Question 1

In a contract for a sale of goods,the usual measure of compensatory dam?ages is the difference between the contract price and the market price.

Accepted Answer

A) True 
 B)False

Question 2

A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.

Accepted Answer

A) True 
 B)False

Question 3

Normally,when a nonbreaching party has been damaged by a breach of contract,he or she does NOT have a duty to mitigate those damages.

Accepted Answer

A) True 
 B)False

Question 4

Phil enters into a contract to hire Bob's Building Business to build a warehouse for Phil.The contract specifies that the warehouse should be built with HighQual Bricks.When construction starts,HighQual Bricks cannot provide enough bricks for the warehouse.Bob's Building Business substitutes Big Red Bricks,which are comparable in quality and price to HighQual Bricks.This deviation from the contract

Accepted Answer

A) discharges Phil from the contract. 
B) has no effect on the contract. 
C) increases Bob's Building Business's duties under the contract. 
D) suspends Bob's Building Business's duty to perform. 
A) discharges Phil from the contract. 
B) has no effect on the contract. 
C) increases Bob's Building Business's duties under the contract. 
D) suspends Bob's Building Business's duty to perform.

Question 5

Kris contracts to work exclusively for Little Manufacturing Company during May for $5,000.On April 30,Little cancels the contract.Kris finds another job dur?ing May but earns only $3,000.Kris files a suit against Little.As compen?satory damages,Kris can recover

Accepted Answer

A) $3,000. 
B) $2,000. 
C) $1,000. 
D) $0. 
A) $3,000. 
B) $2,000. 
C) $1,000. 
D) $0.

Question 6

The injury suffered by a nonbreaching party due to the breach of a con?tract may be remedied by payment of compensatory damages.

Accepted Answer

A) True 
 B)False

Question 7

Fact Pattern 16-1 (Questions 7-8 apply)
Mutual Company enters into a contract to employ Neil as an investment manager for two years.During the first year,Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.
-Refer to Fact Pattern 16-1.With respect to Mutual's duties,Neil's performance most likely

Accepted Answer

A) discharges Mutual from the contract. 
B) has no effect on Mutual's performance. 
C) increases Mutual's duties under the contract. 
D) suspends Mutual's duty to perform. 
A) discharges Mutual from the contract. 
B) has no effect on Mutual's performance. 
C) increases Mutual's duties under the contract. 
D) suspends Mutual's duty to perform.

Question 8

Dobry Die & Mold,Inc.,enters into a contract with Chet's Refitting Service to fix Dobry's precisely engineered molding equipment.If Chet's delays the repair for five days,knowing that Dobry will lose a certain percentage of profit for the delay,Dobry might be awarded consequential damages to

Accepted Answer

A) establish,as a matter of principle,that Chet's acted wrongfully. 
B) provide Dobry with funds for a foreseeable loss beyond the contract. 
C) provide Dobry with funds for its loss of the bargain. 
D) punish Chet's and set an example to deter others from similar acts. 
A) establish,as a matter of principle,that Chet's acted wrongfully. 
B) provide Dobry with funds for a foreseeable loss beyond the contract. 
C) provide Dobry with funds for its loss of the bargain. 
D) punish Chet's and set an example to deter others from similar acts.

Question 9

Compensatory damages are stipulated in a contract in an amount that the parties believe to be a reasonable estimate of the damages that will occur on a breach.

Accepted Answer

A) True 
 B)False

Question 10

Building Restoration,Inc.(BRI),enters into a contract to refurbish an old train depot for Casual Dining,Inc.,to open as Eat Up Restaurant.If BRI completes most of the work promised in the contract,its performance will be

Accepted Answer

A) absolute. 
B) complete. 
C) material. 
D) substantial. 
A) absolute. 
B) complete. 
C) material. 
D) substantial.

Question 11

Karson orally agrees to pay Jaime to plant and harvest a quarter of Karson's farm acreage for four corn-planting seasons.After Jaime prepares the land and plants the first crop,Karson says that their deal is off.Jaime can most likely recover

Accepted Answer

A) in quasi contract. 
B) in reformation. 
C) in restitution. 
D) on the parties' existing contract. 
A) in quasi contract. 
B) in reformation. 
C) in restitution. 
D) on the parties' existing contract.

Question 12

Kathleen offers to buy Richard's prize stallion for $10,000 only if a licensed veterinarian certifies that the horse is sound for breeding.After inspecting the stallion,the veterinarian concludes that the stallion is sterile and thus not fit for breeding.Kathleen

Accepted Answer

A) must still buy the stallion. 
B) does not have to buy the stallion. 
C) must still buy the stallion,but may pay a lower price. 
D) does not have to buy the stallion,but must buy another horse of similar value from Richard. 
A) must still buy the stallion. 
B) does not have to buy the stallion. 
C) must still buy the stallion,but may pay a lower price. 
D) does not have to buy the stallion,but must buy another horse of similar value from Richard.

Question 13

Compensatory damages compensate the injured party for injuries sustained due to loss of the contract and also punish the party that breached the contract.

Accepted Answer

A) True 
 B)False

Question 14

Tender is a timely offer or expression of willingness to pay a debt or perform an obligation.

