Deck 13: Breach and Remedies

Question 1

The measure of damages for breach of a construction contract depends on which party breaches and when.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

Punitive damages are recoverable in contract law for an intentional breach of contract.

Answer 3

False

Question 4

The measure of damages for the breach of a contract for a sale of land de-pends on which party breaches and when.

Question 5

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.

Question 6

Compensatory damages compensate an injured party for damages arising from the loss of a bargain caused by a breach of contract.

Question 7

A breach of contract entitles the nonbreaching party to sue for monetary damages.

Question 8

Ordinarily,the remedy for a seller's breach of a contract for a sale of real estate is damages.

Question 9

Punitive damages are generally available in contract disputes.

Question 10

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

Question 11

A party seeking to recover compensatory damages cannot also recover in-cidental damages.

Question 12

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

Question 13

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

Question 14

Consequential damages are awarded to cover all of the remote conse-quences of whatever injury a nonbreaching party suffers.

Question 15

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.

Question 16

If a party breaches a contract,the other party can choose one or more of several remedies.

Question 17

Expenses that are caused directly by a breach of contract-such as those in-curred to obtain performance from another source-are compensatory dam-ages.

Question 18

Special damages are awarded for damage caused by special circumstances beyond a contract.

Question 19

The measurement of compensatory damages for breach of contract is the same for all types of contracts.

Question 20

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

Question 21

When a breach of contract occurs,the innocent injured party has a duty to mitigate the damages.

Question 22

Liquidated damages provisions are usually not enforceable.

Question 23

A liquidated damages provision specifies that a certain amount to be paid in the event of a future default or breach of contract.

Question 24

A party seeking to recover in quasi contract must show that he or she has been unjustly enriched.

Question 25

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

Question 26

Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week.When Handy cancels the contract,Ilsa spends $100 to obtain a similar job that pays $450 per week for a year.Ilsa is entitled to recover

A)the amount of the wages that Handy promised only.
B)the difference between the wages at the two jobs only.
C)the difference between the wages at the two jobs plus $100.
D)$100 only.

Question 27

Hybrid Corporation enters into a contract with Insure Service,Inc.(ISI),to obtain health insurance for Hybrid employees.If ISI breaches the contract and Hybrid is awarded compensatory damages,the purpose would be to

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

Question 28

A contract may include a clause stating that no damages can be recovered for a certain type of breach.

Question 29

The failure of one party to perform a contract entitles the other party to rescind it.

Question 30

A party seeking to recover in quasi contract must show that there was an actual contract or agreement between the parties.

Question 31

Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee Stand chain.The next day,Damien tells Clarice that he has accepted a job in New York and cannot design her campaign.She files a suit against Damien.As compensatory damages,she can recover

A)$100,000.
B)$10,000.
C)$1,000.
D)$0.

Question 32

Quasi contract allows a court to act as if a contract exists when there is no contract.

Question 33

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that the clause excuses.

Question 34

A penalty provision specifies a certain amount to be paid in the event of a default or breach of contract.

Question 35

A liquidated damages provision is the same as a penalty provision.

Question 36

Specific performance is an equitable remedy requiring exactly the performance that was specified in a contract.

Question 37

Even-Flo Hydraulics enters into a contract to repair valves and fittings in Fiesta Company's plant.If Even-Flo breaches the contract,Fiesta can

A)do nothing but make a deal with .a different service provider.
B)do nothing but temporarily suspend operations and wait.
C)file a criminal complaint against Even-Flo.
D)sue Even-Flo for damages.

Question 38

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

Question 39

To rescind a contract,each party essentially advances to the position he or she would have been in if the contract had been fully executed.

Question 40

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

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

Question 41

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

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.

Question 42

Office Accounting,Inc.,hires Perry to repair a computer on site for $400,but Perry does not show up as agreed.Office Accounting hires Raul to do the job for $350.Office Accounting may recover from Perry

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

Question 43

Drew contracts to sell a residential duplex to Evan.The contract pro-vides that if Drew does not close the deal by September 15,he must pay Evan one-half of the contract price.This provision is not enforceable be-cause it is

A)a liquidated damages clause.
B)a mitigation clause.
C)a nominal damages clause.
D)a penalty clause.

Question 44

Sonny agrees to buy a unique collection of Olympics memorabilia for $7,000 from Jana and sends $1,500 as a down payment.When Sonny sends Jana the rest of the price,she refuses to ship the collection.Sonny should seek

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

Question 45

Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corpo-ration.Fresh Food does not pay for the storage.Earl sells the fruit to Green Grocers,Inc.This sale represents

A)a breach of contract.
B)a mitigation of damages.
C)rescission and restitution.
D)specific performance.

Question 46

Rite Contractors,Inc.,agrees to build a motel for Sleep Inn Corporation.The project proceeds according to plan,but before it is done,Sleep tells Rite to quit.Rite may recover

A)the contract price less costs of materials and labor.
B)the contract price.
C)the costs needed to complete construction.
D)profits plus the costs incurred up to the time of the breach.

Question 47

Beachside Pools,Inc.,agrees to build a swimming pool for Candy,but fails to build it according to the contract specifications.Candy hires Do-We Fix-It Company to finish the project.Candy may recover from Beachside

A)the contract price less costs of materials and labor.
B)the contract price.
C)the costs needed to complete construction.
D)profits plus the costs incurred up to the time of the breach.

Question 48

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

Question 49

Cooper's Brakes,Inc.,enters into a contract with Byron's Service to fix Cooper's hydraulic equipment.Byron delays the repair for three days,but is not aware that Cooper loses a certain percentage of profit each day the equipment is out of service.Cooper is most likely to be awarded

A)compensatory damages.
B)nominal damages.
C)punitive damages.
D)no damages.

