Deck 12: Breach and Remedies

Question 1

Normally,when a nonbreaching party has been damaged by a breach of contract,he or she has a duty to mitigate those damages.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

False

Question 4

On an employer's breach of an employment contract,the measure of the employee's damages is his or her salary with no adjustments.

Question 5

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

Question 6

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

Question 7

A party seeking to recover compensatory damages may also be entitled to recover incidental damages.

Question 8

Compensatory damages are designed to compensate a nonbreaching party for the loss of the bargain.

Question 9

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

Question 10

The four broad types of damages in contract law are compensatory,conse?quential,punitive,and actual damages.

Question 11

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

Question 12

Punitive damages are often awarded in breach of contract actions.

Question 13

A breach of contract entitles the breaching party to obtain damages.

Question 14

A person's actions may cause a breach of contract or a tort,but never both.

Question 15

On the breach of a contract for a sale of land,the usual remedy is specific performance.

Question 16

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 17

The amount of damages on a breach of contract is the difference between the value of what was promised and the value of what was delivered.

Question 18

When a party fails to deliver goods contracted for,the nonbreaching party may obtain consequential damages for a loss of profit from a planned resale.

Question 19

Even if there is no monetary loss,damages may be assessed to recognize wrongdoing.

Question 20

Remedies that an innocent party can seek on the breach of a contract in?clude rescis?sion.

Question 21

To recover in quasi contract,the party seeking recovery must show that he or she conferred a benefit on another party.

Question 22

Rescission is available in cases involving fraud.

Question 23

EZ Products Company breaches its contract with For-Less Stores,Inc.For-Less files a suit to recover compensatory damages,which are nor?mally assessed to

A)compensate a nonbreaching party for the loss of a bargain.
B)establish,in the absence of a loss,that a party acted wrongfully.
C)pay for harm caused by special circumstances beyond a contract.
D)penalize a breaching party.

Question 24

Carol pays Dick $10,000 for Dick to design an advertising campaign for Carol's health club.The next day,Dick tells Carol that he has accepted a job in New York and cannot design the campaign.Carol files a suit against Dick.Carol can recover

A)$100,000.
B)$10,000.
C)$1,000.
D)nothing.

Question 25

Liquidated damage clauses typically require a party who breaches a con?tract to pay a certain amount to the nonbreaching party.

Question 26

Davy hires Echo to perform at Davy's Club,but Echo later breaches the agree?ment to accept a higher-paying job at Five Star Arena.Davy files a suit against Echo.The court will most likely

A)award damages to Davy.
B)cancel Davy and Echo's contract.
C)order Eve to perform the contract.
D)reform Davy and Echo's contract.

Question 27

Recovery under quasi contract may be used when one party partially per?forms under a contract that is unenforceable.

Question 28

Courts generally do not grant specific performance of personal service contracts.

Question 29

The failure of one party to perform a contract entitles the other party to re?scind the deal without returning whatever goods,property,or money was previ?ously conveyed.

Question 30

Pablo contracts to buy a Quotient-brand computer set-up from Regal Systems for $5,000,but Regal fails to deliver.Pablo buys the computer else?where for $6,500.Pablo's measure of damages is

A)$1,500 only.
B)$1,500 plus incidental damages.
C)incidental damages only.
D)$0.

Question 31

On a tenant's abandonment of leased premises,the landlord's measure of damages is the amount of the unpaid rent with no adjustments.

Question 32

Liquidated damages are damages that are uncertain in amount.

Question 33

To rescind a contract,the party that received a benefit in exchange for his or her promise to perform is required to return the benefit.

Question 34

Nominal damages normally establish that the defendant acted wrongly.

Question 35

Nominal damages usually involve very small amounts.

Question 36

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

Question 37

The doctrine of election of remedies requires a court to "poll" the parties to a contract to "elect" a remedy.

Question 38

In rescinding a contract,the parties essentially advance to the positions they would have been in if the contract had been performed.

