Question 1

Explain why it is necessary for an innocent party to mitigate the damages occasioned by a breach of contract.

Accepted Answer

This is because in determining the damages that an innocent party has suffered,the courts will deduct any amount or amounts by which the innocent party could have reduced its losses.This could result in either substantially reducing or completely eliminating the damages to be recovered.

Question 2

Casey Construction abandoned its $23 million North County road project after spending $7 million.By this time,one progress payment of $5 million had been made.The county immediately contracted with Beachwood Corp.to take over and finish the project for $21 million.Expectation damages for Casey Construction would be

Accepted Answer

A) the difference between $16 and $21 million. 
B) the difference between $21 and $23 million. 
C) zero,since Casey did $2 million of work where no payment was received. 
D) none; only consequential damages might apply. 
E) the difference between $18 and $21 million. 
A) the difference between $16 and $21 million. 
B) the difference between $21 and $23 million. 
C) zero,since Casey did $2 million of work where no payment was received. 
D) none; only consequential damages might apply. 
E) the difference between $18 and $21 million. E

Question 3

Explain the attitude of the courts towards the use of exemption clauses.

Accepted Answer

The courts generally frown on the use of exemption clauses because they are perceived as giving the party who drafts them an advantage over the other party.This is especially so where the party who drafts the clause is the party in breach.Where the party who prepares the exemption clause is the party in breach,the courts have avoided the applicability of the exemption clause by (a)strictly construing the clause against the person in breach,(b)striking down the clause when the clause was unconscionable at time of contracting,and (c)failing to enforce the clause when there is a strong public policy reason against enforcement.

Question 4

A breach of a minor term in a contract

Accepted Answer

A) does not entitle an aggrieved party to abandon obligations under a contract. 
B) will enable an aggrieved party to elect to treat the breach as discharging the contract. 
C) does not entitle an aggrieved party to damages. 
D) amounts to a frustration of the contract. 
E) amounts to a termination of the contract. 
A) does not entitle an aggrieved party to abandon obligations under a contract. 
B) will enable an aggrieved party to elect to treat the breach as discharging the contract. 
C) does not entitle an aggrieved party to damages. 
D) amounts to a frustration of the contract. 
E) amounts to a termination of the contract.

Question 5

General damages are

Accepted Answer

A) damages that cannot be precisely calculated in monetary terms. 
B) damages that are meant to punish the wrongdoer,whether calculable or not. 
C) damages that include both readily calculable damages and damages that cannot be precisely calculated. 
D) damages that can be readily calculated. 
E) all of the above 
A) damages that cannot be precisely calculated in monetary terms. 
B) damages that are meant to punish the wrongdoer,whether calculable or not. 
C) damages that include both readily calculable damages and damages that cannot be precisely calculated. 
D) damages that can be readily calculated. 
E) all of the above

Question 6

The effect of the doctrine of substantial performance is that

Accepted Answer

A) where there is substantial performance,a court will entertain a suit for damages for breach of contract. 
B) a promisee cannot seize upon a trivial failure of performance to avoid his or her obligations under a contract. 
C) where there is substantial performance,a court will not entertain a suit for damages for breach of contract. 
D) the promisee who has substantially performed a contract is entitled to damages. 
E) the promisor who has substantially performed a contract is entitled to damages. 
A) where there is substantial performance,a court will entertain a suit for damages for breach of contract. 
B) a promisee cannot seize upon a trivial failure of performance to avoid his or her obligations under a contract. 
C) where there is substantial performance,a court will not entertain a suit for damages for breach of contract. 
D) the promisee who has substantially performed a contract is entitled to damages. 
E) the promisor who has substantially performed a contract is entitled to damages.

Question 7

When a breach of contract has occurred,the purpose of damages is to

Accepted Answer

A) make the case an example to the rest of the community that this type of behaviour will not be tolerated. 
B) have the damages reflect the severity of the breach. 
C) compensate the wronged party for the loss incurred. 
D) provide a deterrent for the breaking of moral and legal obligations. 
E) punish the party who has committed the breach by making him or her pay compensation. 
A) make the case an example to the rest of the community that this type of behaviour will not be tolerated. 
B) have the damages reflect the severity of the breach. 
C) compensate the wronged party for the loss incurred. 
D) provide a deterrent for the breaking of moral and legal obligations. 
E) punish the party who has committed the breach by making him or her pay compensation.

Question 8

What is anticipatory breach,and why is it considered to be a form of express repudiation?

Accepted Answer

Express repudiation takes place when a p

Question 9

Hastro Toys Mfg.operates on a "just-in-time" inventory basis.When one of its suppliers missed a 2:00 p.m.delivery of a key component,the entire assembly line was shut down for the balance of the day.Hastro is suing its supplier for ________ damages.

Accepted Answer

A) reliance 
B) expectation 
C) liquidated 
D) consequential 
E) general 
A) reliance 
B) expectation 
C) liquidated 
D) consequential 
E) general

Question 10

A party to a contract has a continuous expectation of performance.Explain.

