Deck 16: Remedies for Breach of Traditional and E-Contracts

Question 1

Specific performance is the most common remedy for a breach of contract.

Answer 1

False

Question 2

Tender of performance is another term for completion of performance.

Answer 2

False

Question 3

Liquidated damages will be invalidated if they are unreasonably large or small.

Answer 3

False

Question 4

The UCC governs damages for a breach of a sales contract involving goods.

Question 5

A liquidated damages provision will be validated if it is considered to be a penalty.

Question 6

Only those consequential damages that are unforeseeable can be collected.

Question 7

When there is an anticipatory breach,the nonbreaching party's obligations under the contract are discharged immediately.

Question 8

A material breach allows the other party to rescind a contract.

Question 9

When performance is tendered,this will discharge a party's contractual obligations.

Question 10

A buyer can generally recover the additional cost of acquiring substitute goods if the seller breaches by not delivering the goods.

Question 11

The primary goal of compensatory damages is to compensate a nonbreaching party for the loss of the bargain.

Question 12

If an employee breaches an employment contract,the employer can recover the costs incurred to replace the employee,plus any increase in salary paid to the new employee in excess of what would have been paid to the old employee.

Question 13

Lost profits can be recovered as consequential damages only if they are related to an existing established business.

Question 14

Substantial performance constitutes a minor breach of the contract.

Question 15

When there is substantial performance of a contract with a minor breach,the other nonbreaching party may sue to recover the cost to repair the defect.

Question 16

A contractor is generally entitled to recover any lost profits on a contract breached by the client.

Question 17

Mitigation of damages is no longer necessary in the area of employment law.

Question 18

Cases involving nominal damages are generally brought on "principle."

Question 19

When one party materially breaches a contract,the other nonbreaching party is discharged from any further performance.

Question 20

A breach of a contract cannot occur until the time for performance of the duty in question.

Question 21

Specific performance is the primary remedy used to make a party live up to his/her obligations under a personal services contract.

Question 22

A contract that has been fully performed by all parties is said to be:

A) executed
B) tendered
C) mitigated
D) liquidated
E) substantiated

Question 23

When the other party commits an anticipatory breach,the nonbreaching party:

A) must wait until the performance was due before suing
B) is immediately discharged from her own duties
C) is not able to seek damages because she received advance notice of the breach
D) is usually able to seek specific performance

Question 24

If Julia agrees to construct a platinum sailboat with green emeralds all around the bow of the boat and Ted decides to halt construction in the middle of the project,Julia may seek reformation of her contract with Ted to show she really intended to have him put rubies along the bow instead.

Question 25

Reformation permits the court to order the breaching party to perform the acts promised in the contract.

Question 26

When rescinding a contract,the parties must make restitution of the consideration they received under the contract.

Question 27

Intentional interference with contractual relations requires a showing of bad faith before liability can be imposed.

Question 28

Rescission and restitution are designed to give the parties the benefit of the bargain.

Question 29

When one party substantially,but not completely,performs a contract,creating a minor breach,which of the following remedies may the aggrieved party choose?

A) deduct the cost necessary to complete performance from the payment due to the breaching party
B) sue the breaching party for the cost to complete performance
C) rescind the contract
D) A,B,and C
E) A and B only

Question 30

When an employer breaches an employment contract,if the employer offers substitute employment to the employee,the doctrine of mitigation places a duty on the employee to accept the work so long as the employee is capable of doing the work.

Question 31

The downfall of using equitable remedies is that they do not prevent unjust enrichment.

Question 32

What is tender of performance in connection with a contract?

A) one party's completion of duties under the contract
B) a party's offering substitute performance that is superior to the performance called for in the contract
C) performance whose terms have been ordered by the court
D) an unconditional offer by a contracting party to perform his or her obligations under a contract

Question 33

Specific performance is usually available for the buyer in contracts for the sale of land.

Question 34

What distinguishes an anticipatory breach from other breaches?

