Deck 12: Contractual Remedies

Question 1

While damages in tort are always backward-looking,damages in contract are always forward-looking.

Answer 1

False

Question 2

Imran contractually agreed to sell a widget to Juanita for a total price of $200 000.Juanita paid $50 000 immediately and promised to pay the remainder upon delivery.However,Imran refused to ever deliver a widget.Between the time that the contract was created and the time of breach,the value of the widget dropped from $200 000 to $100 000.Juanita nevertheless is entitled to get back her payment of $50 000.

Answer 2

True

Question 3

Because of the need for commercial certainty,a court will award expectation damages only if the value of the plaintiff's loss can be calculated with precision.

Answer 3

False

Question 4

A court will award punitive damages only if the plaintiff is not entitled to expectation damages.

Question 5

Savannah agreed to buy a car from Rhett for $10 000.Savannah paid the price,but Rhett refused to perform the contract after he discovered that the vehicle was really worth $17 000.At the time that the contract was created,neither he nor Savannah was aware of the vehicle's actual value.Which of the following statements is TRUE?

A)The court will likely award expectation damages based on the profit that Rhett expected to receive under the contract.
B)The court will likely award specific performance because of the significant difference between the contract price and the actual value of the car.
C)Savannah cannot get expectation damages for $17 000 because she did not expect to receive a car of that value when she entered into the contract.
D)Savannah will be entitled to receive a total of $7000 in expectation damages because that is the profit that she should have received under the contract.
E)Even though he breached the contract,Rhett may not be liable for the full difference between the contract price and the market value if Savannah could have purchased a similar car from a third party for less than $17 000.

Question 6

On October 15,Madeleine contractually agreed to sell a widget to Hugh.The total price was $20 000.Hugh paid $4000 immediately and promised to pay the remainder upon delivery.Madeleine delivered the widget to Hugh on November 2,as required by the contract.He refused to accept it,however,because its market value had dropped from $20 000 to $10 000.Madeleine is entitled to receive $6000 in expectation damages.

Question 7

If defendants in a private law case refuse to obey orders for specific performance,they can be sent to jail for contempt of court.

Question 8

On June 1,Sergei contractually agreed to purchase a widget from Marisa.The total price was $15 000.Sergei paid $5000 immediately and promised to pay the remainder upon delivery.Although Marisa was required to deliver on July 15,she refused to do so.The market value of the widget was $15 000 on June 1,but $22 000 on July 15.Sergei is entitled to receive $12 000 in expectation damages.

Question 9

On March 26,Sanjeev agreed to sell a widget to Anita for $50 000.She paid $10 000 immediately and promised to pay the remainder when he made delivery on August 30.Sanjeev breached the contract,however,by refusing to deliver the widget.On August 30,its market value had dropped to $47 000.Anita cannot recover expectation damages,but she can recover a maximum of $3000 in reliance damages.

Question 10

The courts often award cost of cure damages in order to punish the defendant for acting outrageously.

Question 11

Luis contractually agreed to sell a widget to Monica for $20 000.Monica accepted delivery of the widget,but has paid only $13 000.Although neither party realized it when they created their contract,the widget is actually worth $23 000.A court will order Monica to pay Luis

A)$10 000.
B)$7000.
C)$20 000.
D)$13 000.
E)$23 000.

Question 12

Brown's Construction Co agreed to renovate a lecture hall at Moosehead University.The contract required the work to be done between July 1 and September 1 so that classes would not be disrupted.The contract also stated that Brown's would be required to pay the university $10 000 per week for each week that the work ran over schedule.That part of the contract was intended to allow Moosehead to rent other premises for the purpose of holding class off-campus in the event of a delay as a reasonable pre-estimate of liquidated damages.In fact,the project was finished six weeks late.Because of an unexpected downturn in the economy,however,the university only had to pay a total of $20 000 to hold classes off-campus during the delay.Brown's Construction nevertheless may be required to pay $60 000.

Question 13

Susan contractually agreed to sell a particular computer to Davor for $5000.Although Davor paid the money,Susan refuses to actually give him the computer.A court will likely award monetary damages,rather than specific performance,to Davor because

A)judges do not have the authority to force the defendant to act in a particular way.
B)Davor has already paid the purchase price.
C)Susan has not committed a serious breach of contract.
D)monetary damages will provide Davor with an adequate remedy.
E)the loss of the computer is too remote.

Question 14

In the context of contractual damages,there is only one measure of relief.

Question 15

On September 1,Mira agreed to sell a shipment of beans to Marco for a total price of $20 000.He paid the price immediately and the contract required her to make delivery on December 1.She failed to do so.By that time,the market value of the beans had increased to $27 000.Although Marco could have arranged to receive a shipment of beans from another supplier almost immediately,he actually waited three weeks before entering into such a contract with Hector.By that time,the market value of the beans had increased to $30 000.Marco is entitled to expectation damages of $30 000 as long as a reasonable person could have predicted the full price increase on December 1.

