Exam 18: Breach of Contract and Remedies

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

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

Quicksilver Delivery Service contracts to deliver Pete's Pizza Parlor's products to its customers for $5,000, payable in ad?vance. Pete's pays the money, but Quicksilver fails to perform. Can Pete's rescind the contract? Can Pete's also ob?tain restitution? What does it mean to "rescind" a contract? How is a contract rescinded? What is restitution? How is restitution accom?plished? Explain.

The purpose of the doctrine of election of remedies is to permit a double recovery.

For Petra to recover the benefit of her bargain from a breached real estate contract with Quality Properties, Inc., the most appropriate remedy is

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

In a contract for a sale of land, the usual remedy is specific performance.

Punitive damages are almost never available in contract disputes.

Bret contracts to work for City Construction Corporation (CCC) dur?ing July for $4,500. On June 30, CCC cancels the contract. Bret declines a similar job with Downtown Builders, Inc., which would have paid $4,000. Bret files a suit against CCC. As compensatory damages, Bret can recover

Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000. Eastside fails to go through with the deal on the agreed date, when the market price of the land is $17,000. DA may recover

Nominal damages normally establish that the defendant acted wrongly.

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

Mona contracts to repair a computer for NuData, Inc. (NDI). Mona knows that without the computer, NDI will lose a sale. Mona does not perform as promised. NDI files a suit against Mona. As consequential damages, NDI can recover

Home Delivery Corporation and Interstate Transport, Inc., sign an agree?ment that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti?mate but approximately $1,000." This is

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

Liquidated damages are damages that are certain in amount.

Liquidated damage clauses typically require a party who breaches a con?tract to pay a certain amount to the nonbreaching party.

Specific performance is the remedy customarily used when one party has breached a contract for the sale of goods.

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 sus?pend 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?

A party who knowingly accepts defective performance of a contract waives the breach.