Question 1

Which is not a correct statement concerning rescission of a contract?

Accepted Answer

A) ​The breach must be material. 
B) The injured party who rescinds may recover money paid under the contract. 
C) ​The contract remains in effect after the rescission. 
D) ​Rescission is the undoing of the contract. 
A) ​The breach must be material. 
B) The injured party who rescinds may recover money paid under the contract. 
C) ​The contract remains in effect after the rescission. 
D) ​Rescission is the undoing of the contract. C

Question 2

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. D

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

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 5

A reservation of rights is an assertion by a party to a contract that even though a tendered performance is accepted, the right to damages for the nonconformity to the contract is reserved.

Accepted Answer

A) True 
 B)False

Question 6

Which is not a correct statement concerning the remedy of specific performance?

Accepted Answer

A) ​The subject matter of the contract must generally be unique. 
B) An award of monetary damages would be an inadequate remedy. 
C) ​The granting of specific performance is discretionary with the court. 
D) ​It is generally available in all breach of contract cases. 
A) ​The subject matter of the contract must generally be unique. 
B) An award of monetary damages would be an inadequate remedy. 
C) ​The granting of specific performance is discretionary with the court. 
D) ​It is generally available in all breach of contract cases.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

__________ occurs when a party expressly declares that performance will not be made when required.

Accepted Answer

A) ​Anticipatory repudiation. 
B) An injunction. 
C) ​Restitution. 
D) ​A waiver of breach. 
A) ​Anticipatory repudiation. 
B) An injunction. 
C) ​Restitution. 
D) ​A waiver of breach.

Question 9

A contractual provision which states that a waiver of rights will not constitute a modification to the contract is:

Accepted Answer

A) ​not enforceable as being in bad faith. 
B) not enforceable as a violation of law. 
C) ​enforceable by one party only. 
D) ​enforceable. 
A) ​not enforceable as being in bad faith. 
B) not enforceable as a violation of law. 
C) ​enforceable by one party only. 
D) ​enforceable.

Question 10

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

Accepted Answer

A) ​If the clause is enforced, the injured party can collect no more than the amount specified. 
B) If the clause is enforced, the injured party has a choice between compensatory damages or liquidated damages. 
C) ​It must be possible to determine actual damages. 
D) ​The amount of liquidated damages are established by the parties to the contract. 
A) ​If the clause is enforced, the injured party can collect no more than the amount specified. 
B) If the clause is enforced, the injured party has a choice between compensatory damages or liquidated damages. 
C) ​It must be possible to determine actual damages. 
D) ​The amount of liquidated damages are established by the parties to the contract.

Question 11

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 12

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

Accepted Answer

A) ​accepts the goods. 
B) accepts the goods with a reservation of right. 
C) ​agrees to a modification of the contract. 
D) ​accepts the performance without protest. 
A) ​accepts the goods. 
B) accepts the goods with a reservation of right. 
C) ​agrees to a modification of the contract. 
D) ​accepts the performance without protest.

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

Ordinarily, contracts for the performance of personal services are specifically ordered.

Accepted Answer

A) True 
 B)False

Question 16

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?

Accepted Answer

​Judgment will be for Wessel for breach

Question 17

Consequential damages are those that necessarily flow from the breach.

Accepted Answer

A) True 
 B)False

Question 18

In a breach of contract situation, the innocent party has all of the following are remedies available to her, except:

Accepted Answer

A) ​bringing an action for money damages. 
B) rescinding the contract. 
C) ​seeking specific performance. 
D) ​waiver of breach 
A) ​bringing an action for money damages. 
B) rescinding the contract. 
C) ​seeking specific performance. 
D) ​waiver of breach

Question 19

Contract provisions that limit the remedies of the parties are generally unenforceable.

Accepted Answer

A) True 
 B)False

Question 20

A provision in a contract which states no damages can be recovered in the event of breach of contract is called:

Accepted Answer

A) ​a contributory clause 
B) an exculpatory clause 
C) ​a waiver clause. 
D) ​a force majeur clause 
A) ​a contributory clause 
B) an exculpatory clause 
C) ​a waiver clause. 
D) ​a force majeur clause

Exam 19: Breach of Contract and Remedies

Which is not a correct statement concerning rescission of a contract?

Repeated breaches and waivers are generally interpreted to indicate:

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

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

A reservation of rights is an assertion by a party to a contract that even though a tendered performance is accepted, the right to damages for the nonconformity to the contract is reserved.

Which is not a correct statement concerning the remedy of specific performance?

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

__________ occurs when a party expressly declares that performance will not be made when required.

A contractual provision which states that a waiver of rights will not constitute a modification to the contract is:

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

Failure to mitigate damages limits recovery to:

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

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.

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

Ordinarily, contracts for the performance of personal services are specifically ordered.

Consequential damages are those that necessarily flow from the breach.

In a breach of contract situation, the innocent party has all of the following are remedies available to her, except:

Contract provisions that limit the remedies of the parties are generally unenforceable.

A provision in a contract which states no damages can be recovered in the event of breach of contract is called:

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

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Agency

Third Persons in Agency

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