A) It involves a breach by each party to the contract.
B) It entitles the nonbreaching party to consequential damages.
C) It occurs in connection with substantial performance.
D) It is a foreseeable breach.
E) It occurs prior to the time that performance is due.

Question 35

A minor breach is most directly associated with:

A) strict performance
B) tender of performance
C) complete performance
D) substantial performance
E) inferior performance

Question 36

Equitable remedies are available if there has been a breach of contract that cannot be adequately compensated by a legal remedy.

Question 37

Under which kind(s)of performance by the other party can a party rescind a contract?

A) substantial performance
B) inferior performance
C) both A and B
D) neither A nor B

Question 38

Punitive damages are always available for breach of contract.

Question 39

Many states have held that there is an implied covenant of good faith and fair dealing in certain contracts.

Question 40

The general standard to obtain an injunction is that the party seeking the injunction would suffer irreparable injury without the injunction.

Question 41

A court will not enforce a liquidated damages clause when which of the following is true?

A) The amount specified is too small and considered to be unfair.
B) The amount of actual damages is significantly greater than the amount specified as liquidated damages.
C) The amount was agreed to by the parties prior to the existence of an actual breach.
D) The amount is so large that it is viewed as a penalty.
E) The actual damages are difficult to determine and compare to the amount specified as liquidated damages.

Question 42

Which of the following damages must be foreseeable in order to be collected?

A) consequential
B) nominal and liquidated
C) compensatory,consequential,and punitive
D) consequential and compensatory
E) liquidated and compensatory

Question 43

George,an employee,breaches a fixed-term employment contract by quitting before the end of the term.What can his employer,MNO Inc.,recover as damages?

A) nothing,because courts do not order anyone to perform a job against his or her will
B) all amounts already paid to the employee under the contract
C) only amounts paid to the employee for which the employee has not yet done the work
D) the costs of hiring a replacement employee plus any increase in salary paid to the replacement employee

Question 44

When a client breaches a contract with a construction contractor in the early phase of construction,what is the contractor generally able to recover?

A) the amount of the contract price
B) only the out-of-pocket costs incurred by the contractor up to the time of the breach
C) the amount necessary to provide the same profit to the contractor that the contractor would have earned if the contract were fully performed
D) three times the contract price as punitive damages
E) the amount determined by the court to have been a fair profit on the contract

Question 45

Which of the following types of damages could generally be simultaneously recovered in the same breach of contract action?

A) punitive and compensatory
B) compensatory and liquidated
C) punitive and liquidated
D) compensatory and consequential
E) consequential and liquidated

Question 46

What are liquidated damages in connection with a contract?

A) damages that are used to punish the nonbreaching party
B) damages that are set at a fixed amount in advance in the contract
C) damages that are used when there are no actual damages
D) damages that require approval in advance from the court
E) damages that result in all assets of the breaching party being paid out as damages

Question 47

When,generally,are equitable remedies available?

A) They are usually the first remedy that a court will try to apply.
B) They are required to be used alongside any legal remedy.
C) They are only awarded when a breach of contract case has been appealed.
D) They are used when the legal remedy does not adequately compensate the nonbreaching party.

Question 48

Damages that are fixed in the contract for the amount to be awarded in the event of a breach are known as:

A) punitive damages
B) liquidated damages
C) consequential damages
D) conditional damages

Question 49

When an employer breaches an employment contract,what obligation does the employee have in seeking substitute employment?

A) Because it was the employer who breached,the employee has no obligation to seek substitute employment.
B) The employee must accept any employment available with the same employer,but is not required to accept any substitute employment with a different employer.
C) The employee must accept any employment available with a different employer,but is not required to accept any substitute employment with the same employer.
D) The employee is obligated to accept any employment for which the employee is qualified.
E) The employee is obligated to accept substitute employment only if it is comparable employment.

Question 50

Which is the most basic or common remedy available for the breach of a contract?

