Deck 17: Remedies

Question 1

Expectation interest refers to what the injured party reasonably thought she would get from the contract.

Answer 1

True

Question 2

Banner enters into a contract with Sylvia to buy her house for $150,000.Sylvia decides later not to sell because she is so emotionally attached to the house.Banner insists that he is entitled to the house.Banner can successfully sue for specific performance.

Answer 2

True

Question 3

Lucky,a contractor,enters into a contract with Penny,a homeowner,to remodel her kitchen.The contract provides a specific completion date.The contract provides that if Lucky does not have the job finished by the date,Penny may deduct $100 per day from the contract price until the job is finished.This is an example of liquidated damages.

Answer 3

True

Question 4

Specific performance may be available for the breach of a contract to sell:

A)an original painting.
B)20 shares of AT&T stock.
C)a red "Radio Flyer" wagon, available at toy stores.
D)All of the above.

Question 5

Dr.Gonzalez ordered specialized surgical equipment from Physician's Supply Co.,but his order was not delivered by the agreed date.Gonzalez is under no obligation to minimize damages since the contract was breached by Physician's Supply,not Gonzalez.

Question 6

The Milicic v.Basketball Marketing Company,Inc.illustrates when courts may order specific performance.

Question 7

Costs to rent a vehicle for a short period of time after an auto dealer fails to deliver a purchased vehicle would be:

A)compensatory damages.
B)incidental damages.
C)consequential damages.
D)punitive damages.

Question 8

A contract clause which specifies the amount of damages to be paid in the event of a breach is called:

A)a specific performance clause.
B)a liquidated damages clause.
C)a consequential damages clause.
D)an incidental damages clause.

Question 9

Injunctions are commonly used by courts to force employees to complete their contractual obligations with their employers.

Question 10

Tess,a tenant,moves from her apartment in breach of the lease agreement.The landlord,Lenny,has no duty to mitigate his damages by attempting to rent the apartment.

Question 11

Under the UCC,the buyer is entitled to consequential damages if the seller could have reasonably foreseen them.

Question 12

The case Toscano v.Greene Music is an example of when reliance damages may be awarded..

Question 13

Most courts hold that a seller of goods is not entitled to consequential damages.

Question 14

Damages must be established with reasonable certainty.

Question 15

Specific performance is available when the subject matter of the contract is unique.

Question 16

Mulligan Domestics Co.breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills,although the fabric met the contract specifications.Wellington:

A)has at least four remedies under the UCC.
B)may resell the goods to someone else and, if it sues Mulligan, Wellington will be assured of being awarded the difference between the original contract price with Mulligan and the price received from the resale.
C)may choose not to resell the fabric and settle for the difference between the contract price and the market value.
D)would be awarded consequential damages by most courts.

Question 17

Ernest operates an ice cream stand during the months of May,June,July,and August.Ernest's ice cream machine is broken and needs a new part to run.He contracts to have the part shipped to him by special carrier.Ernest emphasizes that the part needs to be delivered by April 25 or he will not be able to be open on May 1 as he has advertised.If the shipper fails to deliver the part on April 25,Ernest will be able to recover consequential damages caused by the delay.

Question 18

Nominal damages are awarded in contract cases in which a damage amount was named in the contract.

Question 19

The concept that an injured party may recover consequential damages only if the breaching party should have foreseen them was established in:

A)Bi-Economy Market, Inc.v.Harleysville Ins.Co.of New York.
B)Putnam Construction & Realty Co.v.Byrd.
C)Hadley v.Baxendale.
D)Toscano v.Greene Music.

Question 20

Nominal damages are awarded to parties who have experienced an injury to their legal rights but have no actual loss.

Question 21

Mercury Motors inadvertently mixes up a work order on Peter's car.Peter brought the car in to have the tires rotated.Mercury tuned up the motor by mistake,conferring a benefit on Peter.If Mercury Motors insists that Peter pay for the price of the tune-up,Mercury Motors:

A)can recover its reliance interest.
B)cannot recover its expectation interest because there was no enforceable agreement.
C)will win based on breach of contract.
D)will lose because a personal service contract was involved.

Question 22

Solomon breaches his contract with Neal to purchase the 500 pairs of socks he had promised to buy.Neal is able to sell the 500 pairs to Renny for a much lower amount.Neal then sues Solomon for damages.Neal will be able to recover:

A)the amount in the liquidated damages clause.
B)the difference between Solomon's contract price and the amount paid by Renny.
C)Solomon's contract price.
D)an amount which depends on whether Solomon intentionally breached because he found cheaper socks somewhere else.

Question 23

Fred purchased a Cheapp Lawnmower because the Cheapp Company salesperson intentionally misled him by assuring him that the mower was self-propelled,mulched,and had a five-year unlimited manufacturer's warranty.When Fred finds out that his new Cheapp Lawnmower is not self-propelled,does not mulch,and has a 90-day warranty,he may successfully sue for:

A)reformation of the contract only.
B)restitution only.
C)restitution and possibly punitive damages.
D)compensatory damages only.

Question 24

If a court orders rescission and restitution of a contract under which Nala sold a baseball card to Shirley in exchange for $450:

A)Shirley must return the baseball card.
B)Nala must return the $450.
C)Both a and b.
D)Neither a nor

Question 25

Under the UCC,if a seller of goods breaches the contract,the buyer:

A)must "cover."
B)may receive only the current market value of the goods.
C)may "cover" and then receive the difference between the original contract price and the "cover" price.
D)will be awarded the difference between the original contract price and the market value of the goods if the buyer chooses to "cover."

