Question 1

What interests of injured parties are protected by remedies for a breach of contract?

Accepted Answer

Contract remedies are available to protect one or more of the following interests of the injured parties: 
(a) expectation interest, which is the interest in having the benefit of the bargain by being put in a position as good as the one they would have been in had the contract been performed;
(b) reliance interest, which is the interest in being reimbursed for loss caused by reliance on the contract by being put in a position as good as the one they would have been in had the contract not been made; or
(c) restitution interest, which is the interest in having restored to them any benefit that they had conferred on the other party.

Question 2

Gina contracts with Lonnie to build a fence around her backyard in the next three weeks. If Lonnie breaches the contract, Gina can elect the remedy of damages or the remedy of injunctive relief to prevent Lonnie from providing his fencing services for anyone else until he completes her fence.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following is NOT true regarding specific performance?

Accepted Answer

A)  It will not be granted if money damages would be adequate to compensate the injured party. 
B)  It is granted in contracts involving unique items of personal property. 
C)  It will be granted frequently in contracts involving the sale of goods. 
D)  The courts will not order directly the specific enforcement of contracts for personal services. 
A)  It will not be granted if money damages would be adequate to compensate the injured party. 
B)  It is granted in contracts involving unique items of personal property. 
C)  It will be granted frequently in contracts involving the sale of goods. 
D)  The courts will not order directly the specific enforcement of contracts for personal services. C

Question 4

Under the law of restitution, a remedy for misrepresentation is rescission (avoidance) of the contract by the deceived party, though when appropriate, the courts also will require restitution.

Accepted Answer

A) True 
 B)False

Question 5

Marcella pays $12,000 down on a houseboat which Hugh had agreed to sell to her for $64,000. Marcella then repudiates the contract. Hugh sells the houseboat to Lloyd in good faith for $60,000. Marcella may recover from Hugh:

Accepted Answer

A)  nothing, since she was the one who repudiated the contract. 
B)  her $12,000 down payment since Hugh's contract with Lloyd created a novation and discharged any duty Marcella had to pay anything toward the houseboat. 
C)  $8,000 in restitution, which represents Marcella's $12,000 down payment less the $4,000 in damages Hugh sustained because of Marcella's breach. 
D)  only a nominal amount. 
A)  nothing, since she was the one who repudiated the contract. 
B)  her $12,000 down payment since Hugh's contract with Lloyd created a novation and discharged any duty Marcella had to pay anything toward the houseboat. 
C)  $8,000 in restitution, which represents Marcella's $12,000 down payment less the $4,000 in damages Hugh sustained because of Marcella's breach. 
D)  only a nominal amount.

Question 6

Arlene signs an employment contract to work for a local business, Davis Restoration, for one year but is wrongfully discharged after three months. In order to recover from Davis full pay for the remaining nine months of her contract, Arlene:

Accepted Answer

A)  must accept employment 60 miles away if that is the only available similar job. 
B)  must use reasonable efforts to mitigate her damages by seeking other employment, even if she does not find another job. 
C)  need only file suit against Davis Restoration since they are contractually bound to pay Arlene for one year of employment. 
D)  must accept a radically different type of job if that is all she can find. 
A)  must accept employment 60 miles away if that is the only available similar job. 
B)  must use reasonable efforts to mitigate her damages by seeking other employment, even if she does not find another job. 
C)  need only file suit against Davis Restoration since they are contractually bound to pay Arlene for one year of employment. 
D)  must accept a radically different type of job if that is all she can find.

Question 7

If the parties to a contract stipulate an amount that will be paid in the event of a breach, the courts will always enforce it.

Accepted Answer

A) True 
 B)False

Question 8

Bartow signed a contract to coach baseball for Washington High for a period of three years. After two years he is offered and accepts an assistant coaching position at State University. Contract law will not allow Washington High to ask for:

Accepted Answer

A)  specific performance of his contract. 
B)  payment of compensatory damages. 
C)  an injunction against coaching at the university. 
D)  liquidated damages. 
A)  specific performance of his contract. 
B)  payment of compensatory damages. 
C)  an injunction against coaching at the university. 
D)  liquidated damages.

Question 9

To accomplish the basic purposes of contract remedies, which of the following limitations have not been imposed upon monetary damages?

Accepted Answer

A)  Foreseeability. 
B)  Certainty. 
C)  Mitigation. 
D)  Restitution. 
A)  Foreseeability. 
B)  Certainty. 
C)  Mitigation. 
D)  Restitution.

Question 10

In the case of Hadley v. Baxendale , the plaintiff was seeking damages for:

Accepted Answer

A)  restitution. 
B)  lost profits. 
C)  failure to convey land. 
D)  failure to specifically perform a contract. 
A)  restitution. 
B)  lost profits. 
C)  failure to convey land. 
D)  failure to specifically perform a contract.

Question 11

Wayne breaches a contract with Tim causing damages of $25,000 in lost profits, when damages under ordinary circumstances would be $17,000. Explain under what circumstances a court would award $25,000.

Accepted Answer

If a plaintiff's expected profit is extr

Question 12

Equitable remedies are available any time the plaintiff chooses them over money damages.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

In which of the following situations will a court grant specific performance?

Accepted Answer

A)  In a case involving breach of contract for the sale of real property. 
B)  In contracts for personal services. 
C)  Where goods are unique or rare. 
D)  Both in cases involving breach of contract for the sale of real property and w here goods are unique or rare . 
A)  In a case involving breach of contract for the sale of real property. 
B)  In contracts for personal services. 
C)  Where goods are unique or rare. 
D)  Both in cases involving breach of contract for the sale of real property and w here goods are unique or rare .

Question 16

Under contract law, the deceived party can elect either to affirm and enforce the contract despite the misrepresentation or to disaffirm the contract and seek rescission.

Accepted Answer

A) True 
 B)False

Question 17

In the Arrowhead School District No. 75, Park County, Montana, v. James A. Klyap, Jr. case, the court found the liquidated damages clause was void as a penalty because it was unreasonable and unduly oppressive.

Accepted Answer

A) True 
 B)False

Question 18

Vladimir entered into a contract to buy Daniel's collection of rare stamps. Vladimir mailed payment of $10,000 for the stamps to Daniel, but now Daniel tells Vladimir, "I'll never part with these stamps." Are the following remedies available to Vladimir?

Accepted Answer

A)  Restitution: Yes; Specific Performance: Yes 
B)  Restitution: Yes; Specific Performance: No 
C)  Restitution: No; Specific Performance: Yes 
D)  Restitution: No; Specific Performance: No 
A)  Restitution: Yes; Specific Performance: Yes 
B)  Restitution: Yes; Specific Performance: No 
C)  Restitution: No; Specific Performance: Yes 
D)  Restitution: No; Specific Performance: No

Question 19

Bob's brother, Steve, planned to visit over Labor Day weekend. Together they planned to build a deck in Bob's backyard. Bob ordered the lumber, concrete, nails, and other supplies to be delivered on Friday. He also arranged to rent a saw for the weekend (Sat., Sun., and Mon.) at a cost of $20 a day. When he went to pick up the saw, the store had already rented it. He drove all over town trying to borrow another but could only get one for Sunday, Monday, and Tuesday at a cost of $50 per day. Because they couldn't work on Saturday without a saw, Bob had to hire Mac at a cost of $80 to work with him on Tuesday and, of course, Bob had to take off from work. Calculate the damages to which Bob is entitled. Why? Explain.

Accepted Answer

(1) Cost of rental of a replacement saw

Question 20

The costs or losses an injured party avoids by not having to perform are not figured in the computation of damages.

Accepted Answer

A) True 
 B)False

Exam 18: Contract Remedies

What interests of injured parties are protected by remedies for a breach of contract?

Gina contracts with Lonnie to build a fence around her backyard in the next three weeks. If Lonnie breaches the contract, Gina can elect the remedy of damages or the remedy of injunctive relief to prevent Lonnie from providing his fencing services for anyone else until he completes her fence.

Which of the following is NOT true regarding specific performance?

Under the law of restitution, a remedy for misrepresentation is rescission (avoidance) of the contract by the deceived party, though when appropriate, the courts also will require restitution.

Marcella pays $12,000 down on a houseboat which Hugh had agreed to sell to her for $64,000. Marcella then repudiates the contract. Hugh sells the houseboat to Lloyd in good faith for $60,000. Marcella may recover from Hugh:

Arlene signs an employment contract to work for a local business, Davis Restoration, for one year but is wrongfully discharged after three months. In order to recover from Davis full pay for the remaining nine months of her contract, Arlene:

If the parties to a contract stipulate an amount that will be paid in the event of a breach, the courts will always enforce it.

Bartow signed a contract to coach baseball for Washington High for a period of three years. After two years he is offered and accepts an assistant coaching position at State University. Contract law will not allow Washington High to ask for:

To accomplish the basic purposes of contract remedies, which of the following limitations have not been imposed upon monetary damages?

In the case of Hadley v. Baxendale , the plaintiff was seeking damages for:

Wayne breaches a contract with Tim causing damages of $25,000 in lost profits, when damages under ordinary circumstances would be $17,000. Explain under what circumstances a court would award $25,000.

Equitable remedies are available any time the plaintiff chooses them over money damages.

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.

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.

In which of the following situations will a court grant specific performance?

Under contract law, the deceived party can elect either to affirm and enforce the contract despite the misrepresentation or to disaffirm the contract and seek rescission.

In the Arrowhead School District No. 75, Park County, Montana, v. James A. Klyap, Jr. case, the court found the liquidated damages clause was void as a penalty because it was unreasonable and unduly oppressive.

Vladimir entered into a contract to buy Daniel's collection of rare stamps. Vladimir mailed payment of $10,000 for the stamps to Daniel, but now Daniel tells Vladimir, "I'll never part with these stamps." Are the following remedies available to Vladimir?

The costs or losses an injured party avoids by not having to perform are not figured in the computation of damages.

Introduction to Law

Business Ethics

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

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

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 Wills

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