Question 1

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that the clause excuses.

Accepted Answer

Limitation-of-liability clauses are typically enforceable, but courts will consider the specific circumstances and nature of the breach. For example, if the breach involves intentional misconduct or gross negligence, the clause may not be enforceable.

Question 2

Outbound Travel Agency agrees to hire Petra for one year at a salary of $1,000 per week.When Outbound cancels the contract,Petra spends $2,000 to obtain a similar job that pays $750 per week for a year.Petra is entitled to recover

Accepted Answer

Petra is entitled to recover the amount of wages that she would have earned under the contract, which is $1,000 per week for 52 weeks, or $52,000. However, she also incurred an additional cost of $2,000 to obtain a similar job, which is a direct result of Outbound's breach of contract. Therefore, she is entitled to recover the difference between the wages at the two jobs plus the additional cost, which is ($1,000-$750) x 52 + $2,000 = $14,000.

Question 3

Specific performance is the remedy customarily used when one party has breached a contract for personal services.

Accepted Answer

Specific performance is a remedy typically used when the subject matter of a contract is unique, such as real estate or a rare work of art. It is not typically used for personal services because it is difficult to force someone to provide services against their will. Instead, a court may award damages to the injured party.

Question 4

Even-Flo Hydraulics enters into a contract to repair valves and fittings in Fiesta Company's plant.If Even-Flo breaches the contract,Fiesta can

Accepted Answer

If Even-Flo breaches the contract, Fiesta can sue them for damages as a means of seeking compensation for any financial losses incurred as a result of the breach. This is the most common course of action in a breach of contract situation.

Question 5

Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.

Accepted Answer

Restitution is a legal concept that involves one party recovering or recapturing a benefit that was received by another party through unjust means. It aims to restore the aggrieved party to their pre-benefit state and to prevent unjust enrichment.

Question 6

Reformation allows a court to rewrite a contract to reflect the parties' true intentions.

Accepted Answer

Reformation is a legal remedy that allows a court to rewrite a contract to better reflect the parties' true intentions. This remedy is generally used when there has been a mistake or misrepresentation in the original contract that unfairly prejudices one party. The goal of reformation is to correct the mistake and put both parties back in the position they would have been in if the mistake had not occurred.

Question 7

Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee Stand chain.The next day,Damien tells Clarice that he has accepted a job in San Francisco and cannot design her campaign.She files a suit against Damien.As compensatory damages,she can recover

Accepted Answer

Compensatory damages aim to put the non-breaching party in the same financial position they would have been in had the contract been fulfilled. In this case, Clarice paid Damien $10,000 for the design of an ad campaign, which he did not deliver. Therefore, she can recover the amount paid as compensatory damages, which is $10,000. Option A is incorrect because it is ten times the amount paid, which is not proportional to the damages incurred. Option C is too low and does not reflect the amount of the contract. Option D is incorrect because it assumes no damages were incurred, which is not the case.

Question 8

The duty owed under the mitigation of damages doctrine depends on the situation.

Accepted Answer

The mitigation of damages doctrine requires that the injured party take reasonable steps to minimize their damages after a breach of contract or other harm has occurred. The specific duty owed will depend on the circumstances surrounding the breach or harm.

Question 9

Quasi contracts allow the courts to act as if a contract exists when there is no contract.

Accepted Answer

Quasi contracts, also known as implied-in-law contracts, create legal obligations even in the absence of a formal agreement. The courts may use quasi contracts to prevent unjust enrichment of one party at the expense of another.

Question 10

Normally,when a nonbreaching party has been damaged by a breach of contract,he or she has a duty to mitigate those damages.

Accepted Answer

It is a common principle of contract law that the nonbreaching party must take reasonable steps to mitigate or minimize the damages caused by the breach. Failure to do so may result in the nonbreaching party being unable to recover certain damages or being awarded reduced damages in a lawsuit.

Question 11

Specific performance is the remedy customarily used when one party has breached a contract for a sale of land.

Accepted Answer

Specific performance is commonly used in cases where there has been a breach of contract for the sale of land. This remedy requires the breaching party to fulfill their contractual obligations and complete the sale.

Question 12

A party seeking to recover in quasi contract must show that he or she acted without reasonably expecting to be paid.

Accepted Answer

The answer of A party seeking to recover in quasi...

Question 13

A party seeking to recover in quasi contract must show that he or she has been unjustly enriched.

Accepted Answer

The answer of A party seeking to recover in quasi...

Question 14

Pam contracts to buy a Quotient-brand computer set-up from Regal Systems for $1,000,but Regal fails to deliver.Pam buys the computer elsewhere for $1,500.Pam's measure of damages is

Accepted Answer

Pam's measure of damages would be the difference between the contract price ($1,000) and the price paid for a substitute ($1,500), which is $500. She may also be entitled to incidental damages, such as the cost of arranging for delivery or installation of the substitute. Therefore, option B is correct.

Question 15

To rescind a contract,each party essentially advances to the position he or she would have been in if the contract had been fully executed.

Accepted Answer

The answer of To rescind a contract,each party essentially advances...

Question 16

Hybrid Corporation enters into a contract with Insure Service,Inc.(ISI),to obtain health insurance for Hybrid employees.If ISI breaches the contract and Hybrid is awarded compensatory damages,the purpose would be to

Accepted Answer

The answer of Hybrid Corporation enters into a contract with...

Question 17

A breach of contract may entitle the innocent party to rescind the contract.

Accepted Answer

A breach of contract may give the innocent party the right to rescind or cancel the contract. This means that the parties are released from their obligations under the contract and any damages suffered as a result of the breach may be recoverable.

Question 18

A contract can include a provision stating that no damages can be recovered for certain types of breaches.

Accepted Answer

Yes, this is possible. The parties to a contract can agree to limit or waive certain types of damages for breaches of the contract. This provision is known as a limitation of liability clause.

Question 19

Liquidated damages are damages that are certain in amount.

Accepted Answer

The answer of Liquidated damages are damages that are certain...

Question 20

A contract may include a clause stating that no damages can be recovered for a certain type of breach.

Accepted Answer

It is possible for a contract to include a clause that limits or waives damages for a specific type of breach.

Quiz 12: Breach and Remedies