A) compensatory damages
B) consequential damages
C) punitive damages
D) nominal damages
E) equitable damages

Question 51

Another term for consequential damages is:

A) special
B) remedial
C) liquidated
D) nominal
E) distinguishable

Question 52

In connection with a contract,what is rescission?

A) a court order to perform one's duties under a contract
B) a return of consideration to the other party
C) an undoing or cancellation of the contract
D) a formation of a second contract identical to the first

Question 53

What does the term "mitigation" refer to in connection with damages?

A) the calculation of lost profits in determining damages
B) the duty of the breaching party to make a damages payment as soon as practical
C) the combination of the different kinds of damages into a single dollar amount
D) the duty of a nonbreaching party to make reasonable efforts to reduce damages
E) the requirement of the nonbreaching party to allow the breaching party one final chance to perform the contract before being entitled to collect damages

Question 54

"Benefit of the bargain" is descriptive of which type of damages?

A) compensatory damages
B) punitive damages
C) reliance damages
D) liquidated damages
E) injunction damages

Question 55

Which of the following is true about rescission and restitution?

A) Rescission and restitution are designed to give the nonbreaching party the benefit of the bargain.
B) Rescission and restitution are the primary and most common remedies for breach of contract.
C) Rescission and restitution can occur separately,but they usually occur together.
D) Rescission and restitution are available only when the subject matter of the contract is unique.

Question 56

What kinds of damages will be awarded when there is no actual financial loss?

A) special damages
B) consequential damages
C) nominal damages
D) compensatory damages
E) There are no damages that a court will award in the absence of an actual financial loss.

Question 57

The general requirements for a liquidated damages clause to be enforceable are which of the following?

A) Actual damages are difficult to determine and the liquidated damages amount is reasonable.
B) Actual damages exceed the amount foreseen by the parties.
C) The liquidated damages clause applies only to unforeseeable damages.
D) The breaching party used its best efforts to avoid a breach of the contract.
E) The parties have rescinded the contract.

Question 58

Which of the following is not a characteristic of consequential damages?

A) They arise from circumstances outside of the contract.
B) They can be recovered in addition to compensatory damages.
C) They can be collected only if they are foreseeable or known to the other party.
D) They are fixed in amount at the time the contract is formed.
E) To be collectible,the breaching party must have known about them or had reason to know about them.

Question 59

What is the general goal of awarding compensatory damages in a breach of contract situation?

A) return the parties to the situation that they were in prior to the contract
B) punish the breaching party for the wrongdoing
C) modify the contract terms to be more equitable to the parties
D) place the nonbreaching party in the same position as if the contract had been fully performed
E) require the breaching party to actually do what was called for in the contract

Question 60

The doctrine that places a duty on a nonbreaching party to take reasonable steps to reduce damages is called:

A) liquidation
B) mitigation
C) garnishment
D) avoidance
E) reciprocal duties

Question 61

Pat Painter contracts to paint Harry Homeowner's home for $6,000.Pat would supply all materials at a cost to Pat of $1,000.Harry breaches by refusing to let Pat paint the house,which Pat found out before spending any money on the materials.Pat is able to find another job that nets a profit of $4,200 during that same time that Harry's house was to be painted.How much can Pat recover from Harry in damages?

A) $1
B) $800
C) $1,800
D) $3,200
E) $5,000

Question 62

Which of the following is true about the recovery of punitive damages in connection with contracts?

A) They are recoverable whenever a breach of contract is intentional.
B) If awarded,they are held by the court to be distributed to other parties with whom the defendant has breached a contract.
C) They can be covered for tortious conduct in connection with a contract,but generally not for the breach of a contract.
D) They are awarded only by an appellate court.

Question 63

Which of the following is not an equitable remedy?

A) specific performance
B) monetary damages
C) reformation
D) injunction
E) quasi contract

Question 64

A construction contractor entered into a contract to build a family room addition onto Harry's home for $25,000.In order to encourage timely performance,the agreement provided that the contractor would be penalized $2,000 as liquidated damages for each day that the project was late in getting finished.The contractor was 30 days late in finishing the project,but otherwise met the terms of the agreement.What is most likely in this situation?

