Question 1

The duty to mitigate damages:

Accepted Answer

The duty to mitigate damages requires the non-breaching party to take steps to minimize the damage.Plaintiffs who have been injured by a breach of contract have a duty to mitigate (avoid or minimize)the damages they suffer if they can do so without undue risk,expense,or humiliation.They are not able to recover damages for injuries they could easily have avoided.

Question 2

An award for loss in value of a promised performance is:

Accepted Answer

An award for loss in value of a promised performance is compensatory.A party suing for breach of contract who has suffered actual losses as a result of the breach is entitled to recover compensatory damages.These damages are designed to place the plaintiff in the same position as if the contract had been performed.They are the difference between the value of performance that the plaintiff actually received and the value of the performance he or she had the right to expect.

Question 3

In which of the following situation a party's duty to perform cannot be discharged?

Accepted Answer

Situation in which a party's duty to perform cannot be discharged is nonoccurrence of a condition subsequent.Some situations in which a party's duty to perform could be discharged: the occurrence of a condition subsequent,the nonoccurrence of a condition precedent,material or anticipatory breach by the other party,and excused nonperformance.

Question 4

The time limit set by the UCC statute of limitations for contracts involving the sale of goods is:

Accepted Answer

The UCC statute of limitations for contracts involving the sale of goods is four years from the time the goods are tendered.The statutory period ordinarily begins to run from the date of the breach,but it may be delayed if the party with the right to sue is incapacitated (e.g.,insane).

Question 5

The word "Mitigate" denotes:

Accepted Answer

The word "Mitigate" denotes a legal term which means to reduce,avoid,or minimize.Plaintiffs who have been injured by a breach of contract have a duty to mitigate (avoid or minimize)the damages they suffer if they can do so without undue risk,expense,or humiliation.They are not able to recover damages for injuries they could easily have avoided.

Question 6

A liquidated damages provision will be enforced only when:

Accepted Answer

The parties to a contract may provide in advance that a specific sum shall be recoverable if the contract is breached.Such provisions are called liquidated damage provisions.If the amount specified is reasonable and if the nature of the contract is such that actual damages would be difficult to determine,liquidated damage provisions are enforced.

Question 7

Farmer Logan had agreed to supply maize to Roxy Inc.There was a terrible winter in his state which destroyed his crop and later he fell sick and ultimately died.Farmer Logan can be excused for nonperformance on grounds of:

Accepted Answer

In the above case,illness or death of the promisor terminates the contract.Personal service contracts are the only contracts that the promisor's death terminates.If it becomes impossible for a promisor to perform his or her contractual duties,the duty to perform is discharged and the promisor is not liable for material breach.Impossibility in the legal sense of the word,however,means "it cannot be done," not "I cannot do it."

Question 8

Adam contracts to sell Ben 100 widgets for $100 for use in Ben's factory.Adam does not know that Ben's factory is closed as it is waiting for supply of widgets from Adam.Will Adam be liable for the damages caused due to late delivery?

Accepted Answer

In the above case,Adam will not be liable for any damages caused due to late delivery to Ben's factory.These consequential damages are not recoverable unless the defendant had reason to foresee them at the time the contract was created.Generally,this means that the defendant must have known of the special circumstances that caused the loss.

Question 9

Which of the following statements is not true about discharge by alteration?

Accepted Answer

If the parties' agreement is represented by a written instrument,a material,intentional alteration of the instrument by one of the parties discharges the other party.If a party consents to an alteration or does not object to it after learning of it,he or she is not discharged.Alterations by third parties without the knowledge or consent of either contracting party do not affect the parties' rights.

Question 10

Kids Corner ordered for a supply of stuffed toys looking like Santa Claus from Toyland Inc.The toys were to be supplied by 1^st of December but were sent to Kids Corner on 25^th of December.There has been a _____ of contract.

Accepted Answer

The promisor is guilty of material breach of contract if his or her performance fails to reach the degree of perfection the other party is justified in expecting under the circumstances.In contracts in which failure to perform on time is a material breach,it is said that time is of the essence.Clearly time is of the essence in the above contract.