Question 26

When a court partially "rewrites" a contract,it is:

A)mitigation.
B)rescission.
C)reformation.
D)novation.

Question 27

Farmer Elvin is holding 200 pounds of potatoes in storage for Chef Noble but Chef Noble has breached the contract by failing to pay for the potatoes.The potatoes are beginning to rot.If Farmer Elvin sells the potatoes to a local diner to make potato soup and salad,then this action would be considered:

A)a reasonable mitigation of damages.
B)an attempt to maximize damages.
C)an attempt to realize an unwarranted profit.
D)conversion.

Question 28

Which of the following statements about specific performance is correct?

A)It is an equitable remedy.
B)It is usually ordered in cases involving the sale of land or of a unique object.
C)It forces the parties to perform their contract.
D)All of the above.

Question 29

Bob,a house builder,contracts with Ollie to build a house on Ollie's lot.The total price of the construction is $100,000,$20,000 of which will be Bob's profit.After Bob has put $10,000 worth of materials into the house,Ollie wrongfully refuses to let him finish the house.If Bob sues for damages,he will be able to collect:

A)$10,000.
B)$20,000.
C)$30,000.
D)$100,000.

Question 30

Generally,reasonable liquidated damage clauses will be enforced:

A)when actual damages are easily determined.
B)when actual damages are difficult to determine.
C)almost always.
D)only in real estate sales contracts.

Question 31

In a promissory estoppel case,a court will generally award:

A)only nominal damages.
B)only consequential damages.
C)both reliance and incidental damages.
D)only reliance damages.

Question 32

All Seasons,Inc.ordered $5,000 worth of Christmas decorations from Santa,Inc.The shipment of decorations was to arrive no later than October 1,in time for the Christmas season.The shipment did not arrive until December 1.In spite of the delay,All Seasons covered a third of the order through other suppliers,but had to pay 15% more than the price under contract with Santa,Inc.As a further result of the delay,All Seasons' sales were down 25%.All Seasons can recover:

A)punitive damages.
B)nominal damages.
C)compensatory damages and consequential damages.
D)compensatory damages, consequential damages, and punitive damages.

Question 33

Which of the following is an example of incidental damages you might be awarded if you are wrongfully terminated from your job?

A)The costs of mailing resumes to prospective employers.
B)The costs of psychological counseling.
C)The cost of house payments until he finds a new job.
D)All of the above.

Question 34

Compensatory damages are typically assessed against the breaching party:

A)as a penalty for breaching the contract.
B)when the non-breaching party did not suffer actual loss.
C)to put the non-breaching party in the position it would have been in if the contract hadn't been breached.
D)to cover the minor costs that the injured party suffers when responding to the breach.

Question 35

In the case Orkin Exterminating Company,Inc.v.Jeter,the Court awarded Jeter:

A)nominal damages.
B)both compensatory and punitive damages.
C)reliance damages.
D)liquidated damages.

Question 36

If a court awards nominal damages it will generally:

A)award compensatory damages as well.
B)not make a determination as to whether there has been a breach of the contract.
C)award punitive damages for the intentional breach of the contract.
D)award very little money.

Question 37

Which of the following statements is incorrect concerning liquidated damages?

A)A liquidated damages clause will be enforced if, when the contract was made, it was difficult to estimate actual damages.
B)The amount of liquidated damages must be a reasonable estimation of the actual harm resulting from a breach.
C)Nominal damages are not the same thing as liquidated damages.
D)Liquidated damages are enforceable even if the amount is considered to be a penalty on the breaching party.

Question 38

Ralph is a professional football player.He signs a valid contract with the Jets.Later,the Giants offer him more money,so he signs a contract with them.If the Jets sue Ralph,the most likely result would be?

A)The court will order Ralph to play with the Jets.
B)The court will order Ralph to play with the Jets, but Ralph is entitled to be paid the amount he negotiated under the Giants contract.
C)The court will enjoin Ralph from playing with any team other than the Jets.
D)The court will order Ralph to pay compensatory damages in the amount of the difference between the two contracts.

Question 39

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days.The parties negotiated and meant to say in the written agreement,delivery in 50 days.If the two cannot settle this dispute,and Archie still wants to deliver the champagne,then Archie should sue for the remedy of:

A)reformation.
B)rescission.
C)restitution.
D)reliance.

Question 40

The first step a court takes in choosing a remedy is to determine:

A)what interest it is trying to protect.
B)if the damages can be quantified with reasonable certainty.
C)if punitive damages should be awarded.
D)whether the injured party mitigated its damages.

Question 41

In a construction contract,there is a $1000 per day estimate of damages for each day that the contract runs over the completion date.The contractor is 30 days late when the job is completed,resulting in a prospective damage award of $30,000.What is this type of clause,and when will it be enforced?

Question 42

Identify and describe the four principal contract interests a court may seek to protect.

Question 43

Discuss the purpose of an injunction and how the two types of injunctions covered in the textbook are used.

Question 44

Discuss the remedy of specific performance.

Question 45

Abigail signed a contract to purchase a new car from Wolf's Auto Sales Company.The seller breached its agreement by not delivering the car.Abigail went to another car dealer and purchased the same model of car at the same price.Although she had experienced a legal injury,Abigail has no actual financial or other damages as a result of the breach.If Abigail sues and wins,what type of damages will she be awarded?

Question 46

Larry wanted to buy a 1957 Cadillac once owned by Reggie Jackson.Larry entered into a contract with the owner agreeing to pay $102,000.The owner subsequently changed his mind.If Larry sues,what remedies are potentially available?