract is known as an injunction.

Accepted Answer

A) True 
 B)False

Question 19

If the employee breaches the contract, the employer can recover the costs to hire a new employee.

Accepted Answer

A) True 
 B)False

Question 20

QuickClicks, an online advertising company makes a contract to purchase six computers from Comptail, a local retailer, for $20, 000.However, Comptail breaches the contract by not delivering the computers on time.The next day, QuickClicks manages to purchase six computers from another retailer for $18, 000 and receives immediate delivery.QuickClicks can bring a lawsuit against Comptail to recover ________ damages.

Accepted Answer

A) consequential 
B) compensatory 
C) nominal 
D) liquidated 
A) consequential 
B) compensatory 
C) nominal 
D) liquidated

Exam 16: Remedies for Breach of Traditional and E-Contracts

Which of the following terms refers to a nonbreaching party's legal duty to avoid or reduce damages caused by a breach of contract?

Consequential damages arise from circumstances outside a contract.

________ is a term that denotes the return of goods or property received from the other party to undo a contract.

________ occurs when one contracting party informs the other that he or she will not perform his or her contractual duties when due.

If an employer breaches an employment contract, the employee owes a duty to mitigate damages by trying to find substitute employment.

Which of the following torts arises when a third party induces a contracting party to breach the contract with another party?

In an anticipatory breach, the nonbreaching party does not have the right to sue the breaching party until performance is due.

In the event of material breach, the nonbreaching party is discharged from further performance under the contract.

A ________ is an order of the court that enables a government officer to seize property of the breaching party and sell it at auction to satisfy a judgment.

Nominal damages are awarded when no financial loss resulted from the breach.

Rudy was working as an applications developer in a software firm in San Jose.His employment contract was for three years at $100, 000 a year.Two years into the contract, Rudy's employer fired him as a part of downsizing.Which of the following jobs could Rudy take in order to mitigate damages?

When there is substantial performance of a contract, the nonbreaching party may sue to recover the cost to repair the defect.

To be liable for consequential damages, the breaching party need not know nor have reason to know that the breach will cause special damages to the other party.

Consequential damages are unforeseeable damages.

Specific performance is awarded if the subject matter of the contract is unique.

Which of the following hold true in case of liquidated damages?

An unconditional and absolute offer by a contracting party to perform his or her obligations under the contract is known as an injunction.

If the employee breaches the contract, the employer can recover the costs to hire a new employee.

Legal Heritage and the Digital Age

Courts and Jurisdiction

Judicial,Alternative,and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Product and Strict Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

E-Commerce and Digital Law

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, Defenses, and Discharge

Banks, E-Money, and Financial Reform

Credit,Mortgages,and Debtor's Rights

Secured Transactions and E-Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment, Worker Protection, and Immigration Law

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Small Business, Entrepreneurship, and General Partnerships

Limited Partnerships and Special Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchises and Special Forms of Businesses

Investor Protection, E-Securities, and Wall Street Reform

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

Real Property

Landlord-Tenant Law and Land Use Regulation

Insurance

Accountants' Duties and Liability

Wills Trusts and Estates

Family Law

International and World Trade Law

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