Deck 18: Breach of Contract and Remedies

Question 1

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

Answer 1

True

Question 2

A party seeking to recover compensatory damages may also be entitled to recover in?cidental damages.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

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 7

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

Question 8

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

Question 9

If a party breaches a contract, the other party can only refuse to perform.

Question 10

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

Question 11

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 12

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

Question 13

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 14

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

Question 15

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

Question 16

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

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

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

Question 19

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

Question 20

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

Question 21

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

Question 22

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

Question 23

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

Question 24

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

Question 25

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

Question 26

Nominal damages normally establish that the defendant acted wrongly.

Question 27

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

Question 28

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

Question 29

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

Question 30

Punitive damages are never awarded in breach of contract actions.

Question 31

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 32

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

Question 33

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

Question 34

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

Question 35

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

Question 36

Punitive damages are almost never available in contract disputes.

Question 37

Liquidated damages are damages that are certain in amount.

Question 38

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

Question 39

A party who knowingly accepts defective performance of a contract thereby acknowledges the breach and can take later action on it.

Question 40

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

Question 41

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 42

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 43

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 44

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 45

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

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

Question 46

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 47

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 48

Fact Pattern 18-B1
A enters into a contract to buy 132 acres from B to subdivide and sell in quarter-acre lots for C Acres, a residential development.
Refer to Fact Pattern 18-B1. If B breaches the contract, A's remedy would most likely be

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

Question 49

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 50

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 51

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

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

Question 52

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

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

Question 53

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 54

Fact Pattern 18-B1
A enters into a contract to buy 132 acres from B to subdivide and sell in quarter-acre lots for C Acres, a residential development.
Refer to Fact Pattern 18-B1. If A breaches the contract, B's remedy would most likely be

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

Question 55

A enters into a contract with B Fitness Club for discounted memberships for A's employees. If B breaches the contract and A enters into a contract with D Sports for the same service at a lower price, A might be awarded nominal damages to

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

Question 56

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 57

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 58

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 59

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 60

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 61

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

Question 62

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 63

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 64

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 65

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 66

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

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

Question 67

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 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

Value Acquisitions, Inc., contracts to buy Wobbling Corporation's as?sets. Wobbling breaches the contract. Value files a suit against Wobbling, seeking various remedies. The doc?trine of election of remedies has been elimi?nated in contracts involving sales of

A) goods.
B) intellectual property.
C) real property.
D) services.

Question 70

A contract for a sale of land from United Properties, Inc., to Variety 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 71

A enters into a contract with B to provide surface material for A'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 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.

Question 73

Creekside Property Corporation enters into a contract with Delta 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 74

For Petra to recover the benefit of her bargain from a breached real estate contract with Quality Properties, Inc., the most appropriate remedy is

A) damages.
B) quasi-contractual recovery.
C) rescission.
D) specific performance.

Question 75

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 76

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 77

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 78

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 79

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 80

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.