Question 1

Explain consequential damages.Give an example.

Accepted Answer

The answer of Explain consequential damages.Give an example....

Question 2

Skylar,an antique dealer,intentionally represents the value of an antique chest of drawers as $6,000 when she has reason to know the value is considerably less.Margaret agrees to buy it for $5,500.It is actually worth $2,500.In a state that uses the "benefit-of-the-bargain" rule,Margaret's damage award would be:

Accepted Answer

The "benefit-of-the-bargain" rule means that Margaret is entitled to the difference between the actual value of the chest of drawers ($2,500) and the price she paid for it ($5,500), which is $3,000. But since Skylar intentionally misrepresented the value, Margaret is also entitled to recover the difference between the represented value ($6,000) and the actual value ($2,500), which is an additional $3,500. Therefore, Margaret's total damage award would be $3,500.

Question 3

Bartow signed a contract to coach baseball for Washington High for a period of three years.After two years he is offered and accepts an assistant coach position at State University.Contract law will not allow Washington High to ask for:

Accepted Answer

Specific performance is not available in employment contracts, as it would amount to involuntary servitude. Therefore, Washington High cannot ask for Bartow to continue coaching for them for the remaining year of their contract. However, they may be able to pursue compensatory damages (B), an injunction (C), or liquidated damages (D) if their contract includes provisions for such remedies.

Question 4

A power of avoidance held by a party may be lost if:

Accepted Answer

All of these are potential ways in which a power of avoidance held by a party may be lost. If the contract is affirmed, the party has effectively given up their right to avoid it. Unreasonable delays in exercising the power may also result in loss of the right, as it suggests that the party has waived their right to avoid. And if third party rights have become vested, the party may no longer have the ability to avoid the contract without compensating the affected third parties.

Question 5

Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500.When Carolyn discovers that her cousin wants it too,she breaks the contract with Marianne.Marianne can ask the court to order:

Accepted Answer

Specific performance means that the court orders the breaching party (in this case, Carolyn) to fulfill their contractual obligations. Since the tablecloth is a unique antique item, it may be difficult for Marianne to find a comparable replacement even if she is awarded damages (choice A). Restitution (choice C) involves returning any payments made by Marianne, which does not adequately address the fact that she may not be able to obtain the tablecloth elsewhere. Equitable rescission (choice D) would involve undoing the entire contract, which may not be necessary or desirable for Marianne if she still wants the lace tablecloth. Therefore, specific performance is the best option for Marianne.

Question 6

Howard needs a truck to pull a 2,000-pound trailer.Gordon tells Howard,"My truck will pull a 2,000-pound trailer with ease." Relying on Gordon's statement,Howard buys the truck,but it will not pull a 2,000-pound trailer.If Gordon did not intend to deceive and Howard sues for nonfraudulent misrepresentation,he can recover:

Accepted Answer

Howard can recover out-of-pocket damages (the amount he paid for the truck) and consequential damages (any additional expenses he incurred as a result of relying on Gordon's statement, such as the cost of renting another truck or delaying his plans). However, punitive damages (intended to punish Gordon for intentionally deceiving Howard) would not be appropriate since Gordon did not intend to deceive. Nominal damages (a small symbolic award) also would not be appropriate since Howard had no reason to doubt Gordon's statement and could reasonably rely on it when making the purchase.

Question 7

Which of the following is correct with respect to election of remedies?

Accepted Answer

All of the given statements regarding election of remedies are correct. The Uniform Commercial Code (UCC) rejects the doctrine of election of remedies and provides that its remedies are cumulative. This means that a plaintiff can seek multiple remedies at the same time. For example, a seller who is seeking specific performance of a contract may also seek incidental damages resulting from the breach. Additionally, it is possible to seek both specific performance and restitution as remedies.

Question 8

In which of the following situations is restitution available as a remedy?

Accepted Answer

Restitution is a remedy designed to restore the injured party to the position they were in before the contract was made. It is available in all the situations listed: as an alternative remedy for a party injured by breach (A), for a party in default under certain conditions (B), and for a party who cannot enforce the contract due to the statute of frauds (C).

Question 9

Harry said to Marge,"I have a ring once owned by Marilyn Monroe.Would you like to buy it for $500?" Marge pays for the ring,but the next day a friend tells her that Harry had recently purchased the ring at a local department store.Marge enjoys wearing the ring and wears it constantly for twelve months.Finally,she goes to Harry and says,"Here is the ring you lied about.Give me my $500." Most likely Marge will:

Accepted Answer

Marge will most likely not get her money back because she affirmed the contract by keeping and using the ring for an extended period (twelve months) before attempting to rescind the deal based on Harry's misrepresentation.

Question 10

Restitution is available when:

Accepted Answer

Restitution is a remedy designed to prevent unjust enrichment. In all the given scenarios, restitution could be sought to return the parties to their positions before the unjust act occurred. In scenario A, Vanessa could seek restitution for the partial payment made for a transaction that was not completed due to Elizabeth's refusal. In scenario B, Lawrence could seek restitution for the loss of expected income from the contract terminated by Lee. In scenario C, Cynthia could seek restitution to recover the antique chair or its value due to Gilbert's use of undue influence. Thus, restitution is applicable in all these cases to prevent unjust enrichment.

Question 11

Damages for reliance include expenses for:

Accepted Answer

Damages for reliance are meant to compensate the non-breaching party for expenses they incurred in preparing to perform their obligations under the contract. This can include costs for materials, labor, and other expenses that were necessary but are now wasted due to the breach. Lost profits (A) would fall under damages for expectation, while injury to the person (B) is a separate category of damages. Punishment of the breaching party (D) would fall under the category of punitive damages, which are only awarded in certain circumstances and are not typically included as part of reliance damages.

Question 12

What Article of the UCC governs sales of goods?

Accepted Answer

Article 2 of the UCC specifically governs the sales of goods.

Question 13

Bob's brother,Steve,planned to visit over Labor Day weekend.Together they planned to build a deck in Bob's backyard.Bob ordered the lumber,concrete,nails,and other supplies to be delivered on Friday.He also contracted to rent a saw for the weekend (Sat. ,Sun. ,and Mon. )at a cost of $20 a day.When he went to pick up the saw,the store had rented it to someone else.He drove all over town trying to borrow another,but he could only get one for Sunday,Monday,and Tuesday at a cost of $50 per day.Because they couldn't work on Saturday without a saw,Bob had to hire Mac at a cost of $80 to work with him on Tuesday and,of course,Bob had to take off from work.Calculate the damages to which Bob is entitled from the rental company.Explain.

Accepted Answer

The answer of Bob's brother,Steve,planned to visit over Labor Day...

Question 14

Linnea contracts to buy Harriette's farm for $300,000 and puts $20,000 down.Then Linnea learns she is allergic to hay and repudiates the contract.If Harriette can sell the farm one month later for $290,000,she may:

Accepted Answer

When a buyer repudiates a contract, the seller has the duty to mitigate their damages by attempting to sell the property to another buyer. If the seller is able to sell the property for a lower price than the original contract price, they may keep a portion of the down payment as compensation for their losses. In this case, Harriette may keep $10,000 of the down payment, as she was able to sell the farm for $10,000 less than the contract price.

Question 15

Busby contracts to build a house for Clara.Busby finishes approximately half of the house and quits.Clara files suit against Busby.Which remedy is not available to her?

Accepted Answer

Specific performance is a remedy for breach of contract that requires the breaching party to fulfill their contractual obligations. However, specific performance is not an available remedy in cases involving construction contracts. Therefore, Clara cannot seek specific performance in this case. Compensatory damages, special damages, and incidental damages are all available remedies in this situation.

Question 16

A small damage amount fixed without regard to the amount of loss is known as:

Accepted Answer

Nominal damages refer to a small, token amount of money that is awarded when there has been a breach of contract or civil wrong, but no significant harm or loss has been incurred. It is often used when seeking legal recognition for a wrong that has been committed, but the actual damages are difficult to quantify or prove.

Question 17

David enters into a contract to give Edward the right of first refusal to purchase a tract of land owned by David.David subsequently offers the land to Fred without first offering it to Edward.An appropriate remedy for Edward to seek would be:

Accepted Answer

Since David breached the contract by not offering the land to Edward first, Edward can seek an injunction to prevent David from selling the land to Fred until Edward has had the opportunity to exercise his right of first refusal. Liquidated damages, reformation, and punitive damages would not be appropriate remedies in this situation.

Question 18

In which of the following situations will a court grant specific performance?

Accepted Answer

Specific performance is typically granted in cases involving breach of contract for the sale of real property or rare goods. This is because such items are considered unique and cannot be easily replaced or replicated like other goods or services. In contrast, contracts for personal services are not typically able to be enforced through specific performance as the court cannot force an individual to perform a specific task. Similarly, when goods are mixed with other goods or are not specifically identified to the contract, it can be difficult to determine which goods should be delivered or how to compel delivery, making specific performance less likely to be granted.

Question 19

Contract damages that put the injured party in as good a position as if the other party had performed are:

Accepted Answer

Compensatory damages are intended to compensate the injured party for losses suffered as a result of the breach, and are designed to put the injured party in as good a position as if the other party had performed. Incidental damages are those that arise directly out of the breach and include costs like those incurred in stopping delivery or returning goods. Consequential damages are damages that are not a direct result of the breach but are caused by special circumstances of the injured party. Liquidated damages are damages that are determined and agreed upon in advance by the parties in the contract.

Question 20

Equitable remedies will not be granted where:

Accepted Answer

Equitable remedies such as rescission, specific performance, and injunctions are only granted in cases where the contract is tainted with fraud, duress, undue influence, mistake or unfair practices. If the terms of the contract are fair and certain and the consideration is adequate, there would be no need for an equitable remedy.

Quiz 18: Contract Remedies