Deck 8: Remedies for Breach of Traditional and E-Contracts

Question 1

Specific performance is the most common remedy for a breach of contract.

Answer 1

False

Question 2

When performance is tendered,this will discharge a party's contractual obligations.

Answer 2

True

Question 3

Inferior performance that impairs or destroys the essence of the contract will not allow the nonbreaching party the option to rescind the contract.

Answer 3

False

Question 4

When there is substantial performance of a contract with a minor breach,the other nonbreaching party may sue to recover the cost to repair the defect.

Question 5

A contractor is generally entitled to recover any lost profits on a contract breached by the client.

Question 6

Only those consequential damages that are unforeseeable can be collected.

Question 7

In the Super Valu Stores,Inc.v.Peterson case,the court refused to grant damages for lost profits,because the store involved had not been built.

Question 8

A buyer can generally recover the additional cost of acquiring substitute goods if the seller breaches by not delivering the goods.

Question 9

Liquidated damages will be invalidated if they are unreasonably large or small.

Question 10

If an employee breaches an employment contract,the employer can recover the costs incurred to replace the employee,plus any increase in salary paid to the new employee in excess of what would have been paid to the old employee.

Question 11

Substantial performance constitutes a minor breach of the contract.

Question 12

The primary goal of compensatory damages is to compensate a nonbreaching party for the loss of the bargain.

Question 13

Tender of performance is another term for completion of performance.

Question 14

A liquidated damages provision will be validated if it is considered to be a penalty.

Question 15

When there is an anticipatory breach,the nonbreaching party's obligations under the contract are discharged immediately.

Question 16

A breach of a contract cannot occur until the time for performance of the duty in question.

Question 17

The UCC governs damages for a breach of a sales contract involving goods.

Question 18

When one party materially breaches a contract,the other nonbreaching party is discharged from any further performance.

Question 19

Lost profits can be recovered as consequential damages only if they are related to an existing established business.

Question 20

A material breach allows the other party to rescind a contract.

Question 21

When one party substantially,but not completely,performs a contract,creating a minor breach,which of the following remedies may the aggrieved party choose?

A)Deduct the cost necessary to complete performance from the payment due to the breaching party.
B)Sue the breaching party for the cost to complete performance.
C)Rescind the contract.
D)A,B,and C.
E)A and B only.

Question 22

Specific performance is usually available for the buyer in contracts for the sale of land.

Question 23

Where the man has given a ring to a woman in connection with an engagement,the modern rule requires that the ring be returned to the man regardless of who breaks off the engagement.

Question 24

A recovery in quasi-contract is based on the fair value of the goods or services provided.

Question 25

Mitigation of damages is no longer necessary in the area of employment law.

Question 26

Many states have held that there is an implied covenant of good faith and fair dealing in certain contracts.

Question 27

The general standard to obtain an injunction is that the party seeking the injunction would suffer irreparable injury without the injunction.

Question 28

What is tender of performance in connection with a contract?

A)One party's completion of duties under the contract.
B)A party's offering substitute performance that is superior to the performance called for in the contract.
C)Performance whose terms have been ordered by the court.
D)An unconditional offer by a contracting party to perform his or her obligations under a contract.

Question 29

If Julia agrees to construct a platinum sailboat with green emeralds all around the bow of the boat and Ted decides to halt construction in the middle of the project,Julia may seek reformation of her contract with Ted to show she really intended to have him put rubies along the bow instead.

Question 30

Intentional interference with contractual relations requires a showing of bad faith before liability can be imposed.

Question 31

Rescission and restitution are designed to give the parties the benefit of the bargain.

Question 32

Punitive damages are always available for breach of contract.

Question 33

Reformation permits the court to order the breaching party to perform the acts promised in the contract.

Question 34

Specific performance is the primary remedy used to make a party live up to his/her obligations under a personal services contract.

Question 35

The downfall of using equitable remedies is that they do not prevent unjust enrichment.

Question 36

When rescinding a contract,the parties must make restitution of the consideration they received under the contract.

Question 37

When an employer breaches an employment contract,if the employer offers substitute employment to the employee,the doctrine of mitigation places a duty on the employee to accept the work so long as the employee is capable of doing the work.

Question 38

Equitable remedies are available if there has been a breach of contract that cannot be adequately compensated by a legal remedy.

Question 39

A contract that has been fully performed by all parties is said to be:

A)Executed.
B)Tendered.
C)Mitigated.
D)Liquidated.
E)Substantiated.

Question 40

Cases involving nominal damages are generally brought on "principle."

Question 41

George,an employee,breaches a fixed-term employment contract by quitting before the end of the term.What can his employer,MNO Inc. ,recover as damages?

A)Nothing,because courts do not order anyone to perform a job against his or her will.
B)All amounts already paid to the employee under the contract.
C)Only amounts paid to the employee for which the employee has not yet done the work.
D)The costs of hiring a replacement employee plus any increase in salary paid to the replacement employee.

Question 42

What distinguishes an anticipatory breach from other breaches?

A)It involves a breach by each party to the contract.
B)It entitles the nonbreaching party to consequential damages.
C)It occurs in connection with substantial performance.
D)It is a foreseeable breach.
E)It occurs prior to the time that performance is due.

Question 43

The general requirements for a liquidated damages clause to be enforceable are that:

A)Actual damages are difficult to determine and the liquidated damages amount is reasonable.
B)Actual damages exceed the amount foreseen by the parties.
C)The liquidated damages clause applies only to unforeseeable damages.
D)The breaching party used its best efforts to avoid a breach of the contract.
E)The parties have rescinded the contract.

Question 44

Under which kind(s)of performance by the other party can a party rescind a contract?

A)Substantial performance.
B)Inferior performance.
C)Both A and B.
D)Neither A nor B.

Question 45

Which of the following types of damages could generally be simultaneously recovered in the same breach of contract action?

A)Punitive and compensatory.
B)Compensatory and liquidated.
C)Punitive and liquidated.
D)Compensatory and consequential.
E)Consequential and liquidated.

Question 46

What does the term "mitigation" refer to in connection with damages?

A)The calculation of lost profits in determining damages.
B)The duty of the breaching party to make a damages payment as soon as practical.
C)The combination of the different kinds of damages into a single dollar amount.
D)The duty of a nonbreaching party to make reasonable efforts to reduce damages.
E)The requirement of the nonbreaching party to allow the breaching party one final chance to perform the contract before being entitled to collect damages.

Question 47

Damages that are fixed in the contract for the amount to be awarded in the event of a breach are known as:

A)Punitive damages.
B)Liquidated damages.
C)Consequential damages.
D)Conditional damages.

Question 48

Another term for consequential damages is:

A)Special.
B)Remedial.
C)Liquidated.
D)Nominal.
E)Distinguishable.

Question 49

When a client breaches a contract with a construction contractor in the early phase of construction,what is the contractor generally able to recover?

A)The amount of the contract price.
B)Only the out-of-pocket costs incurred by the contractor up to the time of the breach.
C)The amount necessary to provide the same profit to the contractor that the contractor would have earned if the contract were fully performed.
D)Three times the contract price as punitive damages.
E)The amount determined by the court to have been a fair profit on the contract.

Question 50

When the other party commits an anticipatory breach,the nonbreaching party:

A)Must wait until the performance was due before suing.
B)Is immediately discharged from her own duties.
C)Is not able to seek damages because she received advance notice of the breach.
D)Is usually able to seek specific performance.

Question 51

What are liquidated damages in connection with a contract?

A)Damages that are used to punish the nonbreaching party.
B)Damages that are set at a fixed amount in advance in the contract.
C)Damages that are used when there are no actual damages.
D)Damages that require approval in advance from the court.
E)Damages that result in all assets of the breaching party being paid out as damages.

Question 52

A minor breach is most directly associated with:

A)Strict performance.
B)Tender of performance.
C)Complete performance.
D)Substantial performance.
E)Inferior performance.

