Question 1

River Vista Inc.enters into a contract with Stable Realty Management to manage and maintain River Vista's commercial real estate.Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach.This is

Accepted Answer

This is a limitation-of-liability clause because it limits the ability of either party to recover damages in the event of a non-fraudulent or unintentional breach.

Question 2

Rural Power 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.The parties rescind the contract.Shovel's refund of the payment is

Accepted Answer

Restitution is the return of money or property to the party from whom it was taken. Since the parties are rescinding the contract, Shovel Excavation Service must return the payment that was advanced to them by Rural Power Utility, Inc. It is not a penalty, liquidated damages or a breach of contract as the parties are mutually rescinding the contract.

Question 3

Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Janet and sends her $250 as a down payment.When Ira sends her the rest of the price,Janet refuses to ship Ira the collection.Ira should seek

Accepted Answer

The best choice for Ira is to seek specific performance of the oral contract. This is because the sports memorabilia is a unique collection that may be difficult or impossible to find elsewhere. Damages would provide monetary compensation but would not give Ira the collection he agreed to purchase. Reformation is not appropriate as there is no indication that the contract was not properly formed. Rescission would cancel the contract and give Ira his down payment back, but again it would not give him the collection he wanted. Thus, specific performance is the best option for Ira.

Question 4

Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery.If Ambrose breaches the contract,Belle Vista's remedy would most likely be

Accepted Answer

The most likely remedy for Belle Vista Farms if Ambrose breaches the contract is specific performance, which means that the court would order Ambrose to fulfill his end of the bargain and purchase the land as agreed. This is because land is considered a unique asset, and money damages may not adequately compensate Belle Vista Farms for the loss of the opportunity to sell the land to someone else. Choices A, B, and C are not the best options as they do not fully address the harm suffered by Belle Vista Farms due to Ambrose's breach.

Question 5

Resourced Minerals Inc.agrees to deliver ten tons of coal to Static Energy Corporation.The agreement states that delivery is to be within "9" days,although the parties intend "90" days.Resourced Minerals cannot convince Static Energy to amend the contract.Resourced Minerals should seek

Accepted Answer

Rescission is not appropriate since there is no indication of fraud, mistake, or impossibility. Damages may be a remedy, but reformation is the best choice since it allows the parties to correct the mistake in the writing of the contract and to give effect to their true intentions. Specific performance is not appropriate since it is only available for unique or rare goods or services, and coal is not considered a unique commodity.

Question 6

Damon contracts to repair the turf on a soccer field for Carousel Sports Park.Damon knows that without the repair,Carousel will have to cancel an upcoming game.Damon does not perform as promised.As consequential damages,Carousel can recover

Accepted Answer

Carousel Sports Park can recover the loss of profit from the canceled game as consequential damages because it was a foreseeable consequence of Damon's failure to repair the turf as promised. Option A is not applicable as it would amount to giving Carousel a windfall. Option B is also not applicable as it only allows Carousel to recover the difference in price and not the loss of profit from the canceled game. Option D is not applicable as Damon's breach has caused actual damages to Carousel.

Question 7

SFX Paintball Games,Inc.,and Truck & Trailer Delivery Corporation 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

Accepted Answer

This is a liquidated damages clause as it establishes a predetermined amount of damages in the event of a material breach that would otherwise be difficult to estimate.

Question 8

Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500,but Elliot does not show up as agreed.Dry Gulch hires Fernando to do the job for $2,000.Dry Gulch may recover from Elliot

Accepted Answer

The answer of Dry Gulch Farms hires Elliot to repair...

Question 9

Lucy contracts to buy six cases of vintage wine from Mountainside Vineyards for $1,200.The contract states that delivery is to be made at Lucy's residence "on or before June 1,to be used for niece's wedding reception on June 2." On June 1,Mountainside's delivery vehicle is involved in an accident,and no wine is delivered to Lucy.On the morning of June 2,Lucy buys the wine from Nature's Vintner.That afternoon,just before the reception,Mountainside tenders delivery of the wine at Lucy's residence.Lucy refuses tender.Mountainside sues Lucy for breach of contract.How is the court most likely to rule?

Accepted Answer

The answer of Lucy contracts to buy six cases of...

Question 10

Lunch Trucks,Inc.,contracts to deliver and serve Meals Catering Service's products to its clients for $5,000 per event,payable in advance.Meals Catering pays the money,but Lunch Trucks fails to perform.Can Meals Catering rescind the contract? Can Meals Catering also ob-tain restitution? What does it mean to "rescind" a contract? How is a contract rescinded? What is restitution? How is restitution accom-plished? Explain.

Accepted Answer

The answer of Lunch Trucks,Inc.,contracts to deliver and serve Meals...

Question 11

Rikki agrees to sell her Sunrise Breakfast Café to Tia.As part of the deal,Rikki signs a covenant not to open a competing business within a hundred-mile radius for ten years.If this covenant is later determined to be unreasonable,the appropriate remedy is most likely

Accepted Answer

If the covenant not to compete is determined to be unreasonable, the appropriate remedy would be reformation, which means the court could modify or rewrite the covenant to make it reasonable rather than completely voiding it. Damages, rescission, and specific performance are not appropriate remedies in this situation.

Question 12

Builders,Inc.,agrees to construct an office building for Champion Hotels.The project proceeds according to plan,but before it is done,Champion tells Builders to quit.Builders may recover

Accepted Answer

Builders can recover the profits they would have made from completing the contract plus any costs they have already incurred up to the point of breach. This is because Champion Hotels breached the contract by telling Builders to quit before completion.

Quiz 13: Contract Performance, breach, and Remedies Voluntary Consent