Deck 18: A: Breach of Contract and Remedies

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

The four broad types of damages in contract law are conciliatory,consecutive,punctual,and nominative.

Question 7

Most parties settle their lawsuits for damages or other remedies prior to trial.

Question 8

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

Question 9

A person's actions may cause a breach of contract or a tort,but not both.

Question 10

Specific performance is the remedy customarily used when one party has breached a contract for the sale of goods.

Question 11

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

Question 12

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

Question 13

Damages are designed to punish a breaching party and deter others from similar conduct.

Question 14

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

Question 15

The purpose of the doctrine of election of remedies is to permit double recovery.

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

A party who knowingly accepts defective performance of a contract waives the breach.

Question 21

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 22

Pure Oil Company enters into a contract with QuikBilt,Inc. ,to construct an offshore 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 23

Lester and Myrtle want to rescind their contract under which Lester sold an MP3 player for $40.To rescind the contract

A)Lester must return the $40 and Myrtle must return the player.
B)Lester must return the $40 only.
C)Myrtle must return the player only.
D)the parties can keep the "benefits" of their bargain.

Question 24

To avoid liability for intentional injuries,Northwest Power Corporation in?cludes in its contracts an exculpatory clause.This is

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

Question 25

Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term.In some states,Sunny would have to

A)avoid reletting the premises to recover damages from Ray.
B)make reasonable efforts to relet the premises to mitigate dam?ages.
C)relet the premises to recover damages from Ray.
D)sell the premises to recover damages from Ray.

Question 26

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 27

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 28

Vacation Vistas,Inc. ,agrees to sell certain acreage to Umiko,who intends to develop a destination resort.Vacation Vistas repudiates the deal.Umiko sues Vacation Vistas and recovers dam?ages.She can now obtain

A)an amount in a quasi-contractual recovery.
B)damages representing restitution.
C)specific performance of the deal.
D)nothing more.

Question 29

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 30

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 31

SFX Paintball Games,Inc. ,and Truck & Trailer Delivery Corporation 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 32

Fidelio Corporation enters into a contract with Equi Insurance,Inc. ,to obtain health insurance for Fidelio employees.Equi breaches the contract.If Fidelio is awarded compensatory damages,the purpose would be to

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

Question 33

Development Associates (DA)agrees to buy five acres of land from Eastside Properties for $15,000.Eastside fails to go through with the deal on the agreed date,when the market price of the land is $17,000.DA may recover

A)$17,000.
B)$15,000.
C)$2,000.
D)$0.

Question 34

Karif orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment.When Karif sends her the rest of the price,Jane refuses to ship the collection.Karif should seek

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

Question 35

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 36

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 37

Rural Power 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.The parties rescind the contract.Shovel's refund of the payment is

A)a penalty.
B)liquidated damages.
C)restitution.
D)a breach of contract.

Question 38

Damon contracts to repair the turf on a soccer field for Carousel Sports Park.Damon knows that without the repair,Carousel will have to cancel an upcoming game.Damon does not perform as promised.As consequential damages,Carousel can recover

A)the cost of new turf.
B)the difference between Damon's price and the actual cost of repair.
C)the loss of profit from the canceled game.
D)nothing.

Question 39

Consumer Credit Union pays Derby $10,000 to design an ad campaign.The next day,Derby tells the credit union that he has accepted a job in Boston and cannot design the campaign.As compensatory damages,the credit union can recover

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

Question 40

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 41

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 42

Owen buys a used Prius from Quality Motors,Inc. ,paying $1,000 down and agreeing to pay off the balance in thirty-six monthly payments of $200 each.The terms of the agreement call for Owen to make a payment on or before the first of each month,beginning March 1.During the first six months,Quality receives a $200 payment before the first of each month.Starting in September,however,and continuing for the subsequent five months,Owen's payment is never made until the fifth of the month.Quality accepts and cashes the payment check each time.Before the next payment is due,Quality decides that it is no longer willing to accept late payments.Can Quality sue Owen immediately for breach? Can Owen continue to make late payments without liability? Explain.