A) The liquidated damages clause would not be enforced due to its being excessive.
B) The liquidated damages clause would be limited to $25,000,the amount of the contract price.
C) The liquidated damages clause would be enforced.
D) The liquidated damages clause would not be enforced because the parties made a mutual mistake about when the contract would be finished.

Question 65

When a court orders specific performance,it:

A) orders monetary damages to be paid by the breaching party to the nonbreaching party
B) modifies the contract terms in order to maximize the fairness to both parties
C) orders a party to a contract to do exactly what was called for in the contract
D) orders a party to return any and all consideration received

Question 66

What is required in order for a court to issue an injunction?

A) Any breach of contract will justify an injunction.
B) Any breach of contract that causes injury to the other party will justify an injunction.
C) Any situation that entitles the award of specific performance will justify an injunction.
D) A showing that the party requesting the injunction would suffer irreparable injury without the injunction will justify an injunction.
E) Proof that the party requesting the injunction would win any breach of contract lawsuit will justify an injunction.

Question 67

Liquidated damages clauses will generally not be enforced where courts view them as excessive,but courts generally do not inquire into whether liquidated damages clauses are too small.For example,when taking a roll of film to be developed,most developers include a liquidated damages clause to provide a new roll of film,and nothing more,in the event that the customer's film is lost or destroyed.Why is there this difference in treatment? Do you agree with this rule?

Question 68

Assume that a car owner contracts with a mechanic to have his engine overhauled.The mechanic mistakenly used original equipment quality piston rings in doing the overhaul,whereas the contract had called for the use of premium-quality rings that are better than original equipment quality.Which of the following is true?

A) This is a substantial performance,and the owner must still pay something to the mechanic.
B) This is a material breach,and the owner must still pay something to the mechanic.
C) This is a substantial performance,and the owner owes nothing to the mechanic.
D) This is a material breach,and the owner owes nothing to the mechanic.
E) This is a novation,and the owner owes nothing to the mechanic.

Question 69

Creative Charlie had sketched plans for an invention,but had not yet built a prototype.He wanted to make sure that the invention could actually be manufactured before going through the expense of applying for a patent.He contracted with a local machine shop to work on the prototypes.As part of the agreement,the machine shop agreed not to disclose any information about the invention.Charlie learned from one of the employees that the owner of the machine shop had successfully built a prototype without telling Charlie and that the owner was going to begin marketing the invention in a joint venture with another firm.Could Charlie get an injunction in this situation?

A) No; this is a situation where the only allowable damages would be liquidated damages.
B) No; Charlie could be adequately compensated with compensatory damages.
C) Yes,assuming that Charlie would likely suffer irreparable harm if others learn of his invention and it becomes public before he can obtain a patent.
D) Yes,because this is an anticipatory breach and injunctions can be issued in connection with any anticipatory breach.

Question 70

Which of the following is NOT one of the required elements of the tort of intentional interference with contractual relations?

A) a valid,enforceable contract between the contracting parties
B) third-party knowledge of this contract
C) third-party inducement to breach the contract
D) malicious intent in inducing the breach

Question 71

Henry took his Porsche to the shop for repairs,but it was not ready on Friday afternoon as had been agreed to.Henry was then unable to rent the car to his sister on Saturday for $400 to use in her wedding.Henry paid $60 to rent a car on Sunday for a trip to the mountains.The car repair shop knew about neither of Henry's planned uses of the car that weekend.Which is true?

A) Henry can collect for neither amount because the car repair shop was unaware of them.
B) Henry can collect for both amounts because the shop was the cause of his losses.
C) Henry can collect for the car rental,but not for the money his sister would have paid.
D) Henry can collect for both amounts and will likely recover punitive damages as well.
E) Henry can collect nothing because his greediness with his sister is against public policy.