Question 16

Which of the following statements is TRUE?

A)Damages in contract are always forward-looking.
B)Damages in contract are always backward-looking.
C)In deciding whether or not damages in contract should be forward-looking or backward-looking,a court will be influenced by whether or not the defendant's breach was deliberate.
D)Damages in contract are usually forward-looking because the courts want to protect the fact that promises are valuable only if they will be kept in the future.
E)Expectation damages compensate the plaintiff for expenses that it actually paid in reliance upon the contract.

Question 17

Joshua contractually agreed to sell a widget to Maya for $50 000.Before the sale was completed,however,Maya announced that she no longer wanted the widget.She therefore refused to accept delivery of it or to make any payment.The widget is really worth $55 000.There are several other parties who are willing to buy it from Joshua at that price.At the time of entering into his contract with Maya,however,Joshua thought that the widget was worth $60 000.He therefore thought that he would earn a profit of $10 000 under the contract.A court will order Maya to pay Joshua

A)$5000.
B)$50 000.
C)$10 000.
D)$55 000.
E)$1.

Question 18

If the plaintiff proves an enrichment,a corresponding deprivation,and a juristic reason for the enrichment,it will normally be entitled to the remedy of restitution.

Question 19

Penelope contractually agreed to repair Don's roof with a specific type of tile for a price of $10 000.After she completed the job,Don noticed that she had not used the type of tile that was required by the contract.She had used a lower grade of tile.Consequently,Don's roof was worth $3000 less than he had expected.It will cost $5000 to remove the tiles that Penelope used and to put the proper type of tiles in their place.If a court awards cost of cure damages to Don,he will be required to use that money to actually replace the existing tiles with the tiles that he expected to receive under his contract with Penelope.

Question 20

Dina entered into a contract with George.She agreed to decorate his office and he agreed to pay her $10 000.She spent $3000 performing her obligations under the agreement.He has paid her $2000,but refuses to pay any more.Under the concept of reliance damages,George must now pay $8000 to Dina.

Question 21

Which of the following statements is TRUE?

A)Liquidated damages are always available if the defendant breached a contract for the sale of land.
B)Liquidated damages are enforceable if they represent a genuine estimate of the losses that the plaintiff might have suffered as a result of the defendant's breach.
C)The plaintiff can recover more than a liquidated damages clause provides for if it suffered a larger loss as a result of the defendant's breach.
D)The plaintiff cannot recover the full amount of liquidated damages if it suffered a smaller loss as a result of the defendant's breach.
E)Because of the risk of unfairness,liquidated damages are never allowed unless the defendant received independent legal advice at the time that the contract was created.

Question 22

An intangible loss

A)is a loss that has market value.
B)traditionally resulted in expectation damages.
C)usually triggers the remedy of an account of profits.
D)usually leads to reliance damages.
E)may be the subject of damages if the contract was intended to provide "peace of mind" to the plaintiff.

Question 23

The monetary value of expectation damages may be affected by

A)the concept of disgorgement.
B)the concept of esperanto.
C)the profit that the defendant unreasonably expected to receive under the contract.
D)the money that the party in breach saved as a result of the breach.
E)the fact that some of the plaintiff's losses are intangible.

Question 24

Which of the following statements is TRUE?

A)Cost of cure damages will never be awarded unless the plaintiff has already spent money to cure the defect in the defendant's performance.
B)Cost of cure damages will always be less than loss of value damages.
C)Cost of cure damages will always be awarded if the plaintiff's only loss is intangible.
D)Cost of cure damages are more likely to be awarded if the innocent party has a reasonable and legitimate reason for wanting to have a defect actually cured.
E)Cost of cure damages are a form of reliance damages.

Question 25

The victim of a breach of contract is entitled to

A)claim expectation damages for remote losses.
B)enforce a contractual term regarding liquidated damages but not penalties.
C)compel the party in breach to mitigate the losses.
D)insist upon receiving cost of cure damages.
E)recover damages for intangible losses only if the defendant deliberately breached the contract.

Question 26

Sammy Productions Inc wanted to hold an open-air concert on September 30.On February 1,it entered into a contract with Maxine,a wealthy landowner.Under the terms of that agreement,Maxine agreed to let the concert be held on her property and Sammy agreed to pay her 10 percent of its gross revenues from the concert.The parties agreed to set the price in that way because they did not have any way of knowing how many people would attend the concert.Attendance would depend upon a large number of factors,including the weather and the general state of the economy.Based on past experience,however,Sammy and Maxine agreed that the event would certainly be profitable.After signing its contract with Maxine,Sammy spent $75 000 on advertising.It also passed up an opportunity to organize a Canada Day celebration in Ottawa,for which it would have received $100 000 in net profits from the government of Canada.Maxine was aware that Sammy sacrificed that opportunity.On August 1,however,Maxine abruptly announced that she would not allow the concert to be held on her land.She offered Sammy $50 000 as compensation for its losses.It is not possible for Sammy to arrange another site for its concert given the late date.A court would most likely order Maxine to pay Sammy

A)$50 000.
B)$100 000.
C)$75 000.
D)$175 000.
E)$0.

