Question 1

Punitive damages will often be awarded where the conduct of the party in breach is high-handed,malicious,arbitrary,or highly reprehensible.

Accepted Answer

Punitive damages are meant to punish the party in breach for their highly reprehensible conduct. Therefore, they are often awarded where the conduct of the party in breach is high-handed, malicious, arbitrary, or highly reprehensible.

Question 2

The failure of an innocent party to take steps to reduce the loss arising from a breach of contract is of no consequence at all.

Accepted Answer

The innocent party has an obligation to mitigate their loss in the event of a breach of contract. Failure to do so may result in a reduction of damages awarded by a court or tribunal.

Question 3

Where a creditor serves an employer with an order that requires the employer to retain a portion of the debtor's wages each payday,the employer has been served with an execution order.

Accepted Answer

The employer has been served with a garnishment order, not an execution order. A garnishment order is specifically used to withhold a portion of the debtor's earnings to satisfy a debt.

Question 4

A promissor is entitled to enforce a contract when it has performed to the best of its ability even though its performance does not comply in a major way with the requirements of a contract.

Accepted Answer

This statement is not correct. In order to enforce a contract, the promissor must perform in accordance with the requirements of the contract. A major non-compliance may result in breach of contract and may give rise to damages or other remedies.

Question 5

It is contrary to public interest to allow an exemption clause to insulate an offending party for conduct approaching criminal or fraudulent behaviour.

Accepted Answer

Exemption clauses are meant to protect parties in cases of breach of contract, but allowing exemption in cases of criminal or fraudulent conduct would be against public interest.

Question 6

Damages are not available for an anticipatory breach because the time for performance has not arrived.

Accepted Answer

Damages may be available for anticipatory breach, as the non-breaching party may suffer harm or incur expenses as a result of the other party's communication of intent to breach before performance is due. However, the non-breaching party must mitigate their damages and make reasonable efforts to find a substitute transaction to avoid any unnecessary losses.

Question 7

Where a person has a contractual obligation,he or she has to perform the whole obligation before being entitled to enforce the contract.He or she cannot perform part of the obligation and then seek to enforce the contract.

Accepted Answer

The answer of Where a person has a contractual obligation,he...

Question 8

A willful or negligent act by the promissor that destroys its ability to fulfill its contractual promises amounts to a breach of contract.

Accepted Answer

A willful or negligent act by the promissor that destroys its ability to fulfill its contractual promises is a violation of the contract, constituting a breach.

Question 9

Jack's supplier fails to deliver the products Jack has ordered at the required time.Jack is expected to do what he can to reduce his losses.This is called mitigation of losses.

Accepted Answer

Mitigation of losses refers to the actions taken by a party to reduce their losses when faced with a breach of contract or unexpected event. In this case, if Jack's supplier fails to deliver the products on time, he would be expected to take actions such as finding an alternative supplier, rescheduling delivery or negotiating compensation in order to minimize his losses.

Question 10

Specific performance will always be granted to a purchaser of land.

Accepted Answer

Specific performance is a discretionary remedy and is not automatically granted in any situation. A purchaser of land may be refused specific performance if it is not an adequate remedy or if there are other equitable defenses.

Question 11

In an action to enforce a covenant in restraint of trade in an employment contract,the court may grant an injunction.

Accepted Answer

This statement is true. It is common for employment contracts to contain covenants in restraint of trade, which restrict the employee from engaging in certain activities or working for a competitor after leaving the company. If such a covenant is found to be valid and enforceable, a court may grant an injunction to prevent the employee from violating the covenant.

Question 12

If one party breaches a condition of a contract,the other party will generally be entitled to repudiate the contract.

Accepted Answer

If a condition of a contract is breached, it is considered a serious breach that goes to the heart of the contract. The innocent party can choose to either terminate the contract (repudiation) or continue with the contract and seek damages for any losses suffered.

Question 13

The doctrine of substantial performance says that there will be rescission if each party does not substantially perform its obligations under the contract.

Accepted Answer

The doctrine of substantial performance allows for minor deviations from the terms of the contract if the essential purpose of the contract has been fulfilled. It does not necessarily result in rescission unless the breach is material or fundamental.

Question 14

The expression that damages must flow naturally from the breach of a contract has been meant to refer to only those damages that actually flow from the breach.

Accepted Answer

The expression means that damages must be a foreseeable consequence of the breach, not just those that actually occurred. This is based on the principle of foreseeability established in Hadley v Baxendale (1854), which states that damages should be such as may fairly and reasonably be considered either arising naturally from the breach itself or such as may reasonably have been in the contemplation of both parties at the time they made the contract.

Question 15

The remedy of rescission involves suspending the operation of a contract temporarily.

Accepted Answer

Rescission involves the cancellation or termination of a contract, thereby returning the parties to their positions prior to the contract, not merely suspending its operation temporarily.

Question 16

It is fair to say that the damages for breach of contract may well exceed the damages arising in tort.

Accepted Answer

Damages for breach of contract are typically specific to the contract in question and can include losses suffered as a result of the breach, such as loss of profits or additional costs incurred. In contrast, damages for tort are generally focused on compensating the victim for harm suffered, such as personal injury or damage to property. While the damages for tort can be substantial, they may not always exceed the damages for breach of contract, which can be quite significant depending on the terms of the contract and the extent of the breach. Therefore, the statement in the question is generally true.

Question 17

Exemption clauses are generally strictly construed against the party that is not seeking to rely on them.

Accepted Answer

Exemption clauses are generally strictly construed against the party that is seeking to rely on them, as they are trying to limit their liability through these clauses.

Question 18

An injunction is available in a variety of circumstances,including where the contract does not contain a negative covenant.

Accepted Answer

The answer of An injunction is available in a variety...

Question 19

Where an anticipatory breach occurs,the innocent party must carefully consider its election.Explain.

Accepted Answer

The answer of Where an anticipatory breach occurs,the innocent party...

Question 20

Unconscionable terms in a contract can be unfair even if they are agreed to by parties of equal bargaining power.

Accepted Answer

The answer of Unconscionable terms in a contract can be...

Quiz 13: Breach of Contract and Its Remedies