Question 1

What is the doctrine that prevents a person from suing or being sued for breach of a contract to which they are not a party?

Accepted Answer

The doctrine of privity of contract prevents a person from suing or being sued for breach of a contract to which they are not a party. This means that only the parties who entered into the contract can enforce it, and nobody else can claim any rights or benefits under it.

Question 2

Which of the following statements is true of 'direct loss' arising from a breach of contract by a defendant?

Accepted Answer

Direct loss is loss that flows naturally from the breach according to the ordinary course of events. This means that it is the loss that the parties would have reasonably expected to result from the breach at the time the contract was formed. It does not include special or extraordinary damages, and does not require the parties to have specifically considered the possibility of such loss when forming the contract.

Question 3

A party will be able to enforce a quantum meruit payment for a partially performed a contract where:

Accepted Answer

A quantum meruit payment is a payment for the value of the work done, and it is typically only available when a contract has been partially performed. Divisible contracts are contracts in which the obligations are capable of being divided into discrete stages or parts. If a party has partially completed stages of a divisible contract, they may be able to enforce a quantum meruit payment for the work done, even if they have not fully performed all their obligations under the contract. Choices A, B, and C indicate situations in which the party has not made any effort to perform or has clearly indicated that they will not perform, which are not situations where quantum meruit payments are typically available.

Question 4

Where one party breaches a contract, the other party is under an obligation to 'mitigate' their loss.This means the other party:

Accepted Answer

When one party breaches a contract, the other party has an obligation to take all reasonable steps to minimise their loss. This is called the duty to mitigate. The duty to mitigate requires the non-breaching party to take reasonable steps to mitigate their loss, such as finding a replacement supplier or customer, or taking legal action to recover damages. The non-breaching party has no duty to take any positive action to avoid future harm arising from the breach, but they must do whatever is necessary to minimise loss arising from the breach. The non-breaching party must also provide the party in breach with all necessary records and information relevant to quantification of their loss and damage.

Question 5

Rescission is remedy that is not available where the breach of contract involves:

Accepted Answer

Rescission is a remedy typically available for more serious breaches, such as complete non-performance, breach of a condition, or anticipatory breach. It is not generally available for minor breaches, such as a breach of a warranty, which does not go to the root of the contract.

Question 6

X contracts with Y to purchase 1000 sacks of grain to be delivered on 1 September.Y however delivers the grain to X on 8 September and as a result of a drop in grain prices during the delay, X can only sell the grain at half the price that he would have been able to if Y had delivered the grain on time.The loss to X arising out of the breach of contract is classified as:

Accepted Answer

The loss to X is classified as direct loss because it directly results from Y's failure to deliver the grain on time, impacting X's ability to sell the grain at the initially anticipated price.

Question 7

In which of the following circumstances will a court make an order of specific performance?

Accepted Answer

Specific performance is an equitable remedy that orders a party to fulfill their contractual obligations rather than awarding damages. Courts are more likely to grant specific performance in cases where the subject matter of the contract is unique or rare, and damages would not provide an adequate remedy. Therefore, option D is the correct answer. Option A is incorrect because personal services cannot be specifically enforced. Option B is incorrect because specific performance will not be granted where the goods are readily available from another supplier. Option C is incorrect because specific performance will not be granted where damages are an adequate remedy.

Question 8

Which of the following statements is not true concerning an injunction?

Accepted Answer

An injunction does not compel a defendant to actually perform the contract. An order for specific performance may be used for that purpose.

Question 9

Nathanial enters into a contract to purchase a large bottle of organic suntan lotion from Josh's website for his girlfriend Janice.Josh fails to deliver the suntan lotion.Can Janice enforce the contract?

Accepted Answer

Janice cannot enforce the contract because she is not a party to the contract between Nathanial and Josh. Only the parties who entered into the contract can enforce it, and in this case, that would be Nathanial and Josh.

Question 10

When can a person who is not a party to a contract enforce the contract?

Accepted Answer

The principle of privity of contract states that only parties to a contract can enforce its terms. However, an exception exists for third-party beneficiaries, such as in insurance contracts, where the beneficiary (who is not a party to the contract between the insurer and the insured) has the right to enforce the contract.

Question 11

Famke leases her business premises from Jansen under a five-year lease.Three years into the five-year lease, Famke informs Jansen that she does not need the premises any longer and leaves.Jansen leaves the premises vacant for one and a half years, and then advertises for and finds a new tenant, who rents the premises for the same rent as that paid by Famke.Jansen then sues Famke for breach of contract, and seeks damages.Which of the following is most likely?

Accepted Answer

Jansen will be able to recover damages equal to the rent for the period between Famke's departure and how long it should have taken to find a new tenant if he had started looking immediately. This is because Jansen has a duty to mitigate his damages by attempting to find a new tenant as soon as possible. In this case, Jansen waited one and a half years before finding a new tenant, which may not be seen as a reasonable amount of time. Therefore, damages would likely be limited to the period of time between Famke's departure and the time it should have taken Jansen to find a new tenant if he had made reasonable efforts to do so.

Question 12

A plaintiff in an action for breach of contract will be least likely to be awarded damages if the defendant has:

Accepted Answer

If the defendant has performed their contractual obligations, there is no breach of contract and therefore no grounds for the plaintiff to be awarded damages. The other options all involve some sort of breach or deception by the defendant, making it more likely that the plaintiff would be awarded damages.

Quiz 9: Contract Law: Enforcement of the Contract