Accepted Answer

The courts have held that a contract exi

Question 11

It is fair to say that the damages for breach of contract may well exceed the damages arising in tort.

Accepted Answer

A) True 
 B)False

Question 12

Distinguish an injunction order from an order for specific performance.

Accepted Answer

An injunction is an order preventing som

Question 13

A party is not only entitled to performance of a contract but also to a continuous expectation of performance in the period between formation of the contract and its performance.

Accepted Answer

A) True 
 B)False

Question 14

The concepts of unjust enrichment and restitution are part of the gradually expanding development in the area of

Accepted Answer

A) quasi tort. 
B) quasi contract. 
C) unconscionability. 
D) damages. 
E) substantial performance. 
A) quasi tort. 
B) quasi contract. 
C) unconscionability. 
D) damages. 
E) substantial performance.

Question 15

Where the losses suffered by an innocent party for breach of contract are minimal in nature,an award of damages

Accepted Answer

A) may be outweighed by the litigation costs incurred by the innocent party. 
B) will be a vindication of the innocent party. 
C) will usually be pursued as a matter of principle. 
D) establishes the validity of the innocent party's claim. 
E) all of the above 
A) may be outweighed by the litigation costs incurred by the innocent party. 
B) will be a vindication of the innocent party. 
C) will usually be pursued as a matter of principle. 
D) establishes the validity of the innocent party's claim. 
E) all of the above

Question 16

Which of the following is NOT true about how a breach may occur?

Accepted Answer

A) Jack may breach the contract by acting in a manner that makes his promise impossible to perform. 
B) Jack may breach a contract by expressly repudiating his liabilities. 
C) Jack may breach a contract by calling James and advising him that he will be ten minutes late in arriving at the home of James to start painting the home. 
D) Jack may breach a contract by tendering an actual performance that falls short of his promise. 
E) Jack may breach a contract by failing to perform all his obligations. 
A) Jack may breach the contract by acting in a manner that makes his promise impossible to perform. 
B) Jack may breach a contract by expressly repudiating his liabilities. 
C) Jack may breach a contract by calling James and advising him that he will be ten minutes late in arriving at the home of James to start painting the home. 
D) Jack may breach a contract by tendering an actual performance that falls short of his promise. 
E) Jack may breach a contract by failing to perform all his obligations.

Question 17

George Edwards has just bought a brand new furnace from Henry's Furnace Company.Towards the end of the installation of the furnace,a piece of piping falls on the furnace and scratches one side of it.Because of the scratch,George does not want to pay for the furnace.In a lawsuit by Henry's Furnace Company for payment

Accepted Answer

A) George will successfully defend the lawsuit because the scratch is a major breach and terminates the contract. 
B) George will successfully defend the action because a brand new furnace is not the same as a scratched furnace. 
C) George will successfully defend the lawsuit because the scratch fundamentally changed the contract. 
D) George will lose the lawsuit because the scratch is a minor breach of the contract. 
E) George will lose the lawsuit because he already provided a post-dated cheque for the full amount of the furnace. 
A) George will successfully defend the lawsuit because the scratch is a major breach and terminates the contract. 
B) George will successfully defend the action because a brand new furnace is not the same as a scratched furnace. 
C) George will successfully defend the lawsuit because the scratch fundamentally changed the contract. 
D) George will lose the lawsuit because the scratch is a minor breach of the contract. 
E) George will lose the lawsuit because he already provided a post-dated cheque for the full amount of the furnace.

Question 18

A party seeking an equitable remedy must come to court with "clean hands." Explain.

Accepted Answer

Equitable remedies are discretionary in

Question 19

Specific performance will always be granted to a purchaser of land.

Accepted Answer

A) True 
 B)False

Question 20

Explain the notion of continuous expectation of performance.

Accepted Answer

The courts have held that a contract exi

Exam 13: Breach of Contract and Its Remedies

Explain why it is necessary for an innocent party to mitigate the damages occasioned by a breach of contract.

Explain the attitude of the courts towards the use of exemption clauses.

A breach of a minor term in a contract

General damages are

The effect of the doctrine of substantial performance is that

When a breach of contract has occurred,the purpose of damages is to

What is anticipatory breach,and why is it considered to be a form of express repudiation?

Hastro Toys Mfg.operates on a "just-in-time" inventory basis.When one of its suppliers missed a 2:00 p.m.delivery of a key component,the entire assembly line was shut down for the balance of the day.Hastro is suing its supplier for ________ damages.

A party to a contract has a continuous expectation of performance.Explain.

It is fair to say that the damages for breach of contract may well exceed the damages arising in tort.

Distinguish an injunction order from an order for specific performance.

A party is not only entitled to performance of a contract but also to a continuous expectation of performance in the period between formation of the contract and its performance.

The concepts of unjust enrichment and restitution are part of the gradually expanding development in the area of

Where the losses suffered by an innocent party for breach of contract are minimal in nature,an award of damages

Which of the following is NOT true about how a breach may occur?

A party seeking an equitable remedy must come to court with "clean hands." Explain.

Specific performance will always be granted to a purchaser of land.

Explain the notion of continuous expectation of performance.

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

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