Question 27

Which of the following statements is TRUE?

A)If a court awards nominal damages,it will always award costs against the party that breached the contract.
B)Canadian judges award punitive damages more often than American judges.
C)Nominal damages are usually worth more than punitive damages.
D)Punitive damages are intended to compensate the plaintiff for losses that it unexpectedly suffered as a result of the defendant's breach of contract.
E)An account of profits normally is not available even if the defendant earned a large profit as a result of committing a breach of contract against the plaintiff.

Question 28

Harold agreed to sell a widget to Sheila for $10 000.Sheila paid the purchase price immediately and Harold was required to deliver the widget on June 1.In fact,Harold did not deliver the widget until June 21.As a result,Sheila was unable to perform a contract for ABC Inc.on June 19 that would have paid her $15 000.Which of the following statements is TRUE?

A)Sheila is entitled to recover $15 000 in damages from Harold as long as she knew,or should have known,that late delivery would cause her to lose her contract with ABC Inc.
B)Sheila's loss of $15 000 is best described as an intangible loss.
C)Sheila is liable to Harold for $15 000 as long as he knew,or should have known,of the possibility of that loss when he breached the contract.
D)Damages will be reduced to the extent that Harold failed to mitigate the loss that was caused by the breach.
E)Depending upon the facts,Sheila's damages may be reduced on the basis of both the concept of remoteness and the concept of mitigation.

Question 29

Shinji contractually agreed to record a concert for Keith.The concert was to occur on November 8 and Keith was to pay a price of $10 000 on the same day.On October 15,Shinji informed Keith that he would not be able to record the concert.On November 2,Keith entered into a contract with his good friend,Manfred.Under the terms of that agreement,Manfred was required to record the concert on November 8 and Keith was required to pay $25 000.The evidence indicates that Keith could have easily hired someone other than Manfred for $17 000.Which of the following statements is TRUE? A court would probably order Shinji to pay Keith

A)$25 000.
B)$17 000.
C)$15 000.
D)$10 000.
E)$7000.

Question 30

Dave was contractually required to deliver a widget to Pam by July 1.He failed to do so.At that point,Pam predicted that she would suffer a loss of $100 000 during the next six months because her factory cannot operate efficiently without a widget.Which of the following statements is TRUE?

A)Because she is under a duty to mitigate,Pam cannot receive any damages unless she purchases a widget from another supplier.
B)Because she is under a duty to mitigate,Pam must do everything possible to acquire a widget from another supplier.
C)Because he is under a duty to mitigate,Dave will be held liable for $100 000 unless he takes reasonable steps to help Pam purchase a widget from another supplier.
D)Because Dave is under a duty to mitigate,the damages that he must pay will be reduced to the extent that he reasonably spends money trying to help Pam purchase a widget from another supplier.
E)Because she is under a duty to mitigate,Pam will be denied damages to the extent that she could reasonably avoid a loss flowing from Dave's breach.

Question 31

The concept of remoteness

A)allows recovery for losses that were not reasonably foreseeable.
B)is related to the risks that the parties accepted when they created their contract.
C)always applies if the plaintiff mitigated the loss that was caused by the defendant's breach.
D)is based on facts that the defendant knew,or should have known,at the time of committing the breach of contract.
E)applies only if the plaintiff's loss was caused by a combination of the defendant's breach and the actions of a third party.

Question 32

Woody entered into a contract with Jezebel.She promised to pay $10 000 and he promised to build a sun deck in her backyard.The contract contained specific terms regarding the quality of the materials that Woody would use.Woody built a sun deck,but many of the materials that he used fell below the standard required by the contract.As a result of that breach,the deck is worth $1000 less than Jezebel expected.It will cost $9000 to replace the defective materials with materials that satisfy the terms of the contract.Which of the following statements is TRUE?

A)A court will certainly award cost of cure damages if Woody deliberately used materials that did not satisfy the terms of the contract.
B)A court will probably refuse to award cost of cure damages because the difference between the loss of value and the expense of repairing the defect is very large.
C)If Jezebel is awarded cost of cure damages,she must use that money to cure the defect.
D)Cost of cure damages are classified as a form of punitive damages because they often require the defendant to pay for more than the plaintiff's actual loss of value.
E)If Woody deliberated breached the contract by using inferior materials,Jezebel will receive total damages worth $18 000.

Question 33

Brianna contractually agreed to sell a widget to Oren.She was required to deliver the item on June 1 and he was required to pay $75 000 on the same day.Paragraph 21 of the contract said that if Brianna breached the contract by refusing to deliver the item,Oren would be entitled to a payment of $20 000.Brianna did,in fact,refuse to deliver the widget.Oren therefore has not yet paid the price.Which of the following statements is TRUE?

