Question 1

Generally,reasonable liquidated damage clauses will be enforced:

Accepted Answer

A)  when actual damages are easily determined. 
B)  when actual damages are difficult to determine. 
C)  almost always. 
D)  only in real estate sales contracts. 
A)  when actual damages are easily determined. 
B)  when actual damages are difficult to determine. 
C)  almost always. 
D)  only in real estate sales contracts. B

Question 2

In breach of the partnership agreement,Trimble,a partner in the partnership of Morris,Newt,and Oppie,Ltd.quits the partnership and goes to work for a competitor.The former partners may ask the court for:

Accepted Answer

A)  specific performance requiring Trimble to return to work for Morris, Newt, and Oppie, Ltd. 
B)  an injunction to prevent Trimble from working in competition with the former partners. 
C)  special damages under the rule of Hadley v. Baxendale. 
D)  liquidated damages as compensation for the breach. 
A)  specific performance requiring Trimble to return to work for Morris, Newt, and Oppie, Ltd. 
B)  an injunction to prevent Trimble from working in competition with the former partners. 
C)  special damages under the rule of Hadley v. Baxendale. 
D)  liquidated damages as compensation for the breach. B

Question 3

Expectation interest can best be described as money spent in reliance upon the agreement.

Accepted Answer

A) True 
 B)False  False

Question 4

Mulligan Domestics Co.breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills,although the fabric met the contract specifications.Wellington:

Accepted Answer

A)  has at least four remedies under the UCC. 
B)  may resell the goods to someone else and, if it sues Mulligan, Wellington will be assured of being awarded the difference between the original contract price with Mulligan and the price received from the resale. 
C)  may choose not to resell the fabric and settle for the difference between the contract price and the market value. 
D)  would be awarded consequential damages by most courts. 
A)  has at least four remedies under the UCC. 
B)  may resell the goods to someone else and, if it sues Mulligan, Wellington will be assured of being awarded the difference between the original contract price with Mulligan and the price received from the resale. 
C)  may choose not to resell the fabric and settle for the difference between the contract price and the market value. 
D)  would be awarded consequential damages by most courts.

Question 5

Compensatory damages are typically assessed against the breaching party:

Accepted Answer

A)  as a penalty for breaching the contract. 
B)  only under the UCC when the sale of goods is the subject of the contract. 
C)  to put the non-breaching party in the position it would have been in had the contract never been formed. 
D)  to put the non-breaching party in the position it would have been in if the contract hadn't been breached. 
A)  as a penalty for breaching the contract. 
B)  only under the UCC when the sale of goods is the subject of the contract. 
C)  to put the non-breaching party in the position it would have been in had the contract never been formed. 
D)  to put the non-breaching party in the position it would have been in if the contract hadn't been breached.

Question 6

The remedy of reformation:

Accepted Answer

A)  applies only when money damages are inadequate. 
B)  can be used to correct mistakes in the original contract 
C)  is available if fraud is involved. 
D)  is a commonly used remedy. 
A)  applies only when money damages are inadequate. 
B)  can be used to correct mistakes in the original contract 
C)  is available if fraud is involved. 
D)  is a commonly used remedy.

Question 7

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days.The parties negotiated and meant to say in the written agreement,delivery in 50 days.If the two cannot settle this dispute,and Archie still wants to deliver the champagne,then Archie should sue for the remedy of:

Accepted Answer

A)  reformation. 
B)  rescission. 
C)  restitution. 
D)  reliance. 
A)  reformation. 
B)  rescission. 
C)  restitution. 
D)  reliance.

Question 8

Ralph is a professional football player.He signs a valid contract with the Jets.Later,the Giants offer him more money,so he signs a contract with them.If the Jets sue Ralph,the most likely result would be?

Accepted Answer

A)  The court will order Ralph to play with the Jets. 
B)  The court will order Ralph to play with the Jets, but Ralph is entitled to be paid the amount he negotiated under the Giants contract. 
C)  The court will enjoin Ralph from playing with any team other than the Jets. 
D)  The court will order Ralph to pay compensatory damages in the amount of the difference between the two contracts. 
A)  The court will order Ralph to play with the Jets. 
B)  The court will order Ralph to play with the Jets, but Ralph is entitled to be paid the amount he negotiated under the Giants contract. 
C)  The court will enjoin Ralph from playing with any team other than the Jets. 
D)  The court will order Ralph to pay compensatory damages in the amount of the difference between the two contracts.

Question 9

Nominal damages are awarded in contract cases in which a damage amount was named in the contract.

Accepted Answer

A) True 
 B)False

Question 10

A contract clause which specifies the amount of damages to be paid in the event of a breach is called:

Accepted Answer

A)  a covenant of damages clause. 
B)  a reliance interest of damages clause. 
C)  a liquidated damages clause. 
D)  an incidental damages clause. 
A)  a covenant of damages clause. 
B)  a reliance interest of damages clause. 
C)  a liquidated damages clause. 
D)  an incidental damages clause.

Question 11

In a promissory estoppel case,a court will generally award:

Accepted Answer

A)  only reliance damages. 
B)  specific performance. 
C)  both reliance and punitive damages. 
D)  only nominal damages. 
A)  only reliance damages. 
B)  specific performance. 
C)  both reliance and punitive damages. 
D)  only nominal damages.

