Question 1

Joe paid Sam a debt owed of $50,000 by giving him 10,000 $5 bills. Sam refused to accept the payment. Explain this legal position.

Accepted Answer

The answer of Joe paid Sam a debt owed of...

Question 2

An injunction is designed to punish someone for breaching a contract.

Accepted Answer

An injunction is a court order that either restrains a party from doing something or requires them to do something, primarily aimed at preventing harm, rather than punishing the breaching party.

Question 3

Victims of breach have a duty to mitigate damages, meaning they must do what they can to keep those damages as low as possible.

Accepted Answer

In legal contexts, victims of a breach (such as a breach of contract) are generally expected to mitigate damages, which means they should take reasonable actions to minimize the harm or loss resulting from the breach.

Question 4

The courts prefer to grant an equitable remedy where a breach of contract has taken place.

Accepted Answer

Courts typically prefer to grant legal remedies, such as monetary damages, for breaches of contract, reserving equitable remedies (like specific performance or injunctions) for cases where legal remedies are inadequate.

Question 5

Explain under what circumstances a creditor would be entitled to refuse to accept payment proffered to him on or before the payment due date.

Accepted Answer

The answer of Explain under what circumstances a creditor would...

Question 6

Injunction is an example of an equitable remedy.

Accepted Answer

An injunction is a court order requiring a party to do or cease doing a specific action, which is indeed an example of an equitable remedy, as it seeks to provide a solution based on fairness rather than monetary compensation.

Question 7

Joe owed Harry $500, but Harry was confused when Joe came to pay it back and Harry refused to take the money for the payment. Explain Joe's legal position.

Accepted Answer

The answer of Joe owed Harry $500, but Harry was...

Question 8

The courts are extremely reluctant to grant any compensation for the breaching party's partial performance of the agreement, unless the contractual obligations have been substantially performed.

Accepted Answer

Courts generally require that contractual obligations be substantially performed before granting compensation for partial performance, as this ensures that the breaching party has met the essence of the contract's terms.

Question 9

A breaching party is responsible for all lost profits flowing from a breach of contract.

Accepted Answer

A breaching party is responsible for foreseeable lost profits that are a direct consequence of the breach, not all conceivable lost profits. The damages must be proven with reasonable certainty and must have been within the contemplation of both parties at the time the contract was formed.

Question 10

If a contractor has agreed to build a house with payment due upon completion of the job and refuses to continue after completing half, he will not be successful in claiming compensation for what he has done.

Accepted Answer

The contractor has not fulfilled the terms of the agreement and is therefore not entitled to compensation.

Question 11

The victim of a breach cannot recover damages that he could have avoided if he had made a reasonable effort.

Accepted Answer

This principle is known as the duty to mitigate damages, which requires the victim of a breach to take reasonable steps to minimize the harm caused by the breach and cannot recover damages that could have been avoided with such efforts.

Question 12

The courts will grant an order of specific performance to compel performance of a contract for personal services.

Accepted Answer

Courts typically do not grant orders of specific performance for contracts involving personal services due to the difficulty in supervising the performance and the personal nature of the services.

Question 13

Will anything short of the complete performance of the contractual terms amount to performance of the contract and discharge the agreement?

Accepted Answer

The answer of Will anything short of the complete performance...

Question 14

Indicate the various ways that the contractual relationship can come to an end.

Accepted Answer

The answer of Indicate the various ways that the contractual...

Question 15

Failure to make an installment payment will often trigger an acceleration clause, which makes the entire outstanding debt due and payable immediately.

Accepted Answer

An acceleration clause is a provision in a loan agreement that allows the lender to require a borrower to repay all of an outstanding loan if certain requirements are not met, such as missing an installment payment.

Question 16

An injunction involves a court order to do something (to perform the contract), whereas specific performance usually involves an order to refrain from some offensive conduct.

Accepted Answer

An injunction is a court order to refrain from a particular act, while specific performance is a court order to perform the terms of a contract.

Question 17

Damages are an example of an equitable remedy.

Accepted Answer

Damages are a legal remedy involving monetary compensation, whereas equitable remedies typically involve actions such as injunctions or specific performance.

Question 18

In rare circumstances, the courts may issue a mandatory injunction when a person does something to violate a contractual term and thereby creates an ongoing problem.

Accepted Answer

Courts can issue mandatory injunctions to compel a party to take a specific action, especially when it's necessary to prevent ongoing harm or to rectify a situation caused by a breach of contract.

Question 19

Explain under what circumstances the tender of performance and its refusal will be treated as performance of the contractual obligation.

Accepted Answer

The answer of Explain under what circumstances the tender of...

Question 20

A deposit must be returned if no damage has taken place.

Accepted Answer

The answer of A deposit must be returned if no...

Quiz 9: The End of the Contractual Relationship