A)If Oren suffered a loss of $15 000 as a result of Brianna's breach,he will be entitled to payment of that amount if paragraph 21 of the contract was a penalty.
B)If Oren suffered a loss of $10 000 as a result of Brianna's breach,he will be entitled to payment of $20 000 if paragraph 21 of the contract was a penalty.
C)If Oren suffered a loss of $30 000 as a result of Brianna's breach,he will be entitled to payment of that amount if paragraph 21 of the contract was for liquidated damages.
D)If Oren suffered a loss of $10 000 as a result of Brianna's breach,he will be entitled to payment of that amount and no more if paragraph 21 of the contract was for liquidated damages.
E)If Oren suffered a loss of $20 000,and the court classified paragraph 21 as liquidated damages,then Brianna would be liable to pay $95 000.

Question 34

Widgets are manufactured by very few companies and they are often difficult to locate.On January 1,Alpha Corp contractually agreed to sell a widget to Beta Inc.Beta paid the total purchase price of $30 000 immediately.The contract required Alpha to deliver the widget on April 1.On March 25,Alpha contacted Beta and announced that it would not be able to deliver the widget.By that time,the cost of a widget had increased to $50 000.On March 28,Beta paid $2000 to an independent firm to locate an alternative widget supplier.That firm suggested Gamma Ltd.On March 30,Beta paid $50 000 to Gamma Ltd to deliver a widget by April 1.A court would probably order Alpha to pay Beta

A)$2000.
B)$82 000.
C)$22 000.
D)$50 000.
E)$30 000.

Question 35

Mayo committed a breach of contract against Dirk.After ordering Mayo to compensate Dirk for the losses that he suffered,the judge also ordered Mayo to pay an additional $10 000 to Dirk.These facts most likely demonstrate the concept of

A)nominal damages.
B)liquidated damages.
C)a penalty clause in the contract.
D)punitive damages.
E)equitable relief.

Question 36

Katarzyna contractually agreed to sell a painting to Trent.She promised to deliver it on June 1 and he promised to pay $10 000 on the same day.On May 15,Katarzyna discovered that the painting is really worth $25 000.She therefore has told Trent that she does not intend to fulfill the contract.Which of the following statements is TRUE?

A)Since specific performance is an equitable remedy,Trent is entitled to receive the painting only if he agrees to pay $25 000 to Katarzyna.
B)Trent is not entitled to an order for specific performance because a court will not force Katarzyna to act in any particular way.
C)If specific performance is not available,Trent will probably be entitled to receive $25 000 from Katarzyna.
D)A court will probably give Trent specific performance and reliance damages.
E)Trent probably is not entitled to specific performance if Katarzyna is under the age of majority.

Question 37

Alexi agreed to sell a particular type of car to Carole for $15 000.He breached the contract by refusing to deliver the car and complete the sale.She bought another car of the same type from Ivan for $18 000.These facts most clearly illustrate the concept of

A)remoteness.
B)mitigation.
C)cost of cure.
D)loss of value.
E)intangible losses.

Question 38

Armand contractually agreed to sell a widget to Melanie for $100 000.However,she refused to accept delivery of the widget or to pay the contract price because the widget is really worth $80 000.Britt then offered to buy the widget from Armand for $80 000,but he rejected that offer.If Armand claims expectation damages,a court will order Melanie to pay him

A)$100 000.
B)$20 000.
C)$40 000.
D)$80 000.
E)$0.

Question 39

On June 1,Lauto Inc contractually agreed to buy a Pupmobile LX from Dos Motors Ltd for $25 000.Payment of the price and delivery of an appropriate vehicle were scheduled to occur on July 15.On July 1,however,Dos informed Lauto that it had carelessly crushed its only Pupmobile LX with an industrial-sized garbage bin.Dos apologized profusely and explained that it did not have another one in stock.It also informed Lauto that,because a Pupmobile LX had recently appeared in a highly successful movie,such cars were in great demand."If you still want one," said the manager at Dos,"you had better act quickly.I'll expect that they will start to go up in value very quickly." Between July 1 and July 10,Lauto could have agreed to purchase a Pupmobile LX from another dealer for $30 000.Nevertheless,Lauto waited until July 11 before buying a Pupmobile LX from Tertius Motors Ltd for $35 000.By July 15,the market value of such vehicles had increased to $40 000.A court would probably order Dos to pay Lauto

A)$15 000.
B)$10 000.
C)$25 000.
D)$5000.
E)$30 000.

Question 40

As a general rule,punitive damages will not be awarded for a breach of contract unless

A)monetary damages would not adequately compensate the plaintiff.
B)the plaintiff committed an independently actionable wrong.
C)the contract expressly allows for such relief.
D)the plaintiff seeks equitable relief.
E)the defendant is guilty of breaching at least two obligations.