Question 53

Which is the most basic or common remedy available for the breach of a contract?

A)Compensatory damages.
B)Consequential damages.
C)Punitive damages.
D)Nominal damages.
E)Equitable damages.

Question 54

"Benefit of the bargain" is descriptive of which type of damages?

A)Compensatory damages.
B)Punitive damages.
C)Reliance damages.
D)Liquidated damages.
E)Injunction damages.

Question 55

Which of the following damages must be foreseeable in order to be collected?

A)Consequential.
B)Nominal and liquidated.
C)Compensatory,consequential,and punitive.
D)Consequential and compensatory.
E)Liquidated and compensatory.

Question 56

What is the general goal of awarding compensatory damages in a breach of contract situation?

A)Return the parties to the situation that they were in prior to the contract.
B)Punish the breaching party for the wrongdoing.
C)Modify the contract terms to be more equitable to the parties.
D)Place the nonbreaching party in the same position as if the contract had been fully performed.
E)Require the breaching party to actually do what was called for in the contract.

Question 57

When an employer breaches an employment contract,what obligation does the employee have in seeking substitute employment?

A)Because it was the employer who breached,the employee has no obligation to seek substitute employment.
B)The employee must accept any employment available with the same employer,but is not required to accept any substitute employment with a different employer.
C)The employee must accept any employment available with a different employer,but is not required to accept any substitute employment with the same employer.
D)The employee is obligated to accept any employment for which the employee is qualified.
E)The employee is obligated to accept substitute employment only if it is comparable employment.

Question 58

Based on the Alabama Supreme Court case discussed in the text involving the lost profits in connection with a grocery store,what is the general requirement in order for lost profits to be awarded in a breach of contract case?

A)There must be an established business that has a record of earning profits in the past and it must be proven that lost profits would have been earned in the absence of the breach.
B)There must be an established business,but a record of past profits is not necessary so long as it can be proven that the profits would have been earned in the absence of the breach.
C)Lost profits can be recovered,whether or not the related business was an actual established business,so long as the lost profits can be proven with reasonable certainty.
D)Lost profits generally cannot be recovered because they are too speculative in nature.

Question 59

The doctrine that places a duty on a nonbreaching party to take reasonable steps to reduce damages is called:

A)Liquidation.
B)Mitigation.
C)Garnishment.
D)Avoidance.
E)Reciprocal duties.

Question 60

What kinds of damages will be awarded when there is no actual financial loss?

A)Special damages.
B)Consequential damages.
C)Nominal damages.
D)Compensatory damages.
E)There are no damages that a court will award in the absence of an actual financial loss.

Question 61

Assume that a car owner contracts with a mechanic to have his engine overhauled.The mechanic mistakenly used original equipment quality piston rings in doing the overhaul,whereas the contract had called for the use of premium-quality rings that are better than original equipment quality.Which of the following is true?

A)This is a substantial performance,and the owner must still pay something to the mechanic.
B)This is a material breach,and the owner must still pay something to the mechanic.
C)This is a substantial performance,and the owner owes nothing to the mechanic.
D)This is a material breach,and the owner owes nothing to the mechanic.
E)This is a novation,and the owner owes nothing to the mechanic.

Question 62

In connection with a contract,what is rescission?

A)A court order to perform one's duties under a contract.
B)A return of consideration to the other party.
C)An undoing or cancellation of the contract.
D)A formation of a second contract identical to the first.

Question 63

A construction contractor entered into a contract to build a family room addition onto Harry's home for $25,000.In order to encourage timely performance,the agreement provided that the contractor would be penalized $2,000 as liquidated damages for each day that the project was late in getting finished.The contractor was 30 days late in finishing the project,but otherwise met the terms of the agreement.What is most likely in this situation?

A)The liquidated damages clause would not be enforced due to its being excessive.
B)The liquidated damages clause would be limited to $25,000,the amount of the contract price.
C)The liquidated damages clause would be enforced.
D)The liquidated damages clause would not be enforced because the parties made a mutual mistake about when the contract would be finished.

