Question 1

Which is NOT a correct statement concerning a liquidated damages clause?

Accepted Answer

A)  If the clause is enforced, the injured party can collect no more than the amount specified. 
B)  If the clause is enforced, the injured party has a choice between compensatory damages or liquidated damages. 
C)  It must be possible to determine actual damages. 
D)  The amount of liquidated damages are established by the parties to the contract. 
A)  If the clause is enforced, the injured party can collect no more than the amount specified. 
B)  If the clause is enforced, the injured party has a choice between compensatory damages or liquidated damages. 
C)  It must be possible to determine actual damages. 
D)  The amount of liquidated damages are established by the parties to the contract. B

Question 2

If monetary damages would be an adequate remedy,then an action for specific performance is not appropriate.

Accepted Answer

A) True 
 B)False  True

Question 3

An innocent party to an anticipatory repudiation of a contract has the right to treat the repudiation as a present,material breach and may file suit.

Accepted Answer

A) True 
 B)False  True

Question 4

An action for injunctive relief may be granted:

Accepted Answer

A)  if money is due and payable. 
B)  if the breach consists of doing a prohibited act. 
C)  if the breach would cause nominal damages. 
D)  if the breach would cause consequential damages. 
A)  if money is due and payable. 
B)  if the breach consists of doing a prohibited act. 
C)  if the breach would cause nominal damages. 
D)  if the breach would cause consequential damages.

Question 5

Damages in excess of actual loss are called:

Accepted Answer

A)  punitive damages. 
B)  compensatory damages. 
C)  restitution. 
D)  nominal damages. 
A)  punitive damages. 
B)  compensatory damages. 
C)  restitution. 
D)  nominal damages.

Question 6

The damages that are typically recoverable when a contract has been breached and one party has suffered loss are called:

Accepted Answer

A)  punitive damages. 
B)  emotional distress damages. 
C)  compensatory damages. 
D)  liquidated damages. 
A)  punitive damages. 
B)  emotional distress damages. 
C)  compensatory damages. 
D)  liquidated damages.

Question 7

A waiver of a breach may be either express or implied.

Accepted Answer

A) True 
 B)False

Question 8

A contractual provision which states that a waiver of rights will not constitute a modification to the contract is:

Accepted Answer

A)  not enforceable as being in bad faith. 
B)  not enforceable as a violation of law. 
C)  enforceable by one party only. 
D)  enforceable. 
A)  not enforceable as being in bad faith. 
B)  not enforceable as a violation of law. 
C)  enforceable by one party only. 
D)  enforceable.

Question 9

When the contract requires that both parties submit disputes to arbitration,this is an example of a limitation-of-remedies clause.

Accepted Answer

A) True 
 B)False

Question 10

The remedy of specific performance will most likely be granted in the case of a(n):

Accepted Answer

A)  employment contract. 
B)  contract to buy shares of publicly-traded stock. 
C)  contract for the sale of a business. 
D)  contract for the sale of Florida oranges. 
A)  employment contract. 
B)  contract to buy shares of publicly-traded stock. 
C)  contract for the sale of a business. 
D)  contract for the sale of Florida oranges.

Question 11

The normal remedy for breach of contract where the plaintiff has suffered a loss is nominal damages.

Accepted Answer

A) True 
 B)False

Question 12

Only direct losses from a breach of contract may be recovered by an injured party.

Accepted Answer

A) True 
 B)False

Question 13

The party that breaks a contract may be required to pay damages to the other party to compensate for:

Accepted Answer

A)  losses that could have been avoided by hiring someone else to perform the contract. 
B)  emotional disturbance caused by the breach of contract. 
C)  a heart attack induced by the emotional disturbance caused by the breach of contract. 
D)  damages resulting necessarily and directly from the breach of contract. 
A)  losses that could have been avoided by hiring someone else to perform the contract. 
B)  emotional disturbance caused by the breach of contract. 
C)  a heart attack induced by the emotional disturbance caused by the breach of contract. 
D)  damages resulting necessarily and directly from the breach of contract.

Question 14

An injured party who rescinds a contract after having performed services may recover the reasonable value of the performance rendered under restitutionary or quasi-contractual damages.

Accepted Answer

A) True 
 B)False

Question 15

If a seller delivers defective goods,the buyer does not lose the right to object to the breach of contract if the buyer:

Accepted Answer

A)  accepts the goods. 
B)  accepts the goods with a reservation of right. 
C)  agrees to a modification of the contract. 
D)  accepts the performance without protest. 
A)  accepts the goods. 
B)  accepts the goods with a reservation of right. 
C)  agrees to a modification of the contract. 
D)  accepts the performance without protest.

Question 16

The failure to act or perform in the manner called for by a contract is a:

Accepted Answer

A)  waiver. 
B)  breach. 
C)  forbearance. 
D)  reservation of right. 
A)  waiver. 
B)  breach. 
C)  forbearance. 
D)  reservation of right.

Question 17

When the plaintiff seeks the remedy of specific performance,the plaintiff wants the other party to carry out the terms of the contract and not pay damages.

Accepted Answer

A) True 
 B)False

Question 18

Consequential damages may not be recovered,even if they were within the contemplation of the parties at the time of contracting.

Accepted Answer

A) True 
 B)False

Question 19

If a plaintiff's loss involves damaged property,it is described as liquidated damages.

Accepted Answer

A) True 
 B)False

Question 20

When a party fails to perform in the manner called for in the contract,a breach occurs.

Accepted Answer

A) True 
 B)False

Exam 19: Breach of Contract and Remedies

Which is NOT a correct statement concerning a liquidated damages clause?

If monetary damages would be an adequate remedy,then an action for specific performance is not appropriate.

An innocent party to an anticipatory repudiation of a contract has the right to treat the repudiation as a present,material breach and may file suit.

An action for injunctive relief may be granted:

Damages in excess of actual loss are called:

The damages that are typically recoverable when a contract has been breached and one party has suffered loss are called:

A waiver of a breach may be either express or implied.

A contractual provision which states that a waiver of rights will not constitute a modification to the contract is:

When the contract requires that both parties submit disputes to arbitration,this is an example of a limitation-of-remedies clause.

The remedy of specific performance will most likely be granted in the case of a(n):

The normal remedy for breach of contract where the plaintiff has suffered a loss is nominal damages.

Only direct losses from a breach of contract may be recovered by an injured party.

The party that breaks a contract may be required to pay damages to the other party to compensate for:

An injured party who rescinds a contract after having performed services may recover the reasonable value of the performance rendered under restitutionary or quasi-contractual damages.

If a seller delivers defective goods,the buyer does not lose the right to object to the breach of contract if the buyer:

The failure to act or perform in the manner called for by a contract is a:

When the plaintiff seeks the remedy of specific performance,the plaintiff wants the other party to carry out the terms of the contract and not pay damages.

Consequential damages may not be recovered,even if they were within the contemplation of the parties at the time of contracting.

If a plaintiff's loss involves damaged property,it is described as liquidated damages.

When a party fails to perform in the manner called for in the contract,a breach occurs.

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