Question 1

Solomon breaches his contract with Neal to purchase the 500 pairs of socks he had promised to buy. Neal is able to sell the 500 pairs to Renny for a much lower amount. Neal then sues Solomon for damages. Neal will be able to recover

Accepted Answer

Neal will be able to recover the difference between Solomon's contract price and the amount paid by Renny because he was able to sell the 500 pairs to someone else for a lower amount. This is the actual loss suffered by Neal as a result of Solomon's breach of contract. The amount in the liquidated damages clause cannot be recovered because it is a predetermined amount agreed upon by the parties in case of breach. Solomon's contract price cannot be recovered as it was not the actual loss suffered by Neal. The intention behind Solomon's breach is not relevant in this case.

Question 2

Farmer Elvin is holding 200 pounds of potatoes in storage for Chef Noble but Chef Noble has breached the contract by failing to pay for the potatoes. If Farmer Elvin sells the potatoes to a local diner to make potato soup and salad, then this action would be considered a(n)

Accepted Answer

Selling the potatoes to a local diner to make potato soup and salad is a reasonable mitigation of damages as it is an attempt by Farmer Elvin to minimize his losses by finding an alternative buyer for the potatoes.

Question 3

Bob, a house builder, contracts with Ollie to build a house on Ollie's lot. The total price of the construction is $100,000, $20,000 of which will be Bob's profit. After Bob has put $10,000 worth of materials into the house, Ollie wrongfully refuses to let him finish the house. If Bob sues for damages, he will be able to collect

Accepted Answer

Bob is entitled to collect the amount of damages that will put him in the same position as if the contract had been performed. In this case, Bob has already put $10,000 worth of materials into the house and would have made a $20,000 profit if the contract had been performed. Therefore, his total damages are $30,000.

Question 4

Ralph is a professional football player. He signs a valid contract with the Jets. Later, the Giants offer him more money, so he signs a contract with them. If the Jets sue Ralph, what would the most likely result be?

Accepted Answer

If Ralph signed a valid contract with the Jets, he is bound by that contract and cannot sign with another team without breaching the contract. The Jets can sue Ralph for breach of contract and seek a preliminary injunction to prevent him from playing with any team other than the Jets while the lawsuit is ongoing. The court is unlikely to order Ralph to play with the Jets or award him damages for the Giants contract, as this would effectively reward him for breaching his contract with the Jets.

Question 5

Larry purchased a Leisure Lawnmower because the company salesperson intentionally misled him by assuring him that the mower was self-propelled, had a mulching feature, and had a five-year unlimited manufacturer's warranty. When Larry finds out that his new Leisure Lawnmower is not self-propelled, does not mulch, and has a 90-day warranty, he may successfully sue for

Accepted Answer

Larry can sue for restitution to recover the amount he paid for the lawnmower, and punitive damages for the intentional misrepresentation by the salesperson. Compensatory damages may also be awarded to compensate for any additional costs incurred due to the misrepresentation. Reformation of the contract would not be a suitable remedy in this case since the contract was not missing any terms that needed to be corrected, but rather the salesperson lied about the product features and warranty.

Question 6

Tina and Leroy have a contract for the sale of a vinyl record album. Tina, the seller, breaches the contract. A court will be most likely to order specific performance if there are __________ identical copies of the record album available for sale on the market.

Accepted Answer

Specific performance is a remedy where the court orders the breaching party to perform the contractual obligation as agreed. This remedy is typically only available for unique or rare items, such as a one-of-a-kind painting or a rare collector's item. In this case, the vinyl record album is not necessarily unique or rare, as there are at least two identical copies available for sale on the market. Therefore, it is unlikely that a court would order specific performance and would instead award monetary damages to the non-breaching party.

Question 7

All Seasons, Inc. ordered $5,000 worth of Christmas decorations from Santa, Inc. The shipment of decorations was to arrive no later than October 1, but did not arrive until December 1. All Seasons was able to purchase some of the unfulfilled order through other suppliers, but had to pay 15% more than the price under contract with Santa, Inc. As a result of the delay, All Seasons' sales were down 25%. All Seasons can recover

Accepted Answer

All Seasons can recover compensatory damages for the increased cost of purchasing from other suppliers, as well as consequential damages for their decrease in sales. However, punitive damages would not be applicable in this case as there is no evidence of intentional or reckless behavior on the part of Santa, Inc. Nominal damages also would not be applicable as All Seasons incurred actual losses as a result of the breach of contract.

Question 8

The remedy of reformation

Accepted Answer

The remedy of reformation can be used to correct mistakes in the original contract, such as typographical or scrivener's errors. It is not limited to cases where money damages are inadequate or fraud is involved. However, it is not as commonly used as other remedies such as damages or specific performance.

Question 9

Reformation is

Accepted Answer

Reformation is a relatively rare remedy that is only available in cases where there is clear evidence of mistake or fraud in the creation of a contract. It involves re-writing the contract to reflect the true intentions of the parties involved. Therefore, it is the least common of all remedies.