Accepted Answer

A) True 
 B)False

Question 15

Rural Utility,Inc.,enters into a contract with Shovel Excavation Service to dig up,replace,and rebury Rural's cables in a certain location.Rural advances Shovel 10 percent of its cost.If the parties rescind the contract,Shovel's refund of the payment would be

Accepted Answer

A) a penalty. 
B) liquidated damages. 
C) restitution. 
D) specific performance. 
A) a penalty. 
B) liquidated damages. 
C) restitution. 
D) specific performance.

Question 16

A novation does NOT require the extinguishing of the old obligation.

Accepted Answer

A) True 
 B)False

Question 17

Roy and Sheila are parties to a contract.They subse?quently agree that Tony should take Roy's place and assume all of his rights and duties under the contract.This is

Accepted Answer

A) a novation. 
B) an accord and satisfaction. 
C) an assignment. 
D) a modification. 
A) a novation. 
B) an accord and satisfaction. 
C) an assignment. 
D) a modification.

Question 18

Super Toolmakers,Inc.,contracts to sell its business to True Hardware Corpo?ration.Before either party has performed,rescission of this con?tract requires

Accepted Answer

A) a mutual agreement to rescind. 
B) consideration. 
C) performance by all of the parties. 
D) an accord and satisfaction. 
A) a mutual agreement to rescind. 
B) consideration. 
C) performance by all of the parties. 
D) an accord and satisfaction.

Question 19

Most contracts are discharged by rescission.

Accepted Answer

A) True 
 B)False

Question 20

Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.

Accepted Answer

A) True 
 B)False

Exam 16: Contract Discharge and Remedies

In a contract for a sale of goods,the usual measure of compensatory dam?ages is the difference between the contract price and the market price.

A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.

Normally,when a nonbreaching party has been damaged by a breach of contract,he or she does NOT have a duty to mitigate those damages.

Kris contracts to work exclusively for Little Manufacturing Company during May for $5,000.On April 30,Little cancels the contract.Kris finds another job dur?ing May but earns only $3,000.Kris files a suit against Little.As compen?satory damages,Kris can recover

The injury suffered by a nonbreaching party due to the breach of a con?tract may be remedied by payment of compensatory damages.

Dobry Die & Mold,Inc.,enters into a contract with Chet's Refitting Service to fix Dobry's precisely engineered molding equipment.If Chet's delays the repair for five days,knowing that Dobry will lose a certain percentage of profit for the delay,Dobry might be awarded consequential damages to

Compensatory damages are stipulated in a contract in an amount that the parties believe to be a reasonable estimate of the damages that will occur on a breach.

Building Restoration,Inc.(BRI),enters into a contract to refurbish an old train depot for Casual Dining,Inc.,to open as Eat Up Restaurant.If BRI completes most of the work promised in the contract,its performance will be

Karson orally agrees to pay Jaime to plant and harvest a quarter of Karson's farm acreage for four corn-planting seasons.After Jaime prepares the land and plants the first crop,Karson says that their deal is off.Jaime can most likely recover

Kathleen offers to buy Richard's prize stallion for $10,000 only if a licensed veterinarian certifies that the horse is sound for breeding.After inspecting the stallion,the veterinarian concludes that the stallion is sterile and thus not fit for breeding.Kathleen

Compensatory damages compensate the injured party for injuries sustained due to loss of the contract and also punish the party that breached the contract.

Tender is a timely offer or expression of willingness to pay a debt or perform an obligation.

Rural Utility,Inc.,enters into a contract with Shovel Excavation Service to dig up,replace,and rebury Rural's cables in a certain location.Rural advances Shovel 10 percent of its cost.If the parties rescind the contract,Shovel's refund of the payment would be

A novation does NOT require the extinguishing of the old obligation.

Roy and Sheila are parties to a contract.They subse?quently agree that Tony should take Roy's place and assume all of his rights and duties under the contract.This is

Super Toolmakers,Inc.,contracts to sell its business to True Hardware Corpo?ration.Before either party has performed,rescission of this con?tract requires

Most contracts are discharged by rescission.

Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.

Introduction to the Law and Our Legal System

Ethics in Business

The Courts and Alternative Dispute Resolution

Constitutional Law

Torts and Cyber Torts

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Introduction to Contracts

Offer and Acceptance

Consideration

Capacity

The Legality of Agreements

Mistakes and Other Contract Defects

Written Contracts

Third Party Rights

E-Contracts

Introduction to Sales and Lease Contracts

Title and Risk of Loss

Performance and Breach

Warranties and Product Liability

Consumer Protection

The Essentials of Negotiability

Transferability and Liability

Checks and Banking in the Digital Age

Agency

Employment and Immigration Law

Discrimination and Labor Law

Sole Proprietorships,partnerships, Limited

Formation and Termination of a Corporation

Management and Ownership of a Corporation

Secured Transactions

Creditors Rights and Remedies

Bankruptcy

Insurance

Morgages and Foreclosures

Personal Property and Bailments

Real Property

Landlord and Tenant

Wills and Trusts

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