Question 12

Specific performance is available when the subject matter of the contract is unique.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of incidental damages you might be awarded if you are wrongfully terminated from your job?

Accepted Answer

A)  The costs of psychological counseling. 
B)  The costs of mailing resumes to prospective employers. 
C)  The costs of a new wardrobe for future interviews. 
D)  The costs of cosmetic surgery. 
A)  The costs of psychological counseling. 
B)  The costs of mailing resumes to prospective employers. 
C)  The costs of a new wardrobe for future interviews. 
D)  The costs of cosmetic surgery.

Question 14

Which of the following statements is incorrect concerning liquidated damages?

Accepted Answer

A)  A liquidated damages clause will be enforced if, when the contract was made, it was difficult to estimate actual damages. 
B)  The amount of liquidated damages must be a reasonable estimation of the actual harm resulting from a breach. 
C)  Nominal damages are not the same thing as liquidated damages. 
D)  Liquidated damages are enforceable even if the amount is considered to be a penalty on the breaching party. 
A)  A liquidated damages clause will be enforced if, when the contract was made, it was difficult to estimate actual damages. 
B)  The amount of liquidated damages must be a reasonable estimation of the actual harm resulting from a breach. 
C)  Nominal damages are not the same thing as liquidated damages. 
D)  Liquidated damages are enforceable even if the amount is considered to be a penalty on the breaching party.

Question 15

Under the UCC,the buyer is entitled to consequential damages if the seller could have reasonably foreseen them.

Accepted Answer

A) True 
 B)False

Question 16

Most courts hold that a seller of goods is not entitled to consequential damages.

Accepted Answer

A) True 
 B)False

Question 17

The Milicic v.Basketball Marketing Company,Inc.case illustrated the proper use of a preliminary injunction.

Accepted Answer

A) True 
 B)False

Question 18

Larry purchased a Leisure Lawnmower because the company salesperson intentionally misled him by assuring him that the mower was self-propelled,had a mulching feature,and had a five-year unlimited manufacturer's warranty.When Fred finds out that his new Leisure Lawnmower is not self-propelled,does not mulch,and has a 90-day warranty,he may successfully sue for:

Accepted Answer

A)  reformation of the contract only. 
B)  restitution only. 
C)  restitution and possibly punitive damages. 
D)  compensatory damages only. 
A)  reformation of the contract only. 
B)  restitution only. 
C)  restitution and possibly punitive damages. 
D)  compensatory damages only.

Question 19

Liquidated damages are awarded to parties who have experienced an injury to their legal rights but have no actual loss.

Accepted Answer

A) True 
 B)False

Question 20

Bob,a house builder,contracts with Ollie to build a house on Ollie's lot.The total price of the construction is $100,000,$20,000 of which will be Bob's profit.After Bob has put $10,000 worth of materials into the house,Ollie wrongfully refuses to let him finish the house.If Bob sues for damages,he will be able to collect:

Accepted Answer

A)  $10,000. 
B)  $20,000. 
C)  $30,000. 
D)  $100,000. 
A)  $10,000. 
B)  $20,000. 
C)  $30,000. 
D)  $100,000.

Exam 18: Remedies

Generally,reasonable liquidated damage clauses will be enforced:

In breach of the partnership agreement,Trimble,a partner in the partnership of Morris,Newt,and Oppie,Ltd.quits the partnership and goes to work for a competitor.The former partners may ask the court for:

Expectation interest can best be described as money spent in reliance upon the agreement.

Mulligan Domestics Co.breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills,although the fabric met the contract specifications.Wellington:

Compensatory damages are typically assessed against the breaching party:

The remedy of reformation:

Ralph is a professional football player.He signs a valid contract with the Jets.Later,the Giants offer him more money,so he signs a contract with them.If the Jets sue Ralph,the most likely result would be?

Nominal damages are awarded in contract cases in which a damage amount was named in the contract.

A contract clause which specifies the amount of damages to be paid in the event of a breach is called:

In a promissory estoppel case,a court will generally award:

Specific performance is available when the subject matter of the contract is unique.

Which of the following is an example of incidental damages you might be awarded if you are wrongfully terminated from your job?

Which of the following statements is incorrect concerning liquidated damages?

Under the UCC,the buyer is entitled to consequential damages if the seller could have reasonably foreseen them.

Most courts hold that a seller of goods is not entitled to consequential damages.

The Milicic v.Basketball Marketing Company,Inc.case illustrated the proper use of a preliminary injunction.

Liquidated damages are awarded to parties who have experienced an injury to their legal rights but have no actual loss.

Introduction To Law

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Dispute Resolution

Common Law,Statutory Law,And Administrative Law

Constitutional Law

Intentional Torts And Business Torts

Negligence And Strict Liability

Crime

International Law

Introduction To Contracts

Agreement

Consideration

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Capacity And Consent

Written Contracts

Third Parties

Performance And Discharge

Practical Contracts

Introduction To Sales

Ownership And Risk

Warranties And Product Liability

Performance And Remedies

Secured Transactions

Creating A Negotiable Instrument

Liability For Negotiable Instruments

Accountants' Liability

Agency Law

Employment Law

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Starting A Business

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Life And Death Of A Corporation

Corporate Management

Shareholders

Securities Regulation

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Planning For The Future: Wills,Trusts,And Insurance

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