Question 72

Painter contracts to paint the interior of Owner's home for $2,000.In each of the following unrelated examples,indicate what amount of damages Owner is entitled to recover from Painter.
A.Painter stops work when halfway finished.Owner pays someone else $1,700,a reasonable amount,to finish the work.Owner has paid Painter $700.
B.Painter stops work when 75 percent finished with the job.Owner pays someone else $1,500,a reasonable amount,to finish the work.Owner has paid Painter $700.
C.Painter stops work when 50 percent finished with the job.Owner pays someone else $1,800 to finish the job,but could have paid yet another person $1,500 to finish it.Owner has paid Painter $700.
D.Painter stops work when 50 percent finished with the job.Painter finds someone who will finish the work for $1,100.However,the delay caused $200 in water damage and Owner missed an opportunity to rent an upstairs apartment in the home for $400 per month.Owner has paid the original painter $1,200 and the new painter $1,100.

Question 73

Specific performance is generally awarded:

A) in cases where nominal damages are also awarded
B) where the contract involves the sale of property that is unique
C) only under the UCC
D) when the nonbreaching party requests it
E) only if provided for in a liquidated damages clause

Question 74

Alice has a contract with a surgeon to have a medical procedure performed on July 17.The surgeon notifies Alice on July 5 that he is in the Bahamas and will be there until the end of August and will not be able to do the surgery.Which of the following is true at this point?

A) There will be no breach until July 17.
B) Alice must wait until July 17,and if the surgeon does not perform the procedure,then Alice can contract with another surgeon.
C) If Alice contracts with another surgeon prior to July 17,and this second surgeon is aware of Alice's original contract,the second surgeon has no obligation to perform.
D) Alice is free to contract with another surgeon.

Question 75

When a court rewrites a contract to express the parties' true intentions,what remedy has it used?

A) reformation
B) restitution
C) specific performance
D) substituted contract
E) quasi-contract

Question 76

Why is the general measure of compensatory damages "benefit of the bargain" rather than a measure based on returning the parties to the position that they were in prior to the contract? What do you think is the best approach?

Question 77

The Smiths hire a contractor to build a home for them.The total cost of the contract is for $110,000.Some of the building materials are delivered,and the contractor refuses to build the house.An alternate contractor agrees to build the house using the same materials for $125,000.Are the Smiths entitled to damages? If so,how much?

A) No; the contract was terminated before construction began and the house was still built.
B) Yes; they are entitled to contract damages in the amount of $15,000.
C) Yes; they are entitled to contract damages in the amount of $110,000.
D) Yes; they are entitled to contract damages in the amount of $125,000.

Question 78

Michelle is hired as a corporate executive for a large corporation.She signed a three-year contract that will pay her $10,000 per month.Six months into the contract,the company unilaterally terminates the contract due to concerns over the company's future.How much money should Michelle be entitled to?

A) $10,000
B) $60,000
C) $300,000
D) $360,000
E) None. The contract was terminated in good faith.

Question 79

Waldo washes windows with Worldwide Window Washers.Waldo has just begun the second year of a 3-year contract that pays him $30,000 per year.Even though Waldo has performed his job perfectly,he was suddenly told that his contract was being terminated.Waldo was offered a couple of other jobs shortly after this contract was terminated.The first was as a custodian in a city 200 miles away paying $24,000 a year.The second was as a cook in a local fast food restaurant paying $22,000 a year.Waldo took neither job.In connection with his duty to mitigate,which of the following is true?

A) Waldo would not be obligated to accept the custodian job.
B) Waldo would not be obligated to accept the cook job.
C) Waldo would be obligated to accept neither job.
D) Waldo would be obligated to accept one of the jobs,but the choice of which one was up to Waldo.
E) Waldo is not obligated to accept any job of any kind for the duration of the contract that was breached.

Question 80

Should there be such a tort as the intentional interference with contractual relations? Even though one person might induce another to breach a contract,isn't it ultimately the choice of that other person to breach the contract? Why should one be liable if that person was not the one who actually breached the contract?