Exam 20: Breach of Contract and Remedies

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Cyril made two contracts. The first was to have his house painted one month from the date of the written contract. The second was for his neighbor's 1957 Ford Thunderbird. Each contract was definite and clear in all respects. As to the house painting, Cyril inquired with the painter as to when the work could begin. The painter explained that he was extremely busy and was not sure if he could fulfill the contract. Cyril flew into a rage and immediately hired someone else who painted the house, but at a higher price. Cyril then sued the painter, claiming that there was an anticipatory repudiation of the contract by the painter. With regard to the automobile purchase contract, after signing the contract, the neighbor decided that she did not wish to sell her car and refused to complete the transaction. Cyril attempted to purchase a similar car elsewhere, but the car was a vintage automobile which was not available on the open market. Cyril sued the neighbor for specific performance of the contract. Discuss the probable outcomes of the lawsuits.

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Question 1

Correct Answer:

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Cyril will lose the case against the painter because there was no anticipatory repudiation of the contract. An anticipatory repudiation must be clear, positive, and unequivocal. Merely stating that you are not sure if you can complete a contract does not constitute repudiation.
Cyril will win the lawsuit for specific performance because the car is unique and no adequate remedy in the form of monetary damages is available to Cyril. Cyril cannot simply go out and purchase a similar car elsewhere.

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

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Question 2

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Gregory, a comedy writer, entered into a contract with Wessel, a comedian. The contract provided that Gregory would provide Wessel with a 15-minute monologue for his upcoming appearance on Comedy Hour and that Wessel would pay Gregory $250. All performers on Comedy Hour make $500 per appearance. As Gregory knows, the last time Wessel appeared on Comedy Hour he was asked to make special guest appearances at three local comedy clubs using the same monologue. He earned a total of $750 for the three performances. Shortly before Wessel was scheduled to appear on Comedy Hour, Gregory informed him that he was unable to provide the monologue. As a result, Wessel was forced to cancel his appearance. Wessel sued Gregory for breach of contract and requested damages of $1,250. What will result?

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Question 3

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Judgment will be for Wessel for breach of contract. Damages of $1,250 will be awarded. Wessel is entitled to compensatory damages of $500 to compensate him for the actual loss he sustained when he was unable to appear on Comedy Hour because he had no monologue. In addition, Wessel is entitled to recover $750 in consequential damages. Because Wessel had made special guest appearances as the result of his prior appearance on Comedy Hour, of which Gregory was aware, it was reasonably foreseeable by Gregory that this sort of loss could occur if he breached; accordingly, Gregory is liable for consequential damages.

If a plaintiff's loss involves damaged property, it is described as liquidated damages.

(True/False)

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Question 4

If monetary damages would be an adequate remedy, then an action for specific performance would be appropriate.

(True/False)

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Question 5

A contract provision stating that one of the parties shall not be liable for damages in case of a breach is called a(n) __________ clause.

(Multiple Choice)

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Question 6

Repeated breaches and waivers are generally interpreted to indicate:

(Multiple Choice)

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Question 7

Which is not a correct statement concerning a liquidated damages clause?

(Multiple Choice)

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Question 8

Consequential damages are those that necessarily flow from the breach.

(True/False)

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Question 9

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

(Multiple Choice)

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Question 10

Failure to mitigate damages limits recovery to:

(Multiple Choice)

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Question 11

One party to a contract permitting the other party to continue performance without objecting that the performance is unsatisfactory is an example of a(n):

(Multiple Choice)

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Question 12

Between experienced businesspersons, exculpatory clauses are generally:

(Multiple Choice)

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Question 13

If a seller delivers defective goods, the buyer does not lose the right to object to the breach of contract if the buyer:

(Multiple Choice)

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Question 14

When a party expressly declares before the time for performance arrives that the contract will not be performed, such a declaration is called an anticipatory repudiation.

(True/False)

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Question 15

If there is a breach of contract, the law requires that the other party terminate the contract and bring a lawsuit.

(True/False)

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Question 16

Whether there has been a waiver is a question of fact.

(True/False)

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Question 17

A waiver of a breach may be either express or implied.

(True/False)

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Question 18

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

(True/False)

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Question 19

An injured party who rescinds a contract after having performed services may recover the reasonable value of the performance rendered under restitutionary or quasi-contractual damages.

(True/False)

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Question 20

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Exam 20: Breach of Contract and Remedies

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

If a plaintiff's loss involves damaged property, it is described as liquidated damages.

If monetary damages would be an adequate remedy, then an action for specific performance would be appropriate.

A contract provision stating that one of the parties shall not be liable for damages in case of a breach is called a(n) __________ clause.

Repeated breaches and waivers are generally interpreted to indicate:

Which is not a correct statement concerning a liquidated damages clause?

Consequential damages are those that necessarily flow from the breach.

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

Failure to mitigate damages limits recovery to:

One party to a contract permitting the other party to continue performance without objecting that the performance is unsatisfactory is an example of a(n):

Between experienced businesspersons, exculpatory clauses are generally:

If a seller delivers defective goods, the buyer does not lose the right to object to the breach of contract if the buyer:

When a party expressly declares before the time for performance arrives that the contract will not be performed, such a declaration is called an anticipatory repudiation.

If there is a breach of contract, the law requires that the other party terminate the contract and bring a lawsuit.

Whether there has been a waiver is a question of fact.

A waiver of a breach may be either express or implied.

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

An injured party who rescinds a contract after having performed services may recover the reasonable value of the performance rendered under restitutionary or quasi-contractual damages.

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

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

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 Instruments, Parties, 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

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