Exam 12: Contractual Remedies

Luis contractually agreed to sell a widget to Monica for $20 000.Monica accepted delivery of the widget,but has paid only $13 000.Although neither party realized it when they created their contract,the widget is actually worth $23 000.A court will order Monica to pay Luis

Mayo committed a breach of contract against Dirk.After ordering Mayo to compensate Dirk for the losses that he suffered,the judge also ordered Mayo to pay an additional $10 000 to Dirk.These facts most likely demonstrate the concept of

Because of the need for commercial certainty,a court will award expectation damages only if the value of the plaintiff's loss can be calculated with precision.

A court will award punitive damages only if the plaintiff is not entitled to expectation damages.

You deliver the final payment of rent to your landlord,Jimmy.Because of a post office error,the money ends up next door at Fred's house.Fred refuses to give the money back.What action do you have against Fred?

Alexi agreed to sell a particular type of car to Carole for $15 000.He breached the contract by refusing to deliver the car and complete the sale.She bought another car of the same type from Ivan for $18 000.These facts most clearly illustrate the concept of

Savannah agreed to buy a car from Rhett for $10 000.Savannah paid the price,but Rhett refused to perform the contract after he discovered that the vehicle was really worth $17 000.At the time that the contract was created,neither he nor Savannah was aware of the vehicle's actual value.Which of the following statements is TRUE?

Wendy was fired from her job for reasons that violated her contract.She began a process of suing her employer for breach of contract and does not attempt to find a new job.Wendy made approximately $3000 a month and the case is decided 6 months after her termination.Which of the following is true?

Irma was in a contract for the purchase of two tickets to Disneyland for which she had already paid.The contract was breached the day before she was supposed to leave and caused Irma to buy another set of tickets for twice the price,as well,her mother,who was supposed to come as well,could not.Irma could not receive damages for

Munchable Catering Company contractually agreed to cater Indira's wedding for a price of $25 000.Because Indira was anxious for everything to go just right on her wedding day,she insisted that the agreement contain a clause that said that,if Munchable breached the contract,it would be required to pay damages of $250 000.Tarik,the owner-operator of Munchables,agreed to the insertion of that clause because he was (1)new to the business,(2)very confident that he would perform exactly as required,and (3)easily persuaded.Two weeks before the wedding,however,disaster struck.Tarik was hospitalized with a mysterious illness.He immediately called Indira and explained that he would not be able to fulfill the contract.Indira became hysterical and demanded payment of $250 000.She eventually calmed down and was able to hire a replacement caterer at a price of $35 000.The wedding then occurred precisely as Indira had long hoped.She nevertheless still wants to sue Tarik for as much money as possible.Which of the following statements is most likely to be TRUE if a judge decides the case?

Widgets are manufactured by very few companies and they are often difficult to locate.On January 1,Alpha Corp contractually agreed to sell a widget to Beta Inc.Beta paid the total purchase price of $30 000 immediately.The contract required Alpha to deliver the widget on April 1.On March 25,Alpha contacted Beta and announced that it would not be able to deliver the widget.By that time,the cost of a widget had increased to $50 000.On March 28,Beta paid $2000 to an independent firm to locate an alternative widget supplier.That firm suggested Gamma Ltd.On March 30,Beta paid $50 000 to Gamma Ltd to deliver a widget by April 1.A court would probably order Alpha to pay Beta

Provide two reasons as to why courts generally award monetary damages,rather than specific performance,if one party breaks a sales contract by refusing to make delivery.

Berner Building Inc agreed to build a house to certain specifications for Kendra.The total contract price was $500 000.A term in that contract required Berner to use marble from a certain region in northern Italy in the main bathroom.By mistake,Berner used marble from a region in southern Italy instead.The value of the marble was the same in either event.Kendra nevertheless is unhappy.Because she had once enjoyed a wonderful honeymoon in northern Italy,she was very upset that her demands were not met.She insists that Berner should be required to renovate her bathroom using proper materials.That job would cost $25 000 and it would not increase the value of the house at all.Is Kendra entitled to any remedy? Explain your answer.

Dave was contractually required to deliver a widget to Pam by July 1.He failed to do so.At that point,Pam predicted that she would suffer a loss of $100 000 during the next six months because her factory cannot operate efficiently without a widget.Which of the following statements is TRUE?

On June 1,Sergei contractually agreed to purchase a widget from Marisa.The total price was $15 000.Sergei paid $5000 immediately and promised to pay the remainder upon delivery.Although Marisa was required to deliver on July 15,she refused to do so.The market value of the widget was $15 000 on June 1,but $22 000 on July 15.Sergei is entitled to receive $12 000 in expectation damages.

Remington Construction enters into a contract with Royal Condominiums to build a new apartment building.Before receiving payment,Remington puts $100 000 into pouring the foundation.Royal breaches the contract by missing a payment.Which of the following is true?

The courts often award cost of cure damages in order to punish the defendant for acting outrageously.

Slodder Construction Co entered into a contract with the City of Lowey.It agreed to build a tunnel under city hall in exchange for a total price of $5 million.Shortly after beginning the project,Slodder realized that it had entered into a very bad bargain.The job was much more difficult than initially expected.It would cost $15 million to complete.Slodder nevertheless carried on in order to protect its reputation.Somewhat surprisingly,however,after half the tunnel had been finished,Lowey breached the contract by refusing to give Slodder access to the worksite.At that point,the city had already paid $2.5 million to Slodder,and Slodder had already spent $7.5 million on the project.Before trial,another construction company completed the tunnel under a separate contract with the city.Is Slodder entitled to receive any more money from the city in the form of expectation damages or reliance damages? Explain your answer.Is there any other basis upon which Slodder can claim a remedy from Slowey? If so,how much will that remedy be worth? Explain your answer.

On March 1,Joe contractually agreed to purchase an antique family heirloom from his third cousin,Maureen,for $40 000.Joe paid half of that price immediately and promised to pay the other half upon delivery.Maureen promised to deliver the heirloom on May 1.On April 1,another member of the family discovered that the heirloom had not belonged to a famous ancestor,as everyone had believed,but rather to that person's half-brother.The market value of the heirloom consequently dropped to $10 000.Maureen nevertheless refuses to deliver it as promised.Joe is entitled to

On June 1,Lauto Inc contractually agreed to buy a Pupmobile LX from Dos Motors Ltd for $25 000.Payment of the price and delivery of an appropriate vehicle were scheduled to occur on July 15.On July 1,however,Dos informed Lauto that it had carelessly crushed its only Pupmobile LX with an industrial-sized garbage bin.Dos apologized profusely and explained that it did not have another one in stock.It also informed Lauto that,because a Pupmobile LX had recently appeared in a highly successful movie,such cars were in great demand."If you still want one," said the manager at Dos,"you had better act quickly.I'll expect that they will start to go up in value very quickly." Between July 1 and July 10,Lauto could have agreed to purchase a Pupmobile LX from another dealer for $30 000.Nevertheless,Lauto waited until July 11 before buying a Pupmobile LX from Tertius Motors Ltd for $35 000.By July 15,the market value of such vehicles had increased to $40 000.A court would probably order Dos to pay Lauto