Question 1

Damages for reliance include expenses for:

Accepted Answer

A)  lost profits. 
B)  injury to the person. 
C)  preparing to perform. 
D)  punishment of the breaching party. 
A)  lost profits. 
B)  injury to the person. 
C)  preparing to perform. 
D)  punishment of the breaching party. C

Question 2

Barbara, an antique dealer, intentionally misrepresents the value of an antique chest of drawers, as $6,000 when she has reason to know the value is considerably less. Margaret agrees to buy it for $5,500. It is worth $2,500. In a state that uses the "out-of-pocket" rule, Margaret's damage award would be:

Accepted Answer

A)  $3,500. 
B)  $3,000. 
C)  $500. 
D)  $2,500. 
A)  $3,500. 
B)  $3,000. 
C)  $500. 
D)  $2,500. B

Question 3

When will a court enforce a liquidated damage clause? When will a court refuse to enforce one?

Accepted Answer

An agreement setting forth liquidated damages will be enforced if it is reasonable in light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages will be unenforceable as a penalty. If a liquidated damages provision is unenforceable, the injured party is still entitled to ordinary remedies for breach of contract.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Restitution can be obtained where a voidable contract is avoided.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

Contract remedies are available to prote

Question 7

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 8

Deanne contracts with Leonard to paint her barn in two weeks. If Leonard breaches the contract, Deanne can elect the remedy of damages or the remedy of injunctive relief to prevent Leonard from providing his painting services for anyone else until he paints her barn.

Accepted Answer

A) True 
 B)False

Question 9

Restitution requires a return of value to the aggrieved party.

Accepted Answer

A) True 
 B)False

Question 10

Punitive damages are not always awarded as a deterrent in breach of contract cases.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Even if a party has the power to avoid a contract for lack of capacity, duress, or undue influence, the party will lose that power by affirming the contract.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Incidental damages are those that arise directly out of the breach.

Accepted Answer

A) True 
 B)False

Question 15

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.

Question 16

Explain consequential damages. Give an example.

Accepted Answer

Consequential damages are those that do

Question 17

Courts of equity will grant specific performance of contracts for personal services.

Accepted Answer

A) True 
 B)False

Question 18

Scott, a minor, sells his digital camera to Megan, who then sells it to Sherry. Under these circumstances:

Accepted Answer

A)  Scott retains the power of avoidance of the contract, since he is a minor, even after the property is sold to Sherry. 
B)  if Sherry is a good faith purchaser for value and she buys the camera before Scott elects to rescind, no rescission is permitted. 
C)  Megan and Sherry both received a voidable title regardless of whether they contracted in good faith. 
D)  if Scott wants to rescind the transaction after the sale to Sherry, a good-faith purchaser for value, he has no remedy or recourse. 
A)  Scott retains the power of avoidance of the contract, since he is a minor, even after the property is sold to Sherry. 
B)  if Sherry is a good faith purchaser for value and she buys the camera before Scott elects to rescind, no rescission is permitted. 
C)  Megan and Sherry both received a voidable title regardless of whether they contracted in good faith. 
D)  if Scott wants to rescind the transaction after the sale to Sherry, a good-faith purchaser for value, he has no remedy or recourse.

Question 19

According to the "American Rule," when contracting parties litigate over a breach:

Accepted Answer

A)  each party pays its own attorney fees, regardless of who wins. 
B)  attorney fees are considered consequential damages. 
C)  the losing party has to pay the winner's attorney fees. 
D)  a provision for attorney fees in the written contract will not be given effect. 
A)  each party pays its own attorney fees, regardless of who wins. 
B)  attorney fees are considered consequential damages. 
C)  the losing party has to pay the winner's attorney fees. 
D)  a provision for attorney fees in the written contract will not be given effect.

Question 20

Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500. When Carolyn discovers that her cousin wants it too, she breaks the contract with Marianne. Marianne can ask the court to order:

Accepted Answer

A)  injunctive relief. 
B)  specific performance. 
C)  restitution. 
D)  equitable rescission. 
A)  injunctive relief. 
B)  specific performance. 
C)  restitution. 
D)  equitable rescission.

Exam 18: Contract Remedies

Damages for reliance include expenses for:

When will a court enforce a liquidated damage clause? When will a court refuse to enforce one?

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

Restitution can be obtained where a voidable contract is avoided.

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

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.

Deanne contracts with Leonard to paint her barn in two weeks. If Leonard breaches the contract, Deanne can elect the remedy of damages or the remedy of injunctive relief to prevent Leonard from providing his painting services for anyone else until he paints her barn.

Restitution requires a return of value to the aggrieved party.

Punitive damages are not always awarded as a deterrent in breach of contract cases.

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?

Even if a party has the power to avoid a contract for lack of capacity, duress, or undue influence, the party will lose that power by affirming the contract.

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:

Incidental damages are those that arise directly out of the breach.

Which of the following is NOT true regarding specific performance?

Explain consequential damages. Give an example.

Courts of equity will grant specific performance of contracts for personal services.

Scott, a minor, sells his digital camera to Megan, who then sells it to Sherry. Under these circumstances:

According to the "American Rule," when contracting parties litigate over a breach:

Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500. When Carolyn discovers that her cousin wants it too, she breaks the contract with Marianne. Marianne can ask the court to order:

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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