Question 1

Damages in excess of actual loss, imposed for the purpose of punishing or making an example of the defendant, are known as compensatory damages.

Accepted Answer

A) True 
 B)False  False

Question 2

If one party to a contract breaks the contract, the other party generally is under a duty to stop any further performance to avoid sustaining greater damages.

Accepted Answer

A) True 
 B)False  True

Question 3

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. D

Question 4

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 5

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 6

The rule of mitigation of damages requires that a party injured by a breach of contract must:

Accepted Answer

A)  take any and all steps possible to reduce the damages that will be sustained because of the breach. 
B)  discharge the contract before filing suit for breach. 
C)  hire someone else to perform the contract. 
D)  take reasonable steps to reduce the damages that would otherwise be sustained because of the breach. 
A)  take any and all steps possible to reduce the damages that will be sustained because of the breach. 
B)  discharge the contract before filing suit for breach. 
C)  hire someone else to perform the contract. 
D)  take reasonable steps to reduce the damages that would otherwise be sustained because of the breach.

Question 7

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 8

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 9

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 10

A firm request for additional payment under an existing contract without refusal to perform until the additional payment is made is considered a repudiation of a contract.

Accepted Answer

A) True 
 B)False

Question 11

The innocent party in a breach of contract, has the duty to mitigate damages at maximum efforts.

Accepted Answer

A) True 
 B)False

Question 12

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 13

The "American rule" states that the losing party in a lawsuit is responsible for all attorney fees.

Accepted Answer

A) True 
 B)False

Question 14

When one party commits a non-material breach of contract, the other party may rescind the contract.

Accepted Answer

A) True 
 B)False

Question 15

Consequential damages are those that necessarily flow from the breach.

Accepted Answer

A) True 
 B)False

Question 16

Repeated breaches and waivers are generally interpreted to indicate:

Accepted Answer

A)  poor business practices. 
B)  illegal behavior. 
C)  ignorance of the law. 
D)  modification of contract. 
A)  poor business practices. 
B)  illegal behavior. 
C)  ignorance of the law. 
D)  modification of contract.

Question 17

When an anticipatory repudiation of a contract occurs, the non-breaching party may do any of the following except:

Accepted Answer

A)  do nothing and wait for performance per the contract. 
B)  immediately declare a breach of contract. 
C)  consider the repudiation as an offer to cancel the contract. 
D)  immediately seek an injunction. 
A)  do nothing and wait for performance per the contract. 
B)  immediately declare a breach of contract. 
C)  consider the repudiation as an offer to cancel the contract. 
D)  immediately seek an injunction.

Question 18

An injured party that does not suffer an actual loss from the breach of a contract is entitled to consequential damages.

Accepted Answer

A) True 
 B)False

Question 19

Failure to mitigate damages limits recovery to:

Accepted Answer

A)  damages that would have been sustained had the plaintiff mitigated the damages where it was possible to do so. 
B)  nominal damages and punitive damages. 
C)  damages for consequential loss. 
D)  exemplary damages. 
A)  damages that would have been sustained had the plaintiff mitigated the damages where it was possible to do so. 
B)  nominal damages and punitive damages. 
C)  damages for consequential loss. 
D)  exemplary damages.

Question 20

In some cases the court may require specific performance, whereby the court will order the contractual performance to be carried out.

Accepted Answer

A) True 
 B)False

Exam 19: Breach of Contract and Remedies

Damages in excess of actual loss, imposed for the purpose of punishing or making an example of the defendant, are known as compensatory damages.

If one party to a contract breaks the contract, the other party generally is under a duty to stop any further performance to avoid sustaining greater damages.

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

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.

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

The rule of mitigation of damages requires that a party injured by a breach of contract must:

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

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

An action for injunctive relief may be granted:

A firm request for additional payment under an existing contract without refusal to perform until the additional payment is made is considered a repudiation of a contract.

The innocent party in a breach of contract, has the duty to mitigate damages at maximum efforts.

Damages in excess of actual loss are called:

The "American rule" states that the losing party in a lawsuit is responsible for all attorney fees.

When one party commits a non-material breach of contract, the other party may rescind the contract.

Consequential damages are those that necessarily flow from the breach.

Repeated breaches and waivers are generally interpreted to indicate:

When an anticipatory repudiation of a contract occurs, the non-breaching party may do any of the following except:

An injured party that does not suffer an actual loss from the breach of a contract is entitled to consequential damages.

Failure to mitigate damages limits recovery to:

In some cases the court may require specific performance, whereby the court will order the contractual performance to be carried out.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters