Question 1

A waiver of a breach may be either express or implied.

Accepted Answer

A waiver of a breach may be explicitly stated (express) or implied through the actions of the party who would have the right to enforce the breach.

Question 2

Damages in excess of actual loss, imposed for the purpose of punishing or making an example of the defendant, are known as compensatory damages.

Accepted Answer

Damages in excess of actual loss, imposed for the purpose of punishing or making an example of the defendant, are known as punitive damages, not compensatory damages.

Question 3

If there is a breach of contract, the law requires that the other party terminate the contract and bring a lawsuit.

Accepted Answer

The law does not require the other party to terminate the contract and bring a lawsuit. The non-breaching party has the option to terminate the contract and/or pursue a lawsuit for damages.

Question 4

When one party breaks the contract, the contract is said to be breached.

Accepted Answer

When one party fails to fulfill their obligations stated in the contract, they are said to have breached the contract.

Question 5

The normal remedy for breach of contract where the plaintiff has suffered a loss is compensatory damages.

Accepted Answer

Compensatory damages are a common remedy for breach of contract where the plaintiff has suffered a loss.

Question 6

An anticipatory repudiation must be clear, absolute, and unequivocal.

Accepted Answer

An anticipatory repudiation occurs when one party to a contract informs the other party that they will not perform their contractual obligations in the future. For the repudiation to be effective, it must be clear, absolute, and unequivocal. This means that the repudiating party must clearly and unambiguously communicate their intention not to perform, without leaving any room for interpretation or doubt. Therefore, the statement is true.

Question 7

An injured party that does not suffer an actual loss from the breach of a contract is entitled to nominal damages.

Accepted Answer

Nominal damages are a small amount of money awarded to a plaintiff in a lawsuit to signify that their legal rights have been violated, even if they do not suffer any actual loss or harm. Therefore, an injured party that does not suffer an actual loss from the breach of a contract is entitled to nominal damages.

Question 8

A reservation of rights is an assertion by a party to a contract that even though a tendered performance is accepted, the right to damages for the nonconformity to the contract is reserved.

Accepted Answer

A reservation of rights allows a party to accept a performance that is not fully conforming to the contract, but still preserve their right to seek damages for any nonconformities.

Question 9

When a party waives compliance with one provision of a contract, the other party may thereafter ignore other provisions of that contract.

Accepted Answer

Waiving compliance with one provision does not automatically waive compliance with other provisions. Each provision of a contract must be considered on a case-by-case basis.

Question 10

Whether there has been a waiver is a question of fact.

Accepted Answer

Whether a waiver has occurred requires analysis of the specific circumstances and actions of the parties involved, making it a question of fact rather than a matter of law.

Question 11

Consequential damages are those that necessarily flow from the breach.

Accepted Answer

The answer of Consequential damages are those that necessarily flow...

Question 12

The measure of monetary damages when there has been a breach of contract is the sum of money that will place the injured party in the same position that would have been attained if the contract had been performed.

Accepted Answer

This is the principle of compensatory damages, which is the most common measure of damages for breach of contract. Its purpose is to compensate the injured party for the loss suffered as a result of the breach and to restore them to the economic position they would have been in if the contract had been performed.

Question 13

Only direct losses from a breach of contract may be recovered by an injured party.

Accepted Answer

Both direct and consequential (indirect) losses may be recovered if they are foreseeable at the time the contract was made and are a result of the breach, according to the principle established in Hadley v Baxendale.

Question 14

Consequential damages may not be recovered, even if they were within the contemplation of the parties at the time of contracting.

Accepted Answer

Consequential damages can be recovered if they were foreseeable and within the contemplation of the parties at the time of contracting, as established by the Hadley v. Baxendale case.

Question 15

Punitive damages are generally recoverable in contract actions.

Accepted Answer

Punitive damages are not generally recoverable in contract actions. They are typically only awarded in cases of intentional wrongdoing or gross negligence, and are more commonly associated with tort actions.

Question 16

An acceptance with a reservation of right must be in writing.

Accepted Answer

The answer of An acceptance with a reservation of right...

Question 17

A party injured by the other party's anticipatory repudiation of a contract has the right to bring suit at the time of the repudiation, and before the date on which performance is due.

Accepted Answer

This is known as anticipatory breach or anticipatory repudiation, and the non-breaching party has the right to treat the contract as terminated and sue for damages at the time of the repudiation, before the performance is due.

Question 18

If one party to a contract breaks the contract, the other party generally is under a duty to stop any further performance to avoid sustaining greater damages.

Accepted Answer

This is known as the duty to mitigate damages, which requires the non-breaching party to take reasonable steps to minimize the harm suffered as a result of the breach.

Question 19

Damages representing annoyance ordinarily may not be recovered in a breach-of-contract action.

Accepted Answer

Typically, damages for annoyance or inconvenience are considered too speculative or subjective to be quantified and awarded in a breach-of-contract action. Courts usually require proof of specific, measurable losses or damages resulting from the breach.

Question 20

When a party expressly declares before the time for performance arrives that the contract will not be performed, such a declaration is called an anticipatory repudiation.

Accepted Answer

When a party declares that they will not perform the contract before the time for performance arrives, it is known as an anticipatory repudiation.

Quiz 20: Breach of Contract and Remedies