Question 1

Damages are designed to punish a breaching party and deter others from similar conduct.

Accepted Answer

A) True 
 B)False  False

Question 2

Fashion Retail Center enters into a contract with Great Promotions,Inc.,to provide Fashion with a plan to retool its merchandising strategy.If Great Promotions breaches the contract,Fashion has a duty to

Accepted Answer

A) reduce the damages that Fashion might otherwise suffer. 
B) reduce the loss that Great Promotions might otherwise suffer. 
C) punish Great Promotions and deter others from similar acts. 
D) take no action. 
A) reduce the damages that Fashion might otherwise suffer. 
B) reduce the loss that Great Promotions might otherwise suffer. 
C) punish Great Promotions and deter others from similar acts. 
D) take no action. A

Question 3

To avoid liability for intentional injuries,Vermont Power Corporation includes in its contracts an exculpatory clause.This is

Accepted Answer

A) enforceable if the other parties are protected from liability. 
B) enforceable if the other parties consent to it. 
C) enforceable if the other parties have equal bargaining power. 
D) not enforceable. 
A) enforceable if the other parties are protected from liability. 
B) enforceable if the other parties consent to it. 
C) enforceable if the other parties have equal bargaining power. 
D) not enforceable. D

Question 4

Lava Excavators,Inc.,needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company.Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000.Mining ships the drill late.Lava can recover

Accepted Answer

A) $13,000. 
B) $10,000. 
C) $3,000. 
D) $0. 
A) $13,000. 
B) $10,000. 
C) $3,000. 
D) $0.

Question 5

Creekside Property Corporation enters into a contract with Downstream Management Associates to manage and maintain Creekside's apartment complex.Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach.This is

Accepted Answer

A) a limitation-of-liability clause. 
B) an exculpatory clause. 
C) an illegal clause. 
D) a quasi contract. 
A) a limitation-of-liability clause. 
B) an exculpatory clause. 
C) an illegal clause. 
D) a quasi contract.

Question 6

Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term.In some states,Sunny would have to

Accepted Answer

A) avoid reletting the premises to recover damages from Ray. 
B) make reasonable efforts to relet the premises to mitigate dam?ages. 
C) relet the premises to recover damages from Ray. 
D) sell the premises to recover damages from Ray. 
A) avoid reletting the premises to recover damages from Ray. 
B) make reasonable efforts to relet the premises to mitigate dam?ages. 
C) relet the premises to recover damages from Ray. 
D) sell the premises to recover damages from Ray.

Question 7

On a contract breach,the nonbreaching party's only option is to refuse to perform.

Accepted Answer

A) True 
 B)False

Question 8

National Drilling Company ships its only pump to American Hydraulics Corporation,the manufacturer,for repair.National hires Overland Transport,Inc.,to take the pump to American Hydraulics and to return it to National as soon as the repair is complete.National is forced to suspend operations without a pump,but Overland does not know this.National expects to be without the pump for five days and to lose profits of $5,000.When the pump is not returned by the end of the fifth day,National rents a pump at a cost of $100 per day.Overland delays five more days before returning the pump.National files a suit against Overland,asking for compensatory,consequential,and punitive damages.Will National recover

Accepted Answer

Yes and no.National will succeed in reco

Question 9

A contract can include a provision stating that no damages can be recovered for certain types of breaches.

Accepted Answer

A) True 
 B)False

Question 10

A party seeking to recover in quasi contract must show that he or she acted without reasonably expecting to be paid.

Accepted Answer

A) True 
 B)False

Question 11

Pam contracts to buy a Quotient-brand computer set-up from Regal Systems for $5,000,but Regal fails to deliver.Pam buys the computer elsewhere for $6,500.Pam's measure of damages is

Accepted Answer

A) $1,500 only. 
B) $1,500 plus incidental damages. 
C) incidental damages only. 
D) $0. 
A) $1,500 only. 
B) $1,500 plus incidental damages. 
C) incidental damages only. 
D) $0.

Question 12

Compensatory damages compensate the nonbreaching party for injuries or damages sustained by that party.

Accepted Answer

A) True 
 B)False

Question 13

The duty owed under the mitigation of damages doctrine depends on the situation.

Accepted Answer

A) True 
 B)False

Question 14

General Equity Corporation enters into a contract with Honi,who agrees to create artwork for General's main office building.Honi delays and eventually refuses to perform.Meanwhile,General contracts to sell the building to Ideal Investments,Inc.,but before the transaction is complete,Jewel Funds Company offers to pay a higher price.General refuses to transfer the building to Ideal.In separate suits by General against Honi and by Ideal against General,each plaintiff seeks specific performance.How might the court rule in each case,and why

Accepted Answer

Generally,the equitable remedy of specif

Question 15

Compensatory damages are foreseeable damages that arise from a party's breach of a contract.

Accepted Answer

A) True 
 B)False

Question 16

Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment.When Ira sends her the rest of the price,Jane refuses to ship Ira the collection.Ira should seek

Accepted Answer

A) damages. 
B) reformation. 
C) rescission. 
D) specific performance. 
A) damages. 
B) reformation. 
C) rescission. 
D) specific performance.

Question 17

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 18

Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch.If Hollis breaches the contract,Grady's normal remedy would be

Accepted Answer

A) damages. 
B) quasi contract. 
C) reformation. 
D) specific performance. 
A) damages. 
B) quasi contract. 
C) reformation. 
D) specific performance.

Question 19

A breach of contract may entitle the innocent party to rescind the contract.

Accepted Answer

A) True 
 B)False

Question 20

If a party breaches a contract,the other party can file a criminal complaint

Accepted Answer

A) True 
 B)False

Exam 16: Breach and Remedies

Damages are designed to punish a breaching party and deter others from similar conduct.

Fashion Retail Center enters into a contract with Great Promotions,Inc.,to provide Fashion with a plan to retool its merchandising strategy.If Great Promotions breaches the contract,Fashion has a duty to

To avoid liability for intentional injuries,Vermont Power Corporation includes in its contracts an exculpatory clause.This is

Lava Excavators,Inc.,needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company.Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000.Mining ships the drill late.Lava can recover

Creekside Property Corporation enters into a contract with Downstream Management Associates to manage and maintain Creekside's apartment complex.Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach.This is

Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term.In some states,Sunny would have to

On a contract breach,the nonbreaching party's only option is to refuse to perform.

A contract can include a provision stating that no damages can be recovered for certain types of breaches.

A party seeking to recover in quasi contract must show that he or she acted without reasonably expecting to be paid.

Pam contracts to buy a Quotient-brand computer set-up from Regal Systems for $5,000,but Regal fails to deliver.Pam buys the computer elsewhere for $6,500.Pam's measure of damages is

Compensatory damages compensate the nonbreaching party for injuries or damages sustained by that party.

The duty owed under the mitigation of damages doctrine depends on the situation.

Compensatory damages are foreseeable damages that arise from a party's breach of a contract.

Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment.When Ira sends her the rest of the price,Jane refuses to ship Ira the collection.Ira should seek

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

Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch.If Hollis breaches the contract,Grady's normal remedy would be

A breach of contract may entitle the innocent party to rescind the contract.

If a party breaches a contract,the other party can file a criminal complaint

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