Question 39

Rite-Bilt Contractors,Inc. ,agrees to build a motel for Slumber Motels Corporation.The project proceeds according to plan,but before it is done,Slumber tells Rite-Bilt to quit.Rite-Bilt 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 40

Specific performance is the remedy customarily used when there is no ac?tual contract or agreement between two parties.

Question 41

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

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

Question 42

Print Quik,Inc. ,seeks punitive damages in a suit against Reddy Supply Company.Generally,punitive damages may be recov?ered when a contract has been breached

A)in almost all cases.
B)only if the breach is directly related to the commission of a tort.
C)only if the contract involves a sale of goods or a sale of land.
D)under no circumstances.

Question 43

For Dona's breach of their contract,Esteban seeks restitution,which is

A)the canceling of a contract.
B)the loss of a bargain.
C)the performance of an act promised in a contract.
D)the recapture of a benefit conferred on a contracting party through which the party has been unjustly enriched.

Question 44

Mona contracts to repair a computer for New Data,Inc.(NDI).Mona knows that without the computer,NDI will lose a sale.Mona does not perform as promised.NDI files a suit against Mona.As consequential damages,NDI can recover

A)the cost of a new computer.
B)the difference between Mona's price and the actual cost of repair.
C)the loss of profit from the lost sale.
D)nothing.

Question 45

National Expeditions needs a tent for a mountain-climbing trip and orders one for $500 from Outdoor Supplies.National does not tell Outdoor about the trip,or that it must receive the tent by July 1 or it will lose $10,000.Outdoor ships the tent July 15.National can recover

A)$10,500.
B)$10,000.
C)$500.
D)nominal damages.

Question 46

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

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

Jamie contracts to sell a residential duplex to Keril.The contract pro?vides that if Jamie does not close the deal by September 15,she must pay Keril one-half of the duplex's sale price.This provision is not enforceable because it is

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

Question 48

Fiesta Properties,Inc. ,negotiates with Gusto Maintenance Corporation to include a liquidated damages clause in their contract.To be enforceable,at the time of the contract,an estimate of the damages from a breach must be

A)definite.
B)difficult.
C)easy.
D)possible.

Question 49

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

A)the amount of the wages that Great 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 50

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

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

Question 51

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

A)$17,000.
B)$15,000.
C)$2,000.
D)nothing.

Question 52

Lou and Mira want to rescind their contract under which Lou sold a laser printer to Mira for $200.To rescind the contract

A)Lou must return the $200 only.
B)Mira must return the printer only.
C)Lou must return the $200 and Mira must return the printer.
D)the parties can keep the "benefits" of their bargain.

Question 53

Vista Properties,Inc. ,leases an office building to World Corporation.At the time,the amount of damages on World's default is difficult to de?termine,so the parties reasonably estimate,and the lease provides,that if World defaults,Vista is entitled to $50,000 as "liquidated damages." This amount is

A)an unenforceable limitation of liability.
B)an unenforceable penalty.
C)liquidated damages.
D)punitive damages.

Question 54

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 Grocery Stores,Inc.This sale represents

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

Question 55

For Pete to recover the benefit of his bargain from a breached real estate contract with Quest Properties,Inc. ,the most appropriate remedy is

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

Question 56

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

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

Question 57

Kris contracts to work exclusively for Local Company during May for $5,000.On April 30,Local cancels the contract.Kris finds another job dur?ing May but earns only $3,000.Kris files a suit against Local.As compen?sa?tory damages,Kris can recover

A)$3,000.
B)$2,000.
C)$1,000.
D)nothing.

Question 58

Bob contracts to work for Central Construction Corporation (CCC)during July for $4,500.On June 30,CCC cancels the contract.Bob declines a similar job with Design Builders,Inc. ,which would have paid $4,000.Bob files a suit against CCC.As compensatory damages,Bob can recover

A)$4,500.
B)$4,000.
C)$500.
D)nothing.

