Question 1

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 2

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 answer of If a contractor has agreed to build...

Question 3

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

The statement is false. An injunction typically involves an order to refrain from some offensive conduct, while specific performance involves an order to perform the contract.

Question 4

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

This is a legal principle known as the duty to mitigate damages, which applies in many types of cases, including breach of contract and personal injury. It means that the victim of a breach or injury cannot simply sit back and let damages accumulate; they must take reasonable steps to minimize the harm suffered. Failure to do so could potentially reduce the amount of compensation they may be entitled to receive.

Question 5

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 6

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

Accepted Answer

This statement is true. An acceleration clause is a provision in a loan agreement that allows the lender to declare the entire outstanding debt due and payable immediately if the borrower fails to make a scheduled payment. This means that if a borrower misses an installment payment, the lender can demand full repayment of the loan, along with any outstanding interest and fees.

Question 7

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

Accepted Answer

While the breaching party may be held liable for damages resulting from a breach of contract, lost profits are only recoverable if they were foreseeable at the time the contract was formed and can be proven with reasonable certainty. Therefore, the breaching party is not automatically responsible for all lost profits.

Question 8

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 9

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 10

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 11

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

Accepted Answer

An injunction is a court order that requires someone to stop doing a certain action or behavior. While it can be used in cases where a contract has been breached, its main purpose is to prevent harm or further harm from occurring, rather than punishing the individual who breached the contract.

Question 12

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 13

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 14

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

The sentence states that courts are reluctant to grant compensation for partial performance unless the obligations have been substantially performed.

Question 15

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

A mandatory injunction can be issued by the courts when someone violates a contractual term and the violation leads to a continuing problem. This type of injunction requires the person to take specific actions to rectify the situation, rather than simply stopping the behavior that caused the problem.

Question 16

Injunction is an example of an equitable remedy.

Accepted Answer

Injunction is a type of equitable remedy that can be granted by a court to prevent harm or injustice. Other examples of equitable remedies include specific performance, rescission, and reformation.

Question 17

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

Accepted Answer

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

Question 18

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

Accepted Answer

This is known as the principle of mitigation of damages. The victim has a duty to mitigate their damages and take reasonable steps to minimize the harm caused by the breach. If they fail to do so, they may not be able to recover damages for losses that could have been avoided.

Question 19

Damages are an example of an equitable remedy.

Accepted Answer

Damages are considered a legal remedy, as opposed to an equitable remedy. Equitable remedies include things like injunctions, specific performance, and rescission.

Question 20

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...

Quiz 9: The End of the Contractual Relationship