Question 41

Silvio agreed to perform as a pianist with the Moose Jaw Symphony Orchestra (the MJSO).His contract with the orchestra contained two important clauses.One required him to perform with the MJSO four times per month for three years.The other prohibited him from "acting in any musical capacity for any other employer" during the same period.After a short time,Silvio grew dissatisfied with the MJSO.He therefore announced his intention to quit the MJSO and to join the Thunder Bay Orchestra (the TBO).Which of the following statements is TRUE?

A)Because Silvio has special skills,a court would certainly grant an order of specific performance to the MJSO.
B)Silvio is entitled to quit the MJSO and join the TBO because a contract for personal services is never enforceable.
C)A court might grant an injunction to the MJSO to prevent Silvio from performing for the TBO if it is reasonably possible for Silvio to earn a living without violating the terms of his contract.
D)Since an injunction is an equitable remedy,such relief is available only if the contract between Silvio and the MJSO was under seal.
E)A court would not grant either specific performance or an injunction because the requirement of mutuality could not possibly be satisfied on the facts.

Question 42

Alpha Corp has sued Beta Inc for breach of contract.The judge imposed liability as a result of relying upon the concept of a fundamental breach.The case must have dealt with

A)punitive damages.
B)unjust enrichment.
C)an exclusion clause.
D)liquidated damages.
E)an injunction

Question 43

Restitution is

A)a cause of action that sometimes is available in a contractual context.
B)a remedy that may require the defendant to give up a benefit that it acquired from a third party as a result of committing a wrong against the plaintiff.
C)another appropriate name for an account of profits.
D)never able to exceed the value of expectation damages.
E)available as a remedy for unjust enrichment.

Question 44

Remington Construction enters into a contract with Royal Condominiums to build a new apartment building.Before receiving payment,Remington puts $100 000 into pouring the foundation.Royal breaches the contract by missing a payment.Which of the following is true?

A)Remington will be able to receive reliance damages.
B)Remington will be able to receive an account for profits.
C)Remington can only receive nominal damages.
D)Remington's expectation damages will be limited to $100 000.
E)Remington will not be able to recover the $100 000 because it is too remote.

Question 45

Which of the following sets of remedies are both equitable?

A)punitive damages and nominal damages
B)restitution and punitive damages
C)specific performance and injunction
D)liquidated damages and rescission
E)account of profits and reliance damages

Question 46

Which of the following statements is TRUE with respect to reliance damages?

A)The plaintiff is entitled to recover both reliance damages and expectation damages.
B)They are available only to the extent that the plaintiff entered into a bad bargain.
C)The plaintiff is entitled to spend the damage award as it chooses.
D)Because contractual promises look to the future,reliance damages are forward-looking.
E)They are intended to allow the plaintiff to complete any work that the defendant did not perform.

Question 47

Munchable Catering Company contractually agreed to cater Indira's wedding for a price of $25 000.Because Indira was anxious for everything to go just right on her wedding day,she insisted that the agreement contain a clause that said that,if Munchable breached the contract,it would be required to pay damages of $250 000.Tarik,the owner-operator of Munchables,agreed to the insertion of that clause because he was (1)new to the business,(2)very confident that he would perform exactly as required,and (3)easily persuaded.Two weeks before the wedding,however,disaster struck.Tarik was hospitalized with a mysterious illness.He immediately called Indira and explained that he would not be able to fulfill the contract.Indira became hysterical and demanded payment of $250 000.She eventually calmed down and was able to hire a replacement caterer at a price of $35 000.The wedding then occurred precisely as Indira had long hoped.She nevertheless still wants to sue Tarik for as much money as possible.Which of the following statements is most likely to be TRUE if a judge decides the case?

A)If Indira paid $25 000 to Tarik at the outset,she is now entitled to receive $35 000.
B)Indira is entitled to receive $250 000 from Tarik.
C)Tarik merely has to repay $25 000 to Indira.
D)Tarik is liable for punitive damages.
E)The judge will classify the contractual clause that requires the payment of $250 000 as a nominal damages clause.

Question 48

Mountain City Construction Company (MCCC)contractually agreed to build a recreational complex for Valley City.The City agreed to pay $2 million upon completion of the project.Shortly after starting the project,MCCC realized that it had entered into a very bad bargain.It would have to provide $4 million in services and materials in order to build the recreational complex.It decided to nevertheless fulfill its obligations.After MCCC had finished 75 per cent of the project,at a total cost of $3 million,a new mayor was elected.True to the new mayor's campaign promise,the City immediately locked MCCC out of the work site.The City then hired Valley City Construction Incorporated (VCCI)to complete the recreational complex at a cost of $1 million.The City refuses to pay anything to MCCC.MCCC therefore has discharged the contract and taken its case to court.A judge most likely would award

A)expectation damages worth $4 million.
B)reliance damages worth $3 million.
C)restitution worth $3 million.
D)an account of profits worth $1 million.
E)expectation damages worth $3 million.