Question 59

Lily wrongfully terminates her employee Mai.Nate offers a similar job to Mai,who refuses to accept and files a suit against Lily.The damages that Mai receives will most likely be equal to

A)Mai's salary less the income Mai would have received from Nate.
B)Mai's salary plus the income Mai would have received from Nate.
C)Mai's salary without more.
D)nothing.

Question 60

Loyal Engineers,Inc. ,needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company.Loyal tells Mining that it must receive the drill by Tuesday or it will lose $10,000.Mining ships the drill late.Loyal can recover

A)$13,000.
B)$10,000.
C)$3,000.
D)nothing.

Question 61

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 62

Nolan contracts for the sale of an ancient vase,a Renaissance painting,and a modern mansion to Olga.Nolan breaches the contract.Olga files a suit against him.The court will most likely award specific performance for

A)the mansion only.
B)the painting and the vase only.
C)the painting or the vase only,but not both.
D)the mansion,the painting,and the vase.

Question 63

Applied Services,Inc. ,contracts with Bankers Corporation,which breaches their contract.Applied has several remedies available.Under the common law,Applied must

A)accept a double recovery.
B)allow the remedies to cumulate.
C)elect which remedy to pursue.
D)permit Bankers to choose a remedy.

Question 64

Chris hires Delta Corporation to inspect a house under a contract drafted by Delta that limits Delta's liability "from any cause" to half of its $400 fee.Delta's inspector passes the house,which Chris buys.Defects soon be?come apparent,requiring repairs costing $10,000.Chris files a suit against Delta.Under the decision in Case 12.3,Lucier v.Williams,the limitation-of-li?ability clause is most likely

A)enforceable because at the time of the contract,the amount of li?abil?ity was difficult to determine and the limit is reasonable.
B)enforceable because both parties agreed to it.
C)unenforceable because at the time of the contract,the amount of li?ability was too difficult to determine.
D)unenforceable because the clause allows Delta to avoid almost all re?sponsibility for its negligence.

Question 65

Karla contracts to sell her farm to Leroy,who is to take possession on May 1.Karla delays the transfer until September 15.As a result,Leroy incurs additional expenses in pro?viding for hogs that he bought for the farm.When they made the con?tract,Karla knew that Leroy would buy the hogs,but Karla says,"Tough luck.September 15 was the earliest I could vacate the property." Is Karla liable for Leroy's extra expenses in providing for the hogs? Why or why not?

Question 66

As part of a sale of Ad-Vance,Inc. ,Bette's marketing firm,she signs a covenant not to com?pete that is unreasonable in its essential terms.To pre?vent undue hard?ship,a court will most likely

A)convert the unreasonable terms into reasonable ones.
B)declare that the entire contract is illegal.
C)decree that the sale of the business must be undone.
D)do nothing.

Question 67

Roy contracts to sell his Double-R Ranch to Sam on May 1.On April 20,Roy tells Sam that he will not go through with the deal.Sam files a suit against Roy.Sam can recover

A)the cost of any ranch that would suit him.
B)the cost of a similar,nearby ranch.
C)the Double-R Ranch.
D)nothing.

Question 68

Outstate Properties,Inc.(OPI),agrees to sell certain acreage to Pia.OPI repudiates the deal.Pia sues OPI and recovers dam?ages.Pia can now obtain

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

Question 69

Masterwork,Inc. ,files a suit against National Employment Company (NEC)to recover in quasi contract.Masterwork must show in part that

A)Masterwork and NEC have an enforceable contract.
B)Masterwork did not voluntarily confer a benefit on NEC.
C)NEC expressly promised to pay Masterwork.
D)NEC is in a better financial position than Masterwork.

Question 70

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

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

Question 71

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

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

Question 72

A contract between Sportz Equip Corporation and Time-To-Play Stores,Inc. ,includes a provision excluding liability as a result of fraud.This provi?sion 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.