Question 64

Henry took his Porsche to the shop for repairs,but it was not ready on Friday afternoon as had been agreed to.Henry was then unable to rent the car to his sister on Saturday for $400 to use in her wedding.Henry paid $60 to rent a car on Sunday for a trip to the mountains.The car repair shop knew about neither of Henry's planned uses of the car that weekend.Which is true?

A)Henry can collect for neither amount because the car repair shop was unaware of them.
B)Henry can collect for both amounts because the shop was the cause of his losses.
C)Henry can collect for the car rental,but not for the money his sister would have paid.
D)Henry can collect for both amounts and will likely recover punitive damages as well.
E)Henry can collect nothing because his greediness with his sister is against public policy.

Question 65

Should there be such a tort as the intentional interference with contractual relations? Even though one person might induce another to breach a contract,isn't it ultimately the choice of that other person to breach the contract? Why should one be liable if that person was not the one who actually breached the contract?

Question 66

Paul is an organic biologist who teaches classes occasionally at a local college.Paul is a wonderful professor with a unique style of teaching.In the third week of the semester,Paul notified the school that he was suddenly too busy to teach that semester.Which of the following is true?

A)Because of his unique style,the college could get an order of specific performance.
B)Paul would be obligated to pay the salary of any replacement that the school was able to find.
C)The school would not be able to recover from Paul for excessive amounts that it paid to a replacement instructor.
D)The school would be able to obtain an injunction against Paul ordering him to teach the course.
E)Paul would be discharged from his duty to teach because of commercial impracticability.

Question 67

Specific performance is generally awarded:

A)In cases where nominal damages are also awarded.
B)Where the contract involves the sale of property that is unique.
C)Only under the UCC
D)When the nonbreaching party requests it.
E)Only if provided for in a liquidated damages clause.

Question 68

Alice has a contract with a surgeon to have a medical procedure performed on July 17.The surgeon notifies Alice on July 5 that he is in the Bahamas and will be there until the end of August and will not be able to do the surgery.Which of the following is true at this point?

A)There will be no breach until July 17.
B)Alice must wait until July 17,and if the surgeon does not perform the procedure,then Alice can contract with another surgeon.
C)If Alice contracts with another surgeon prior to July 17,and this second surgeon is aware of Alice's original contract,the second surgeon has no obligation to perform.
D)Alice is free to contract with another surgeon.

Question 69

When a court rewrites a contract to express the parties' true intentions,what remedy has it used?

A)Reformation.
B)Restitution.
C)Specific performance.
D)Substituted contract.
E)Quasi-contract.

Question 70

Waldo washes windows with Worldwide Window Washers.Waldo has just begun the second year of a 3-year contract that pays him $30,000 per year.Even though Waldo has performed his job perfectly,he was suddenly told that his contract was being terminated.Waldo was offered a couple of other jobs shortly after this contract was terminated.The first was as a custodian in a city 200 miles away paying $24,000 a year.The second was as a cook in a local fast food restaurant paying $22,000 a year.Waldo took neither job.In connection with his duty to mitigate,which of the following is true?

A)Waldo would not be obligated to accept the custodian job.
B)Waldo would not be obligated to accept the cook job.
C)Waldo would be obligated to accept neither job.
D)Waldo would be obligated to accept one of the jobs,but the choice of which one was up to Waldo.
E)Waldo is not obligated to accept any job of any kind for the duration of the contract that was breached.

Question 71

When,generally,are equitable remedies available?

A)They are usually the first remedy that a court will try to apply.
B)They are required to be used alongside any legal remedy.
C)They are only awarded when a breach of contract case has been appealed.
D)They are used when the legal remedy does not adequately compensate the nonbreaching party.

Question 72

What is required in order for a court to issue an injunction?