Question 49

Manny contractually agreed with Akio Inc to present a series of ten lectures to that company's employees.The total price of $5000 was to be paid after the last lecture.The work turned out to be far more complicated and far more expensive than Manny first expected.He nevertheless carried on with the agreement because he did not want to damage his reputation for reliability and professionalism.Manny spent $12 000 preparing and delivering five lectures.It would have cost the same amount to prepare and deliver the remaining lectures.At that point,however,Akio breached the contract and prevented Manny from completing the contract.Which of the following statements is TRUE?

A)Manny is entitled to receive $5000 as expectation damages.
B)Manny is entitled to receive $12 000 as reliance damages.
C)Manny is entitled to receive an order for specific performance.
D)Manny is entitled to receive $12 000 as restitution.
E)Manny is not entitled to any remedy.

Question 50

Judy is suing Craig because she believes she suffered a wrong when he did not contribute to her fundraiser.She did not necessarily lose anything monetarily,but she is suing for the symbolic purpose.The damages she hopes to receive are referred to as

A)liquidated damages.
B)punitive damages.
C)nominal damages.
D)reliance damages.
E)account for profits.

Question 51

On August 1,Brian contractually agreed to purchase a diamond from Mila for $100 000.On that date,Brian prepaid half of the purchase price and promised to pay the other half upon delivery.Mila promised to deliver the diamond to Brian on October 1.The diamond has a unique size and shape.In anticipation of receiving it,Brian spent $25 000 on a custom-made ring that could accommodate the diamond.On September 1,political revolutions in several diamond producing countries disrupted the flow of diamonds.The diamond that was the subject of Brian and Mila's contract consequently increased in value to $150 000.Mila therefore refused to deliver the diamond to Brian.Brian is entitled to receive

A)restitution of $100 000.
B)restitution of $150 000.
C)reliance damages of no more than $25 000.
D)reliance damages of no more than $75 000.
E)expectation damages of $150 000.

Question 52

On March 1,Joe contractually agreed to purchase an antique family heirloom from his third cousin,Maureen,for $40 000.Joe paid half of that price immediately and promised to pay the other half upon delivery.Maureen promised to deliver the heirloom on May 1.On April 1,another member of the family discovered that the heirloom had not belonged to a famous ancestor,as everyone had believed,but rather to that person's half-brother.The market value of the heirloom consequently dropped to $10 000.Maureen nevertheless refuses to deliver it as promised.Joe is entitled to

A)expectation damages of $40 000.
B)expectation damages of $10 000.
C)expectation damages of $30 000.
D)reliance damages of $20 000.
E)restitution of $20 000.

Question 53

On May 1,George contractually agreed to purchase a painting from Laura for $50 000.On that date,George prepaid half of the purchase price and promised to pay the other half upon delivery.Laura promised to deliver the painting to George on June 1.In anticipation of receiving the painting,George spent $10 000 building a special display case in his home.On May 15,the artist who created the painting died and the value of the painting immediately increased to $75 000.Laura therefore refused to deliver the painting to George.George is entitled to receive

A)no more than $10 000 as reliance damages.
B)$25 000 in expectation damages.
C)$50 000 in expectation damages.
D)$75 000 in expectation damages.
E)$35 000 in expectation damages.

Question 54

Irma was in a contract for the purchase of two tickets to Disneyland for which she had already paid.The contract was breached the day before she was supposed to leave and caused Irma to buy another set of tickets for twice the price,as well,her mother,who was supposed to come as well,could not.Irma could not receive damages for

A)the cost of buying the new tickets.
B)the amount she paid for the original tickets.
C)the intangible loss caused by her disappointment.
D)the amount she spent on new holiday clothes.
E)the expected amount she may have won from a contest she and 3 others entered that would take place during the trip.

Question 55

Eleni agreed to act as an investment adviser for Gnuhigh Ltd.After completing her first project for Gnuhigh,she asked for payment of $10 000,as calculated under the terms of the parties' agreement.Gnuhigh refused to pay.In support of its position,it pointed to the Financial Industry Standards Act,which says that a contract for investment advice is unenforceable unless it is registered with a government official.The agreement between Eleni and Gnuhigh is not registered.Eleni is most likely entitled to receive

A)$10 000 as restitution for unjust enrichment.
B)$10 000 as reliance damages.
C)$10 000 as liquidated damages.
D)$10 000 as expectation damages.
E)an order for specific performance.

Question 56

Wendy was fired from her job for reasons that violated her contract.She began a process of suing her employer for breach of contract and does not attempt to find a new job.Wendy made approximately $3000 a month and the case is decided 6 months after her termination.Which of the following is true?

A)Wendy is entitled to $18 000 in damages.
B)Wendy may be denied damages based on lost wages because she did not try to mitigate her loss.
C)Wendy is entitled to damages from intangible losses.
D)Wendy is entitled to her monthly wage until the date the trial begins.
E)Wendy is entitled to the cost of suing her employer (the cost of the cure).

