Deck 14: Breach and Remedies

Question 1

Nominal damages normally establish that the defendant acted wrongly.

Answer 1

True

Question 2

Damages are awarded for whatever injury a nonbreaching party suffers,whether or not the breaching party could have foreseen the injury.

Answer 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

Question 6

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

Question 7

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

Question 8

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

Question 9

On the breach of a contract involving the sale of land,money damages is always the most appro?priate remedy.

Question 10

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 11

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

Question 12

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

Question 13

Punitive damages are almost never available in contract disputes.

Question 14

On a contract breach,the nonbreaching party's only option is to refuse to perform.

Question 15

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

Question 16

The injury suffered by a nonbreaching party due to the breach of a con?tract may be remedied by payment of compensatory damages.

Question 17

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

Question 18

Compensatory damages compensate the nonbreaching party for injuries or damages sustained by that party.

Question 19

If a party breaches a contract,the other party can file a criminal complaint

Question 20

Punitive damages are never awarded in breach of contract actions.

Question 21

A party seeking to recover in quasi contract must show that he or she acted without reasonably expecting to be paid.

Question 22

Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee Stand chain.The next day,Damien tells Clarice that he has accepted a job in New York and cannot design her campaign.She files a suit against Damien.As compensatory damages,she can recover

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

Question 23

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

Question 24

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

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

Question 25

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

Question 26

A contract can include a provision stating that no damages can be recovered for certain types of breaches.

Question 27

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

Question 28

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

Question 29

Specific performance is the remedy customarily used when one party has breached a contract for personal services.

Question 30

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

A) the amount of the wages that Handy promised only.
B) the difference between the wages at the two jobs only.
C) the difference between the wages at the two jobs plus $100.
D) $100 only.

Question 31

Hybrid Corporation enters into a contract with Insure Service,Inc.(ISI),to obtain health insurance for Hybrid employees.If ISI breaches the contract and Hybrid is awarded compensatory damages,the purpose would be to

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

Question 32

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 33

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

Question 34

Liquidated damages are damages that are certain in amount.

Question 35

A breach of contract may entitle the innocent party to rescind the contract.

Question 36

Quasi contracts allow the courts to act as if a contract exists when there is no contract.

Question 37

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

Question 38

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

Question 39

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

Question 40

To rescind a contract,each party essentially advances to the position he or she would have been in if the contract had been fully executed.

Question 41

Rig Heli-Pads,Inc.,enters into a contract to employ Scott as an on-site project manager for two years.If Rig breaches the contract,Scott has a duty to

A) do nothing.
B) reduce the damages that Scott might otherwise suffer.
C) rescind the contract with Rig.
D) punish Rig and set an example to deter others from similar acts.

Question 42

Fact Pattern 14-1 (Questions 7-8 apply)
Estelle enters into a contract to buy 132 acres from Desmond to subdivide and sell in quarter-acre lots for Country Acres, a residential development.
Refer to Fact Pattern 14-1.If Estelle breaches the contract,Desmond's remedy would most likely be

A) a certain ratio of the amount that Estelle has in liquid funds.
B) a percentage of Estelle's unrealized profit.
C) the difference between the land's contract and market prices.
D) specific performance.

Question 43

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 44

Pure Oil Company enters into a contract with QuikBilt,Inc.,to construct an 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 45

Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corpo?ration.Fresh Food does not pay for the storage.Earl sells the fruit to Green Grocers,Inc.This sale represents

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

Question 46

Mona contracts to repair a computer for NuData,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 47

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 48

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 49

Development Associates (DA)agrees to buy five acres of land from Eastside Properties for $15,000.Eastside sells the acreage to Fealty Realty,and fails to go through with DA's 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 50

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

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 51

Home Delivery Corporation and Interstate Transport,Inc.,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 52

Medical Centre enters into a contract with Local Motion Fitness Club for discounted memberships for the Centre's employees.If the Club breaches the contract and the Centre enters into a contract with KO Sports for the same service at a lower price,the Centre might be awarded nominal damages to

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

Question 53

Dobry Die & Mold,Inc.,enters into a contract with Chet's Refitting Service to fix Dobry's precisely engineered molding equipment.If Chet's delays the repair for five days,knowing that Dobry will lose a certain percentage of profit for the delay,Dobry might be awarded consequential damages to

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

Question 54

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

A) $3,000.
B) $2,000.
C) $1,000.
D) $0.

Question 55

Fact Pattern 14-1 (Questions 7-8 apply)
Estelle enters into a contract to buy 132 acres from Desmond to subdivide and sell in quarter-acre lots for Country Acres, a residential development.
Refer to Fact Pattern 14-1.If Desmond breaches the contract,Estelle's remedy would most likely be

A) a certain ratio of the amount that Desmond has in liquid funds.
B) a percentage of Desmond's unrealized profit.
C) the difference between the land's contract and market prices.
D) specific performance.

Question 56

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

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

Question 57

Drew contracts to sell a residential duplex to Evan.The contract pro?vides that if Drew does not close the deal by September 15,he must pay Evan one-half of the contract price.This provision is not enforceable be?cause it is

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

Question 58

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

A) $13,000.
B) $10,000.
C) $3,000.
D) $0.

Question 59

Mikayla enters into a contract with Logan to provide surface material for Mikayla's tennis courts by April 1 for a tournament to begin May 1.The contract specifies an amount to be paid if the contract is breached.This is a liquidated damages clause if the amount is

A) an excessive estimate of the loss on a breach.
B) a reasonable estimate of the loss on a breach.
C) designed to penalize the breaching party.
D) intended to quickly provide cash to the nonbreaching party.

Question 60

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 61

Rural 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.If the parties rescind the contract,Shovel's refund of the payment would be

A) a penalty.
B) liquidated damages.
C) restitution.
D) specific performance.

Question 62

Karson orally agrees to pay Jaime to plant and harvest a quarter of Karson's farm acreage for four corn-planting seasons.After Jaime prepares the land and plants the first crop,Karson says that their deal is off.Jaime can most likely recover

A) in quasi contract.
B) in reformation.
C) in restitution.
D) on the parties' existing contract.

Question 63

General Equity Corporation enters into a contract with Honi,who agrees to create artwork for General's main office building.Honi delays and eventually refuses to perform.Meanwhile,General contracts to sell the building to Ideal Investments,Inc.,but before the transaction is complete,Jewel Funds Company offers to pay a higher price.General re?fuses to transfer the building to Ideal.In separate suits by General against Honi and by Ideal against General,each plaintiff seeks specific performance.How might the court rule in each case,and why?

Question 64

A contract between E-Debits,Inc.,and First Credit Corporation includes a provision excluding liability as a result of fraud.This provision is

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

Question 65

Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch.If Hollis breaches the contract,Grady's normal remedy would be

A) damages.
B) quasi contract.
C) reformation.
D) specific performance.

Question 66

Dino hires Eve to perform at Dino's Club,but Eve later breaches the agreement to accept a higher-paying job at First Star Arena.Dino files a suit against Eve.The court will most likely

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

Question 67

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 68

To avoid liability for intentional injuries,Vermont 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 69

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 70

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 71

Creekside Property Corporation enters into a contract with Downstream Management Associates to manage and maintain Creekside'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) an illegal clause.
D) a quasi contract.

Question 72

Lou and Mira want to rescind their contract under which Lou sold an MP3 player to Mira for $50.To rescind the contract

A) Lou must return the $50 and Mira must return the player.
B) Lou must return the $50 only.
C) Mira must return the player only.
D) the parties can keep the "benefits" of their bargain.