Deck 16: Remedies in Contract

Question 1

Enforcement of contractual rights involves seeking the appropriate remedy.

Answer 1

True

Question 2

Which of the following statements is the best description of 'ordinary' damages?

A) An amount awarded where the innocent party's rights have been infringed but they have suffered no actual loss.
B) An amount awarded to compensate the innocent party for the loss suffered as a result of the breach of contract.
C) An amount awarded to punish the party in breach of the contract.
D) An amount based upon a genuine pre-estimate of actual loss flowing from the breach of contract.

Answer 2

B

Question 3

Which of the following statements is the best description of the remedy of 'restitution'?

A) The injured party is entitled to set aside the contract and be restored to their pre-contractual position.
B) The party at fault is restrained from breaching the contract or from committing a wrongful act.
C) The party at fault is directed to carry out their obligations under the contract.
D) The party at fault has unjustly obtained a benefit at the injured party's expense and is ordered to restore it to the injured party.

Answer 3

D

Question 4

Which of the following statements is the best description of 'exemplary' damages?

A) An amount awarded where the innocent party's rights have been infringed but they have suffered no actual loss.
B) An amount awarded to compensate the innocent party for the loss suffered as a result of the breach of contract.
C) An amount awarded to punish the party in breach of the contract.
D) An amount based upon a genuine pre-estimate of actual loss flowing from the breach of contract.

Question 5

Rescission is a remedy for breach of contract.

Question 6

Which of the following remedies does NOT necessarily require the intervention of the court?

A) Injunction.
B) Restitution.
C) Rescission.
D) Damages.

Question 7

The right to rescind a contract may be lost if:

A) The innocent party fails to act to bring about rescission.
B) It is impossible to restore the parties to their previous positions.
C) The innocent party chooses to continue with the transaction.
D) All of the above.

Question 8

Which of the following statements is the best description of the remedy of' 'rescission'?

A) The injured party is entitled to set aside the contract and be restored to their pre-contractual position.
B) The party at fault is restrained from breaching the contract or from committing a wrongful act.
C) The party at fault is directed to carry out their obligations under the contract.
D) The party at fault has unjustly obtained a benefit at the injured party's expense and is ordered to restore it to the injured party.

Question 9

The case of Hadley v Baxendale (1854) 9 Ex 341 is authority for the principle that breach of contract entitles a plaintiff to:

A) Damages which are a natural consequence of the breach or expressly bought to the attention of the defendant.
B) Damages that are a reasonably direct consequence of the breach of contract.
C) Damages that are reasonably foreseeable based on the actual or constructive knowledge of the defendant.
D) All of the above.

Question 10

Which of the following is NOT one of the requirements which must be satisfied before the remedy of restitution will be granted by a court?

A) It would be unjust to allow the defendant to retain the benefit.
B) The defendant has received a benefit.
C) The benefit to the defendant was at the plaintiff's expense.
D) The plaintiff has suffered loss or damage as a consequence of a breach of the contract.

Question 11

Restitution is a remedy for breach of contract.

Question 12

Why was the plaintiff builder successful in the case of Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221?

A) The work was completed with proper skill and on time.
B) The defendant had repudiated the contract.
C) The defendant had received a benefit from the builder's performance of the contract.
D) The contract was entire and not divisible.

Question 13

Why might the innocent party prefer to obtain rescission as a remedy for breach of contract, rather than an order for damages?

Question 14

Which of the following statements is the best description of the remedy of 'injunction'?

A) The injured party is entitled to set aside the contract and be restored to their pre-contractual position.
B) The party at fault is restrained from breaching the contract or from committing a wrongful act.
C) The party at fault is directed to carry out their obligations under the contract.
D) The party at fault has unjustly obtained a benefit at the injured party's expense and is ordered to restore it to the injured party.

Question 15

Which of the following statements is the best description of the remedy of 'specific performance'?

A) The injured party is entitled to set aside the contract and be restored to their pre-contractual position.
B) The party at fault is restrained from breaching the contract or from committing a wrongful act.
C) The party at fault is directed to carry out their obligations under the contract.
D) The party at fault has unjustly obtained a benefit at the injured party's expense and is ordered to restore it to the injured party.

Question 16

What is the purpose of rescission?

Question 17

Breach of which of the following types of term will entitle the innocent party to damages?

A) A warranty.
B) A condition.
C) An intermediate term.
D) All of the above.

Question 18

Restitution is based on unjust enrichment.

Question 19

Which of the following statements is the best description of the object of damages for breach of contract?

A) To put the parties into the position they would have been in if the contract had been performed.
B) To restore the parties to their pre-contractual position.
C) To put the parties into the position they were in before the contract was breached.
D) To punish the person responsible for the breach.

Question 20

Which of the following statements is the best description of the duty of the injured party to 'mitigate' their loss?

A) They must take all reasonable steps to minimise their loss.
B) They must take all reasonable steps to prevent the breach.
C) They must take all reasonable steps to report the breach to the court.
D) They must take all reasonable steps to transfer the loss to the party in breach.

Question 21

When a person fails to perform their obligations under a contract, why is it that they are not liable to compensate the innocent party for all of the loss and damage arising as a result of their breach?

Question 22

Which of the following statements is the best description of a 'prohibitory' injunction?