Question 57

Which of the following concepts limits the availability of specific performance?

A)mutuality
B)remoteness
C)mitigation
D)penalty
E)cost of cure

Question 58

Yuri enters into a contact for the purchase of an antique table for $300.He has a buyer willing to pay $2000 for the same table.Yuri pays before receiving the table.The seller breaches the contract when he realizes the table is worth more.Yuri can recover

A)$300.
B)$1700.
C)$2000.
D)$2300.
E)$0.

Question 59

Iago contractually agreed to sell a particular piece of land to Desdemona.He later changed his mind and decided to keep the property for himself.Which of the following statements is TRUE?

A)A court would not award an order for specific performance because it would not be willing to supervise the transfer of land.
B)Since the contract dealt with a sale of land,Desdemona will certainly receive an order for specific performance.
C)Desdemona probably is not entitled to an order for specific performance if the land is not unique or special.
D)Desdemona will be entitled to receive an order for specific performance only if she grants an injunction to Iago.
E)Desdemona will receive specific performance only if Iago comes to court with unclean hands.

Question 60

Which of the following statements is TRUE?

A)A court will refuse to award specific performance if monetary damages are inadequate.
B)The requirement of mutuality means that specific performance will not be awarded unless both parties provided consideration under a contract.
C)Specific performance is not available if the defendant has "dirty hands" when it comes to court.
D)Because it is an equitable remedy,specific performance is always available even if the plaintiff waits a long time before suing the defendant.
E)Although the courts traditionally awarded specific performance for a contract to sell a piece of land,the plaintiff will now receive damages unless a piece of land is somehow special or unique.

Question 61

What are nominal damages? Why is it sometimes dangerous to sue for breach of contract and claim nominal damages?

Question 62

"The idea of compensation usually means that the plaintiff is entitled to get back something that it previously enjoyed,but that it lost because of the defendant's bad conduct.Although they are considered compensatory,expectation damages do not work in exactly the same way." Explain the meaning of that statement.Provide a justification for awarding expectation damages to the victim of a breach of contract.

Question 63

Provide two reasons as to why courts generally award monetary damages,rather than specific performance,if one party breaks a sales contract by refusing to make delivery.

Question 64

Pascal,who is 15 years old,entered into a contract with Wagers Antique Shop.He promised to trade his services as a computer programmer for an antique bible.Under the terms of that agreement,he was required to begin work as a computer programmer as soon as Wagers delivered the book to him two weeks later.The next day,however,Wagers informed Pascal that it decided to keep the book for itself.Since Pascal is anxious to acquire the book,which is unique,he wants to bring a claim for specific performance.Explain why that claim may fail.Provide two (related)reasons for your answer.

Question 65

On March 1,Shoshanah agreed to manufacture and sell a widget to Marshall for a total price of $50 000.He paid $20 000 immediately and promised to pay the remainder on June 15.The contract required Shoshanah to deliver the widget to Marshall on June 1.On April 15,Marshall spent $10 000 altering his production plant in a way that would accommodate the widget that he expected to receive from Shoshanah.On May 20,Shoshanah informed Marshall that she would not be able to deliver as promised.On June 1,the market value of a widget was $65 000.Marshall can acquire a similar widget for that amount,but he will have to once again spend $10 000 in renovations to his production plant to accommodate that substitute.(No two widgets are exactly alike and each one has unique requirements. )??Is Marshall entitled to receive expectation damages? If so,on what basis and in what amount? Is Marshall entitled to receive reliance damages? If so,on what basis and in what amount? Is Marshall entitled to receive restitution? If so,on what basis and in what amount? If Marshall has an option between several types of damages,which one should he choose?

Question 66

You deliver the final payment of rent to your landlord,Jimmy.Because of a post office error,the money ends up next door at Fred's house.Fred refuses to give the money back.What action do you have against Fred?

A)Restitution because there is no contract between you and Fred,but he has been unjustly enriched
B)The court can order an injunction against Fred to return the money since there is an implied contract that has been enforced
C)Restitution because there is a contract between you and Fred and he has been unjustly enriched
D)The court can order an injunction against Fred to return the money since there is an expressed contract that has been enforced
E)You have no action against Fred and your only option is to repay your landlord

Question 67

When will punitive damages be available for a breach of contract?

Question 68

Why are the courts willing to award injunctions more often than orders for specific performance?

Question 69

A distinction is often drawn between cost of cure damages and loss of value damages.Which of those possibilities is closer to the remedy of specific performance? Explain your answer.

Question 70

Millennium Properties enter into a contract to purchase land from Oxford Management.Because Millennium wants to avoid the risk of a timely and complicated lawsuit in the case of a breach of contract,they input a clause stating the following,"If either party breaches their side of the agreement,the innocent party is entitled to $650,000." Following this,Oxford breaches the agreement and it costs Millennium $1.2 million.What action can Millennium take?