Question 10

The goal of expectation interest is to

Accepted Answer

Expectation interest is a principle of contract law that seeks to place the non-breaching party in the position it would have been in if the contract had been fully performed. In other words, the goal is to compensate the non-breaching party for any losses they suffered as a result of the breach, by putting them in the position they would have been in if the contract hadn't been breached. Choice D accurately describes this goal.

Question 11

Specific performance is always available in

Accepted Answer

Specific performance is most commonly available in real estate contracts, as the unique nature of the property makes monetary damages insufficient. It is not available in all contracts involving farm goods or vehicles, and is rarely available in employment contracts.

Question 12

Which of the following is an example of incidental damages you might be awarded if you are wrongfully terminated from your job?

Accepted Answer

Incidental damages related to wrongful termination from a job include reasonable expenses incurred while searching for a new position, such as the costs of mailing resumes to prospective employers.

Question 13

​Which of the following statements concerning liquidated damages is NOT TRUE?

Accepted Answer

This statement is not true because if the amount of liquidated damages is considered to be a penalty on the breaching party, it will not be enforceable. Liquidated damages must be a reasonable estimation of actual harm, not a punitive measure.

Question 14

To "undo" a contract and put the parties where they were before they made the agreement is called

Accepted Answer

Rescission is the act of canceling or undoing a contract, putting the parties back to their pre-contract positions. Restitution refers to the actual return of any money or property exchanged under the contract. Reliance refers to the act of relying on the other party's performance of the contract, while remediation refers to the act of providing a remedy or compensation for any breached contract terms.

Question 15

To make a good faith purchase of goods similar to those in a contract is to

Accepted Answer

Making a good faith purchase of goods similar to those in a contract is known as covering. This is a way to mitigate damages and fulfill the terms of the contract after the other party has breached it. Rescinding means canceling the contract altogether, while breaching means failing to fulfill the terms of the contract.

Question 16

In breach of the partnership agreement, Trimble, a partner in the partnership of Morris, Newt, and Oppie, Ltd. quits the partnership and goes to work for a competitor. The former partners may ask the court for

Accepted Answer

In this situation, the former partners may ask the court for an injunction to prevent Trimble from working in competition with them. This is because Trimble's actions are in breach of the partnership agreement and in violation of his duty of loyalty to the partnership. Specific performance would not be an appropriate remedy as it would be difficult to force Trimble to return to the partnership. Special or liquidated damages may be available, but an injunction would be the most effective way to prevent further harm to the partnership.

Question 17

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the two cannot settle this dispute, and Archie still wants to deliver the champagne, then Archie should sue for the remedy of

Accepted Answer

Reformation is the appropriate remedy in this situation. Reformation allows the court to modify the terms of a contract to reflect the true intentions of the parties. In this case, the parties clearly intended for the delivery to take place in 50 days, but the written agreement incorrectly stated 5 days. Reformation will allow the court to correct the mistake in the agreement to reflect the true intentions of the parties.

Question 18

If a court awards nominal damages, it will generally

Accepted Answer

Nominal damages are symbolic damages awarded to a plaintiff when no actual harm or financial loss has been suffered. The purpose of nominal damages is not to compensate the plaintiff, but to acknowledge that their rights have been violated. Therefore, the court will typically only award a very small amount of money, often just $1 or $2, and will not award compensatory or punitive damages. Option A is incorrect because compensatory damages are awarded when the plaintiff has suffered actual harm or loss, whereas nominal damages are awarded when there has been a technical violation of the plaintiff's rights. Option B is incorrect because a court must first determine that there has been a breach of contract before it can award nominal damages. Option C is incorrect because punitive damages are awarded to punish a defendant for intentional or reckless conduct that caused harm, and nominal damages do not involve harm or intentional wrongdoing.

Question 19

Which type of interest is designed to return to the injured party a benefit that he or she has conferred on the other party, which would be unjust to leave with that person?

Accepted Answer

The type of interest described in the question is the restitution interest, which aims to restore the benefit that one party has given to the other that would be unjust for the latter to keep. Reliance interest relates to expenses incurred by the injured party based on a promise, and the expectation interest is designed to put the injured party in the same position they would have been in had the breaching party fulfilled their contractual obligations.

Question 20

In a promissory estoppel case, a court will generally award

Accepted Answer

In a promissory estoppel case, a court will generally award only reliance damages. This means that the plaintiff can recover the expenses incurred in reliance on the defendant's promise, but not necessarily the full amount of what was promised. The purpose of reliance damages is to compensate the plaintiff for the expenses they would not have incurred if the defendant had not made the promise. Specific performance is generally not awarded in promissory estoppel cases because it requires the defendant to perform the promise, which may not be feasible or practical. Punitive damages are also generally not awarded in promissory estoppel cases because the defendant did not act with intentional or malicious conduct. Nominal damages are a small amount of money awarded to a plaintiff to signify that their rights were violated, but are not applicable in a promissory estoppel case where actual damages were incurred.

Quiz 19: Remedies