A)Any breach of contract will justify an injunction.
B)Any breach of contract that causes injury to the other party will justify an injunction.
C)Any situation that entitles the award of specific performance.
D)A showing that the party requesting the injunction would suffer irreparable injury without the injunction.
E)Proof that the party requesting the injunction would win any breach of contract lawsuit.

Question 73

Creative Charlie had sketched plans for an invention,but had not yet built a prototype.He wanted to make sure that the invention could actually be manufactured before going through the expense of applying for a patent.He contracted with a local machine shop to work on the prototypes.As part of the agreement,the machine shop agreed not to disclose any information about the invention.Charlie learned from one of the employees that the owner of the machine shop had successfully built a prototype without telling Charlie and that the owner was going to begin marketing the invention in a joint venture with another firm.Could Charlie get an injunction in this situation?

A)No,this is a situation where the only allowable damages would be liquidated damages.
B)No,Charlie could be adequately compensated with compensatory damages.
C)Yes,assuming that Charlie would likely suffer irreparable harm if others learn of his invention and it becomes public before he can obtain a patent.
D)Yes,because this is an anticipatory breach and injunctions can be issued in connection with any anticipatory breach.

Question 74

Painter contracts to paint the interior of Owner's home for $2,000.In each of the following unrelated examples,indicate what amount of damages Owner is entitled to recover from Painter.
A.Painter stops work when halfway finished.Owner pays someone else $1,700,a reasonable amount,to finish the work.Owner has paid Painter $700.
B.Painter stops work when 75 percent finished with the job.Owner pays someone else $1,500,a reasonable amount,to finish the work.Owner has paid Painter $700.
C.Painter stops work when 50 percent finished with the job.Owner pays someone else $1,800 to finish the job,but could have paid yet another person $1,500 to finish it.Owner has paid Painter $700.
D.Painter stops work when 50 percent finished with the job.Painter finds someone who will finish the work for $1,100.However,the delay caused $200 in water damage and Owner missed an opportunity to rent an upstairs apartment in the home for $400 per month.Owner has paid the original painter $1,200 and the new painter $1,100.

Question 75

Which of the following is true about rescission and restitution?

A)Rescission and restitution are designed to give the nonbreaching party the benefit of the bargain.
B)Rescission and restitution are the primary and most common remedies for breach of contract.
C)Rescission and restitution can occur separately,but they usually occur together.
D)Rescission and restitution are available only when the subject matter of the contract is unique.

Question 76

Pat Painter contracts to paint Harry Homeowner's home for $6,000.Pat would supply all materials at a cost to Pat of $1,000.Harry breaches by refusing to let Pat paint the house,which Pat found out before spending any money on the materials.Pat is able to find another job that nets a profit of $4,200 during that same time that Harry's house was to be painted.How much can Pat recover from Harry in damages?

A)$1.
B)$800.
C)$1,800.
D)$3,200.
E)$5,000.

Question 77

Liquidated damages clauses will generally not be enforced where courts view them as excessive,but courts generally do not inquire into whether liquidated damages clauses are too small.For example,when taking a roll of film to be developed,most developers include a liquidated damages clause to provide a new roll of film,and nothing more,in the event that the customer's film is lost or destroyed.Why is there this difference in treatment? Do you agree with this rule?

Question 78

Which of the following is true about the recovery of punitive damages in connection with contracts?

A)They are recoverable whenever a breach of contract is intentional.
B)If awarded,they are held by the court to be distributed to other parties with whom the defendant has breached a contract.
C)They can be covered for tortious conduct in connection with a contract,but generally not for the breach of a contract.
D)They are awarded only by an appellate court.

Question 79

Why is the general measure of compensatory damages "benefit of the bargain" rather than a measure based on returning the parties to the position that they were in prior to the contract? What do you think is the best approach?

Question 80

When a court orders specific performance,it:

A)Orders monetary damages to be paid by the breaching party to the nonbreaching party.
B)Modifies the contract terms in order to maximize the fairness to both parties.
C)Orders a party to a contract to do exactly what was called for in the contract.
D)Orders a party to return any and all consideration received.