A)Millennium is entitled to $1.2 million in damages.
B)Millennium is entitled only to $650 000 in liquidated damages.
C)Millennium is entitled to $1.2 million in penalties.
D)Millennium is entitled to $650 000 in penalties.
E)Millennium is entitled to $650 000 in liquidated damages and $1.2 million in punitive damages.

Question 71

"Reliance damages cannot be used to escape the consequences of a bad bargain." Explain the meaning of that statement.Explain the justification for that rule.Provide an example that illustrates your answers.

Question 72

A man and his elderly aunt entered into an oral contract.He promised to provide services to her for the rest of her life and she promised to leave a specific house to him under her will.That house was worth $10 000.The nephew performed his end of the bargain by spending $3000 to care for his aunt before she died.He was disappointed upon her death,however,to learn that her will did not leave the house to him.The nephew thought about suing his aunt's estate for breach of contract.His lawyer has explained,however,that that action will fail because while the contract is valid,it is also unenforceable.It deals with an interest in land,but contrary to the Statute of Frauds,it was not evidenced in writing.It was entirely oral.Is there any basis upon which the nephew can successfully sue his aunt's estate? If so,will the expectations that the nephew had under the contract be fulfilled? Or will some other measure of relief be available to him? Explain your answers.

Question 73

On April 1ˢᵗ Ken entered into a contract with John to buy a rare 1983 L3 Corvette (the only one ever built)for a price of $500 000 to be picked up on April 15.On that same date,Ken paid a deposit of $100 000 with the balance due upon delivery.In preparation for the transportation of the Corvette,Ken spent $50 000 on a special cargo container.On April 5,the Arab Prince Alwaheed offered John $1 million for the Corvette,stating that the Corvette is worth at least $750 000 and to sell it for $500 000 would be foolish.John sold the Corvette to Prince Alwaheed and is refusing to release the vehicle to Ken.Ken's best course of action is to

A)sue for reliance damages in the amount of $150 000.
B)sue for expectation damages in the amount of $500 000.
C)sue for expectation damages in the amount of $1 million.
D)sue for reliance damage in the amount of $150 000 and expectation damages in the amount of $350 000.
E)sue for specific performance.

Question 74

"A contractual term for liquidated damages relieves the court of the need to carefully calculate the plaintiff's losses.A contractual term for a penalty does not have the same effect." Explain the meaning of that statement.Explain whether or not that statement is true.

Question 75

"Compensation is normally not available for intangible losses.Recently,however,Canadian courts have begun to award compensation in such circumstances if one of the purposes of the contract was to protect the plaintiff's peace of mind.In one case,for instance,an elderly couple was awarded damages for the grief that they suffered after their beloved dog was suffocated in an airplane's cargo hold.The couple had stressed to the airline,at the outset,how much the dog meant to them." On the basis of such cases,it has been suggested that compensation is available for intangible losses if they are not too remote from the defendant's breach.Formulate an argument that supports that statement.

Question 76

Berner Building Inc agreed to build a house to certain specifications for Kendra.The total contract price was $500 000.A term in that contract required Berner to use marble from a certain region in northern Italy in the main bathroom.By mistake,Berner used marble from a region in southern Italy instead.The value of the marble was the same in either event.Kendra nevertheless is unhappy.Because she had once enjoyed a wonderful honeymoon in northern Italy,she was very upset that her demands were not met.She insists that Berner should be required to renovate her bathroom using proper materials.That job would cost $25 000 and it would not increase the value of the house at all.Is Kendra entitled to any remedy? Explain your answer.

Question 77

On December 16,Ludwig agreed to sell an antique piano to Elise for $100 000.She paid $20 000 immediately and promised to pay the remainder on March 26,when he was required to deliver the instrument.Prior to the delivery date,however,Ludwig realized that the piano was really worth $175 000.He therefore refused to perform the contract.Is Elise entitled to specific performance? Identify and explain the factors that affect your answer.If Elise is entitled to specific performance,is Ludwig entitled to receive anything from her in return? If Elise is not entitled to specific performance,how much,if anything,will she receive in damages? Explain your answer.

Question 78

Slodder Construction Co entered into a contract with the City of Lowey.It agreed to build a tunnel under city hall in exchange for a total price of $5 million.Shortly after beginning the project,Slodder realized that it had entered into a very bad bargain.The job was much more difficult than initially expected.It would cost $15 million to complete.Slodder nevertheless carried on in order to protect its reputation.Somewhat surprisingly,however,after half the tunnel had been finished,Lowey breached the contract by refusing to give Slodder access to the worksite.At that point,the city had already paid $2.5 million to Slodder,and Slodder had already spent $7.5 million on the project.Before trial,another construction company completed the tunnel under a separate contract with the city.Is Slodder entitled to receive any more money from the city in the form of expectation damages or reliance damages? Explain your answer.Is there any other basis upon which Slodder can claim a remedy from Slowey? If so,how much will that remedy be worth? Explain your answer.