A) A court order restraining the defendant from removing or disposing of assets until the court makes a decision.
B) A court order requiring the person to perform some contractual obligation.
C) A court order preventing a breach of contract.
D) A court order which freezes the status quo between the parties until the dispute can be heard by the court.

Question 23

Which of the following statements is the best description of 'unliquidated' damages?

A) An amount awarded where the innocent party's rights have been infringed but they have suffered no actual loss.
B) An amount awarded to punish the party in breach of the contract.
C) An amount awarded to compensate the innocent party for the loss suffered as a result of the breach of contract.
D) An amount not fixed in the contract and left for the court to determine.

Question 24

Which of the following statements is the best description of 'liquidated' damages?

A) An amount not fixed in the contract and left for the court to determine.
B) An amount awarded to compensate the innocent party for the loss suffered as a result of the breach of contract.
C) An amount based upon a genuine pre-estimate of actual loss flowing from the breach of contract.
D) An amount awarded to punish the party in breach of the contract.

Question 25

Which of the following statements is the best description of a 'mandatory' injunction?

A) A court order restraining the defendant from removing or disposing of assets until the court makes a decision.
B) A court order requiring the person to perform some contractual obligation.
C) A court order preventing a breach of contract.
D) A court order which freezes the status quo between the parties until the dispute can be heard by the court.

Question 26

Which of the following statements is the best description of a 'mareva' injunction?

A) A court order restraining the defendant from removing or disposing of assets until the court makes a decision.
B) A court order requiring the person to perform some contractual obligation.
C) A court order preventing a breach of contract.
D) A court order which freezes the status quo between the parties until the dispute can be heard by the court.

Question 27

Which of the following statements is the best description of 'nominal' damages?

A) An amount awarded where the innocent party's rights have been infringed but they have suffered no actual loss.
B) An amount awarded to compensate the innocent party for the loss suffered as a result of the breach of contract.
C) An amount awarded to punish the party in breach of the contract.
D) An amount based upon a genuine pre-estimate of actual loss flowing from the breach of contract.

Question 28

In which of the following circumstances would the court be most likely to grant an order for specific performance?

A) Where the defendant has breached the contract by failing to proceed with the sale of a house.
B) Where the defendant has breached the contract by failing to perform his ongoing duties under an employment agreement with the plaintiff.
C) Where the defendant has breached the contract by failing to hire the plaintiff as an employee.
D) Where the defendant has breached the contract by failing to proceed with the sale of a new standard model car.

Question 29

Exemplary damages are awarded when the court feels that it needs to punish the party in default.

Question 30

The damages awarded in the case of Jarvis v Swan Tours [1972] 3 WLR 954 are an example of:

A) Exemplary damages for non-pecuniary loss.
B) Nominal damages because legal rights had been infringed but there was no actual loss.
C) Special damages which the plaintiff had to prove in court.
D) Ordinary damages suffered by the innocent party as a result of the breach.

Question 31

Nominal damages are the usual remedy in contract law.

Question 32

In Lumley v Wagner (1852) 42 ER 687, the court:

A) Refused to grant any remedy.
B) Granted a decree of specific performance which required the singer to perform at Lumley's theatre.
C) Made an order for damages against the singer for breach of contract.
D) Granted an injunction restraining the singer from breaching her contract to sing at Lumley's theatre.

Question 33

Damages are a common law remedy, whereas specific performance and injunction are equitable remedies. How do common law remedies and equitable remedies differ?

Question 34

To recover special damages under the rule in Hadley v Baxendale (1854) 9 Ex 341 the plaintiff must make known to the other party the special circumstances at the time the contract is entered into.

Question 35

Why did the court refuse to make an order of specific performance in J.C. Williamson Ltd v Lukey & Mulholland [1931] HCA 15?

A) The agreement was not in writing.
B) The Court would have had to supervise the order to ensure compliance.
C) Damages were an adequate remedy.
D) The agreement was not in accordance with the Statute of Frauds.

Question 36

In Commonwealth of Australia v Amman Aviation Pty Ltd (1991) 104 ALR 1, the court ordered the Commonwealth to:

A) Pay exemplary damages.
B) Mitigate the loss suffered by Amman.
C) Pay damages for expectation and reliance losses.
D) Perform the contract.

Question 37

The main purpose of damages is to enable the innocent party to receive monetary compensation.

Question 38

What is a penalty?

Question 39

Which of the following is the best description of an 'interlocutory' injunction?

A) A court order restraining the defendant from removing or disposing of assets until the court makes a decision.
B) A court order requiring the person to perform some contractual obligation.
C) A court order preventing a breach of contract.
D) A court order which freezes the status quo between the parties until the dispute can be heard by the court.

Question 40

What is meant by the term 'damages'?

Question 41

Failure to take legal action to recover a debt within the limitation period means that the debt is no longer recoverable.

Question 42

Equitable remedies are discretionary.

Question 43

Which of the following remedies is NOT an equitable remedy?

A) Injunction.
B) Exemplary damages.
C) Specific performance.
D) An Anton Pillar order.

Question 44

Damages are an equitable remedy.

Question 45

In most Australian jurisdictions, the right to sue for breach of a simple contract is limited to the period of 6 years from the date on which the right of action accrues.