Question 1

Anticipatory breach of a contract is also referred to as anticipatory ________.

Accepted Answer

A)  reformation 
B)  rescission 
C)  repudiation 
D)  restitution 
A)  reformation 
B)  rescission 
C)  repudiation 
D)  restitution

Question 2

Which of the following statements is true of mitigation of damages?

Accepted Answer

A)  The breaching party must make efforts to mitigate damages resulting from the breach of contract. 
B)  If an employer breaches an employment contract, he or she owes a duty to mitigate damages by trying to find substitute employment for the employee. 
C)  The extent of mitigation of damages required is common to all kinds of contracts. 
D)  If an employer breaches a contract, the employee is only required to accept comparable employment. 
A)  The breaching party must make efforts to mitigate damages resulting from the breach of contract. 
B)  If an employer breaches an employment contract, he or she owes a duty to mitigate damages by trying to find substitute employment for the employee. 
C)  The extent of mitigation of damages required is common to all kinds of contracts. 
D)  If an employer breaches a contract, the employee is only required to accept comparable employment.

Question 3

Punitive damages are generally not recoverable for breach of contract except for certain tortious conduct.

Accepted Answer

A) True 
 B)False

Question 4

When does a minor breach occur?

Accepted Answer

A)  when a party rescinds the contract before actual work on the contract has commenced 
B)  when a party renders substantial performance of his or her contractual duties 
C)  when the party who is being offered goods or services rescinds the contract 
D)  when the party who is offering goods or services rescinds the contract 
A)  when a party rescinds the contract before actual work on the contract has commenced 
B)  when a party renders substantial performance of his or her contractual duties 
C)  when the party who is being offered goods or services rescinds the contract 
D)  when the party who is offering goods or services rescinds the contract

Question 5

Contract disputes cannot be heard or decided upon by any nonjudicial process.

Accepted Answer

A) True 
 B)False

Question 6

When an employee breaches a fixed-term employment contract by quitting before the end of the term,the employer can recover damages for ________.

Accepted Answer

A)  all expenses incurred in recruiting that employee 
B)  all amounts already paid to the employee under the contract 
C)  the amount equivalent to the employee's remaining term as per the contract 
D)  the costs to hire a new employee plus any additional increase in salary paid 
A)  all expenses incurred in recruiting that employee 
B)  all amounts already paid to the employee under the contract 
C)  the amount equivalent to the employee's remaining term as per the contract 
D)  the costs to hire a new employee plus any additional increase in salary paid

Question 7

A covenant of good faith and fair dealing is implied in contracts where the parties have a special relationship that involves a fiduciary duty.

Accepted Answer

A) True 
 B)False

Question 8

Disclaimer of consequential damages does not excuse breaching parties from paying compensatory damages.

Accepted Answer

A) True 
 B)False

Question 9

Kinetosphere Automation,Inc.(K.A.)makes a mandatory employment contract with all its employees.The contract states that K.A.'s employees are not to work for any other organization while they are employed by K.A.If K.A.finds an employee who is also serving another company,it can approach the court to obtain a(n)________ to prevent the employee from working in the other company.

Accepted Answer

A)  restitution 
B)  rescission 
C)  injunction 
D)  subjugation 
A)  restitution 
B)  rescission 
C)  injunction 
D)  subjugation

Question 10

________ is a situation in which a party to a contract renders performance exactly as required by the contract.

Accepted Answer

A)  Substantial performance 
B)  Strict performance 
C)  Anticipatory repudiation 
D)  Restitution 
A)  Substantial performance 
B)  Strict performance 
C)  Anticipatory repudiation 
D)  Restitution

Question 11

The most common remedy for a breach of contract is an award of ________.

Accepted Answer

A)  injunctions 
B)  substitute contracts 
C)  reformations 
D)  monetary damages 
A)  injunctions 
B)  substitute contracts 
C)  reformations 
D)  monetary damages

Question 12

To be liable for consequential damages,the breaching party must ________.

Accepted Answer

A)  be placed with a duty to make reasonable efforts to mitigate damages 
B)  have not caused any monetary damages to the nonbreaching party 
C)  provide a disclaimer of foreseeable consequential damages 
D)  know that the breach will cause special damages to the other party 
A)  be placed with a duty to make reasonable efforts to mitigate damages 
B)  have not caused any monetary damages to the nonbreaching party 
C)  provide a disclaimer of foreseeable consequential damages 
D)  know that the breach will cause special damages to the other party

Question 13

How does the covenant of good faith and fair dealing implied in contracts make contracted parties act more ethically?

Accepted Answer

Several states have held that a covenant

Question 14

________ 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 15

Which of the following statements is true of nominal damages?

Accepted Answer

A)  They are also known as compensatory damages. 
B)  Only damages above $1,000 can qualify as nominal damages. 
C)  Most courts favor nominal damages lawsuits. 
D)  Cases involving nominal damages are usually brought on principle. 
A)  They are also known as compensatory damages. 
B)  Only damages above $1,000 can qualify as nominal damages. 
C)  Most courts favor nominal damages lawsuits. 
D)  Cases involving nominal damages are usually brought on principle.

Question 16

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

Question 17

When an anticipatory breach of a contract occurs,the nonbreaching party must wait until the performance is due to sue the repudiating party.

Accepted Answer

A) True 
 B)False

Question 18

________ place the nonbreaching party in the same position as if the contract had been fully performed.

Accepted Answer

A)  Tort damages 
B)  Compensatory damages 
C)  Nominal damages 
D)  Consequential damages 
A)  Tort damages 
B)  Compensatory damages 
C)  Nominal damages 
D)  Consequential damages

Question 19

The courts have the discretion to award specific performance if the subject matter of the contract is unique.

Accepted Answer

A) True 
 B)False

Question 20

________ is a nonjudicial,private resolution of a contract dispute.

Accepted Answer

A)  Arbitration 
B)  Reformation 
C)  Injunction 
D)  Rescission 
A)  Arbitration 
B)  Reformation 
C)  Injunction 
D)  Rescission

Exam 14: Breach of Contract and Remedies

Anticipatory breach of a contract is also referred to as anticipatory ________.

Which of the following statements is true of mitigation of damages?

Punitive damages are generally not recoverable for breach of contract except for certain tortious conduct.

When does a minor breach occur?

Contract disputes cannot be heard or decided upon by any nonjudicial process.

When an employee breaches a fixed-term employment contract by quitting before the end of the term,the employer can recover damages for ________.

A covenant of good faith and fair dealing is implied in contracts where the parties have a special relationship that involves a fiduciary duty.

Disclaimer of consequential damages does not excuse breaching parties from paying compensatory damages.

________ is a situation in which a party to a contract renders performance exactly as required by the contract.

The most common remedy for a breach of contract is an award of ________.

To be liable for consequential damages,the breaching party must ________.

How does the covenant of good faith and fair dealing implied in contracts make contracted parties act more ethically?

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

Which of the following statements is true of nominal damages?

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

When an anticipatory breach of a contract occurs,the nonbreaching party must wait until the performance is due to sue the repudiating party.

________ place the nonbreaching party in the same position as if the contract had been fully performed.

The courts have the discretion to award specific performance if the subject matter of the contract is unique.

________ is a nonjudicial,private resolution of a contract dispute.

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