Question 11

Ronny hires a car from Greens Transport with global positioning system (GPS)for his holiday in Las Vegas.The rent for the car was $175 a day and was hired for 7 days.The contract did not state anything regarding speed.At times Ronny drove at a high speed of which the GPS kept a record and Greens imposed damages worth $4000 for the wear and tear caused due to high speed.What kind of damage is this?

Accepted Answer

In the above case,the fee for damages imposed for unreasonably high compared to the possible wear and tear caused due to the high speed.Hence,it is a Penalty.The prime purpose of a penalty under a contract is to prevent a breach of the contract by holding over the head of a contracting party the threat of punishment for a breach.A provision for liquidated damages,on the other hand,is designed to fix fair compensation to the injured party to the contract when it is breached.

Question 12

Consequential damages:

Accepted Answer

Consequential damages occur when the special circumstances of the plaintiff cause him to suffer losses that would not ordinarily be foreseeable as a result of breach.Normally,such consequential damages are not recoverable unless the defendant had reason to foresee them at the time the contract was created.Generally,this means that the defendant must have known of the special circumstances that caused the loss.

Question 13

Roy was doing repair work in the apartment of Melinda.He saw a deep crack in the floor but did not repair it at the time.Later while doing ceiling work,his ladder got stuck in the crack and he injured himself.Can he recover damages from Melinda?

Accepted Answer

In the above case,Roy cannot recover for injuries that could be easily avoided.Plaintiffs who have been injured by a breach of contract have a duty to mitigate (avoid or minimize)the damages they suffer if they can do so without undue risk,expense,or humiliation.

Question 14

"Frustration of venture":

Accepted Answer

"Frustration of venture" is the same as "commercial frustration." When events occur after the formation of the contract that would make the return performance of the other party worthless to the promisor,a party's duty to perform can be discharged.This is called commercial frustration or frustration of venture.

Question 15

Which of the following statements is true?

Accepted Answer

Personal service contracts are the only contracts that the promisor's death terminates.Illness may also excuse the promisor's failure to perform if the nature of the required performance and the seriousness and duration of the illness make it impossible for the promisor to substantially perform.

Question 16

Punitive damages:

Accepted Answer

Punitive damages are usually unavailable.They are sometimes awarded for bad faith breach.Ordinarily,punitive damages are not recoverable for breach of contract.They are recoverable only when extreme circumstances justify penalizing the defendant,such as if the breach of contract is willful,wanton,or malicious.These punitive damages are not ordinarily available in contract cases.

Question 17

Which of the following is true about building and construction contracts?

Accepted Answer

Building and construction contracts commonly require the builder to give the owner a certificate issued by a specific engineer or architect before the owner has a duty to pay the builder.These certificates,which are often issued at each stage of completion,indicate that the work is done to the satisfaction of the architect or engineer.

Question 18

is:

Accepted Answer

Nominal damages are very small damages that the court may award the plaintiff when a technical breach of contract has occurred without causing any actual loss.Typically,they are no more than $1.

Question 19

Rebecca contracted Matthew Properties to repair her apartment for $20,000.Matthew Properties repaired the apartment and handed it over to her.She saw that the garages and the attic had not been properly worked upon.She filed a suit against them but the court said that Matthew Properties had been discharged from obligations by a(n):

Accepted Answer

In the above case,the court said that Matthew properties had been discharged from obligations by a waiver.A party to a contract may waivehis or her right to insist on complete performance.Waiver occurs when a party accepts incomplete performance without objection,knowing that the defects in performance will not be remedied.

Question 20

In which of the following situations can a party's duty to perform be discharged?

Accepted Answer

When events occur after the formation of the contract that would make the return performance of the other party worthless to the promisor,a party's duty to perform can be discharged.This is called commercial frustration.In commercial frustration,like impracticability,the event must not have been foreseeable,and the promisor must not have expressly or impliedly assumed the risk that the event would occur.

Quiz 18: Performance and Remedies