Question 50

Windstar Heli-Pads,Inc.,enters into a contract to employ Valerie as an on-site project manager for two years.Windstar breaches the contract.Valerie has a duty to

A)do nothing.
B)reduce the damages that Valerie might otherwise suffer.
C)breach the contract with Windstar.
D)sue Windstar to deter others from similar acts.

Question 51

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

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 52

SealCoat Paving enters into a contract with Royal Golf & Tennis Club to provide surface material for Royal's tennis courts by April 1 for a tournament to begin May 1.The contract specifies an amount to be paid if the contract is breached.This is a liquidated damages clause if the amount is

A)meant to pay for additional liquid sealant in the event of damage.
B)a reasonable estimate of the loss on a breach.
C)designed to penalize the breaching party.
D)intended to quickly provide cash to the nonbreaching party.

Question 53

Clutch Auto Parts enters into a contract with Bio Health Club for discounted memberships for Clutch's employees.Bio breaches the contract and Clutch enters into a contract with Apex Fitness for the same service at a lower price.Clutch might be awarded nominal damages to

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

Question 54

Pure Oil Company enters into a contract with QuikBilt,Inc.,to construct an oil pipeline to withstand specific conditions.If QuikBilt fails to meet this standard,which is construed as a breach of contract and a breach of a duty of care,Pure might be awarded punitive damages to

A)establish,as a matter of principle,that QuikBilt acted wrongfully.
B)provide Pure with funds for a foreseeable loss beyond the contract.
C)provide Pure with funds for its loss of the bargain.
D)punish QuikBilt and deter others from similar acts.

Question 55

Vinyl Lynings,Inc.contracts to resurface the insides of the pools at WaterWorld Park.Vinyl Lynings knows that without the resurfacing,WaterWorld will have to delay its season opening.Vinyl Lynings does not perform as promised.As consequential damages,WaterWorld can recover

A)the cost of new pools.
B)the difference between Vinyl Lynings's price and the eventual cost of resurfacing.
C)the loss of profit from the delayed opening.
D)nothing.

Question 56

Fact Pattern 13-1 (Questions 25-26 apply)?Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to subdivide and sell in fifth-acre lots for Pristine Meadow,a residential development.
Refer to Fact Pattern 13-1.If Bella breaches the contract,Watershed's remedy would most likely be

A)a certain ratio of the amount that Bella has in liquidated funds.
B)a percentage of Bella's unrealized profit.
C)the difference between the land's contract and market prices.
D)specific performance.

Question 57

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

A)a liquidated damages clause.
B)a mitigation of damages clause.
C)a nominal damages clause.
D)a penalty clause.

Question 58

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

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

Question 59

Dondi contracts to buy a custom espresso maker from Caffee Specialties,Inc.,for $4,500,but Caffee fails to deliver.Dondi buys the appliance else-where for $5,500.Dondi's measure of damages is

A)$1,000.
B)$1,000 plus incidental damages.
C)incidental damages only.
D)$0.

Question 60

Mother & Daughter Jewelers breaches its lease with Longview Mall and vacates the premises six months before the end of the term.In some states,Longview would have to

A)avoid reletting the premises to recover damages.
B)use reasonable means to find a new tenant to mitigate dam-ages.
C)relet the premises to recover any damages.
D)sell the premises to recover any damages.

Question 61

Ralph contracts to sell his Double-R Ranch to Samantha on May 1.On April 20,Ralph tells Samantha that he will not go through with the deal.Samantha can recover

A)the cost of any property that Samantha would find suitable.
B)the cost of a similar,nearby ranch.
C)the Double-R Ranch.
D)nothing.

Question 62

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

A)in quasi contract.
B)nothing.
C)in restitution.
D)on the parties' existing contract.

Question 63

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?

Question 64

Rough & Ready Timber Company orally contracts with Shawn for the purchase of five acres of Shawn's timberland.Shawn makes the transfer but Rough & Ready does not pay the price.The lack of a written contract could bar enforcement of this deal.If so,Shawn could most likely recover on a theory of

A)reformation.
B)restitution.
C)liquidated damages.
D)quasi contract.

Question 65

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

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

Question 66

Refined Commodities,Inc.,agrees to deliver ten tons of sheet metal to Select Builders Corporation.The agreement states that delivery is to be within "3" days,although the parties intend "30" days.Refined cannot convince Select to amend the contract.Refined should seek

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

Question 67

Lou and Mira want to rescind their contract under which Lou sold an MP3 player to Mira for $50.To rescind the contract

A)Lou must return the $50 and Mira must return the player.
B)Lou must return the $50 only.
C)Mira must return the player only.
D)the parties can keep the "benefits" of their bargain.

Question 68

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 re-fuses 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?

Question 69

A contract between E-Debits,Inc.,and First Credit Corporation includes a provision excluding liability as a result of fraud.This provision is

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

Question 70

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

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

Question 71

Fact Pattern 13-1 (Questions 25-26 apply)?Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to subdivide and sell in fifth-acre lots for Pristine Meadow,a residential development.
Refer to Fact Pattern 13-1.If Watershed breaches the contract,Bella's remedy would most likely be

A)a certain ratio of the amount that Watershed has in liquidated funds.
B)a percentage of Watershed's unrealized profit.
C)the difference between the land's contract and market prices.
D)specific performance.

Question 72

Tristan hires Stefani to perform at Tristan's Club,but she breaches the agreement to accept a higher-paying job at Rock Star Arena.Tristan files a suit against her.The court will most likely

A)award damages to Tristan.
B)cancel Stefani and Rock Star's contract.
C)order Stefani to perform the contract.
D)reform Tristan and Stefani's contract.