Deck 18: B: Breach of Contract and Remedies

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

Nominal damages normally establish that the defendant acted wrongly.

Question 6

Liquidated damages provisions are usually not enforceable.

Question 7

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 8

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

Question 9

The measure of damages on a breach of contract is the amount that will impress on the breaching party the harm that has been done.

Question 10

Damages compensate a party for harm suffered as a result of another's wrongful act.

Question 11

Rescission advances the contracting parties to the position they would have been in if the contract had been fully executed.

Question 12

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

Question 13

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

Question 14

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

Question 15

Punitive damages are almost never available in contract disputes.

Question 16

A party who knowingly accepts defective performance of a contract thereby acknowledges the breach and can take later action on it.

Question 17

Most parties go to trial for damages or other remedies rather than settle their lawsuits.

Question 18

Reformation allows a court to rewrite a contract to reflect the parties' true intentions.

Question 19

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

Question 20

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

Question 21

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

A)$4,500.
B)$4,000.
C)$500.
D)$0.

Question 22

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 23

Cooper's Brakes,Inc. ,enters into a contract with Byron's Service to fix Cooper's hydraulic equipment.Byron delays the repair for five days,aware that Cooper loses a certain percentage of profit each day.An award to Cooper of consequential damages would

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

Question 24

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 25

A contract between E-Debits,Inc. ,and Fiscal 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 26

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 27

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 28

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.

Question 29

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 30

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 31

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 32

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

A)damages.
B)quasi-contractual recovery.
C)rescission.
D)specific performance.

Question 33

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 34

Fact Pattern 18-B1
Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to subdivide and sell in fifth-acre lots for Pristine Acres,a residential development.
Refer to Fact Pattern 18-B1.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 35

GroundCover Pools,Inc. ,agrees to build a swimming pool for Franci,but fails to complete the job.Franci hires EquiAqua,Inc. ,to finish the project.Candy may recover from GroundCover

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 36

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 37

Fact Pattern 18-B1
Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to subdivide and sell in fifth-acre lots for Pristine Acres,a residential development.
Refer to Fact Pattern 18-B1.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 38

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 39

A contract for a sale of land from Evergreen Properties,Inc. ,to Longlife Investment Corporation contains an erroneous legal description.The most appropriate remedy for these parties is

A)quasi-contractual recovery.
B)reformation.
C)rescission.
D)specific performance.

Question 40

Value Ventures,Inc. ,contracts to buy Umbrage Corporation's as?sets.Umbrage breaches the contract.Value files a suit against the corporation,seeking various remedies.The doc?trine of election of remedies has been elimi?nated in contracts involving sales of

A)goods.
B)intellectual property.
C)real property.
D)services.

Question 41

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.

Question 42

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?