Question 1

Restitution can be obtained where a voidable contract is avoided.

Accepted Answer

A) True 
 B)False  True

Question 2

Courts will usually uphold a liquidated damage clause that represents a reasonable approximation of the damages where the actual amount would be very difficult to determine.

Accepted Answer

A) True 
 B)False  True

Question 3

Explain three limitations on monetary damages.

Accepted Answer

To accomplish the basic purposes of contract remedies, the law imposes on monetary damages the limitations of foreseeability, certainty, and mitigation. The limitation of foreseeability is intended to ensure that damages can be taken into account at the time of contracting. The test of foreseeable damages is objective. Damages are not recoverable for loss beyond an amount that the injured party can establish with reasonable certainty. This limitation is intended to ensure that damages are compensatory and not speculative. The third limitation, mitigation of damages, is the doctrine that the injured party may not recover damages for loss that he could have avoided with reasonable effort and without undue risk, burden, or humiliation.

Question 4

Contract damages that put the injured party in as good a position as if the other party had performed are:

Accepted Answer

A)  compensatory damages. 
B)  incidental damages. 
C)  consequential damages. 
D)  liquidated damages. 
A)  compensatory damages. 
B)  incidental damages. 
C)  consequential damages. 
D)  liquidated damages.

Question 5

The majority of states allow the injured party who has been induced to enter into a contract by fraud to recover only "out-of-pocket" damages equal to the difference between the value of what she has received and the value of what she has given for it.

Accepted Answer

A) True 
 B)False

Question 6

A small damage amount fixed without regard to the amount of loss is known as:

Accepted Answer

A)  reliance damages. 
B)  out-of-pocket damages. 
C)  nominal damages. 
D)  incidental damages. 
A)  reliance damages. 
B)  out-of-pocket damages. 
C)  nominal damages. 
D)  incidental damages.

Question 7

Under the rule in Hadley v. Baxendale, only foreseeable damages can be recovered.

Accepted Answer

A) True 
 B)False

Question 8

The majority of states follow the rule in awarding damages for fraud.

Accepted Answer

A)  benefit-of-the-bargain 
B)  out-of-pocket 
C)  liquidated 
D)  restitution 
A)  benefit-of-the-bargain 
B)  out-of-pocket 
C)  liquidated 
D)  restitution

Question 9

Compensatory damages are intended to protect the injured party's expectation interest.

Accepted Answer

A) True 
 B)False

Question 10

Define incidental damages and give an example.

Accepted Answer

Incidental damages are damages that aris

Question 11

Restitution is available when:

Accepted Answer

A)  Elizabeth agrees to sell an acre of land to Vanessa, and after Vanessa makes a partial payment Elizabeth wrongfully refuses to transfer title. 
B)  Lawrence makes an oral contract to provide physical training for Lee for fourteen months and Lee discharges Lawrence after six months. 
C)  Gilbert uses undue influence to induce Cynthia to sell him an antique chair for $10. 
D)  Restitution is available in all of these cases. 
A)  Elizabeth agrees to sell an acre of land to Vanessa, and after Vanessa makes a partial payment Elizabeth wrongfully refuses to transfer title. 
B)  Lawrence makes an oral contract to provide physical training for Lee for fourteen months and Lee discharges Lawrence after six months. 
C)  Gilbert uses undue influence to induce Cynthia to sell him an antique chair for $10. 
D)  Restitution is available in all of these cases.

Question 12

Monetary damages are the most frequently granted remedy for breach of contract.

Accepted Answer

A) True 
 B)False

Question 13

At its discretion, a court may grant the equitable remedy of injunction against breach of a contractual duty where damages would be inadequate.

Accepted Answer

A) True 
 B)False

Question 14

Equitable remedies will not be granted where:

Accepted Answer

A)  the terms of the contract are fair. 
B)  the consideration is adequate. 
C)  the terms of the contract are sufficiently certain. 
D)  the contract is tainted with fraud, duress, undue influence, mistake, or unfair practices. 
A)  the terms of the contract are fair. 
B)  the consideration is adequate. 
C)  the terms of the contract are sufficiently certain. 
D)  the contract is tainted with fraud, duress, undue influence, mistake, or unfair practices.

Question 15

Consequential damages include lost profits and injury to person or property resulting from defective performance.

Accepted Answer

A) True 
 B)False

Question 16

Equitable remedies result in money awards to the plaintiff.

Accepted Answer

A) True 
 B)False

Question 17

Where a contract is unenforceable because of the statute of frauds, a party may recover the benefits conferred on the other party in reliance on the contract.

Accepted Answer

A) True 
 B)False

Question 18

Liquidated damages are an equitable remedy.

Accepted Answer

A) True 
 B)False

Question 19

When a breach of contract occurs, the nonbreaching party is required to take reasonable steps to lessen or mitigate the damages that he may sustain.

Accepted Answer

A) True 
 B)False

Question 20

To fully compensate plaintiffs in breach of contract cases, courts always award punitive damages commensurate with the losses the plaintiffs have suffered.

Accepted Answer

A) True 
 B)False

Exam 18: Contract Remedies

Restitution can be obtained where a voidable contract is avoided.

Courts will usually uphold a liquidated damage clause that represents a reasonable approximation of the damages where the actual amount would be very difficult to determine.

Explain three limitations on monetary damages.

Contract damages that put the injured party in as good a position as if the other party had performed are:

The majority of states allow the injured party who has been induced to enter into a contract by fraud to recover only "out-of-pocket" damages equal to the difference between the value of what she has received and the value of what she has given for it.

A small damage amount fixed without regard to the amount of loss is known as:

Under the rule in Hadley v. Baxendale, only foreseeable damages can be recovered.

The majority of states follow the rule in awarding damages for fraud.

Compensatory damages are intended to protect the injured party's expectation interest.

Define incidental damages and give an example.

Restitution is available when:

Monetary damages are the most frequently granted remedy for breach of contract.

At its discretion, a court may grant the equitable remedy of injunction against breach of a contractual duty where damages would be inadequate.

Equitable remedies will not be granted where:

Consequential damages include lost profits and injury to person or property resulting from defective performance.

Equitable remedies result in money awards to the plaintiff.

Where a contract is unenforceable because of the statute of frauds, a party may recover the benefits conferred on the other party in reliance on the contract.

Liquidated damages are an equitable remedy.

When a breach of contract occurs, the nonbreaching party is required to take reasonable steps to lessen or mitigate the damages that he may sustain.

To fully compensate plaintiffs in breach of contract cases, courts always award punitive damages commensurate with the losses the plaintiffs have suffered.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property