Question 1

Tile & Grout (T&G) contracts to resurface the insides of the pools at Water World Park. T&G knows that without the resurfacing, Water World will have to delay its seasonal opening. T&G does not perform as promised. As consequential damages, Water World can recover​
A)the cost of new pools.
B)the difference between T&G's price and the eventual cost of resurfacing.
C)the loss of profit from the delayed opening.
D)nothing.

Accepted Answer

As a result of T&G's failure to perform as promised, WaterWorld is entitled to recover consequential damages. The delay in opening the park which leads to the loss of profit is a valid form of consequential damages. WaterWorld cannot recover the cost of new pools, as that would be considered direct damages, and cannot recover the difference between T&G's price and the eventual cost of resurfacing, as that would be too speculative. Thus, option C is the best choice.

Question 2

Copper Conduit, Inc., and Dependable Electric Company sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti-mate but approximately $1,000." This is​
A)a liquidated damages clause.
B)a mitigation-of-damages clause.
C)a waiver-of-breach clause.
D)a penalty clause.

Accepted Answer

This provision is a liquidated damages clause because it sets a predetermined amount for damages in the event of a material breach. Additionally, the amount specified is roughly equivalent to the estimated damages, indicating that it is a reasonable estimation made in good faith.

Question 3

​Isabel orally agrees to buy a unique collection of nineteenth-century cowboy memorabilia for $10,000 from Jessie and sends $2,500 as a down payment. When Isabel pays the rest of the price, Jessie refuses to ship the collection. Isabel should seek
A)damages.
B)restitution.
C)rescission.
D)specific performance.

Accepted Answer

Specific performance would be the best choice for Isabel to seek as the collection of cowboy memorabilia is unique and it may be difficult to find a substitute in the market. Jessie's breach of the oral agreement could be remedied through a court order requiring specific performance, which would force Jessie to fulfill her obligation and complete the sale of the memorabilia to Isabel.

Question 4

​Kali contracts to sell Levon her car for $3,000. This contract will be fully discharged when Kali and Levon
A)agree to sign a bill of sale.
B)exchange the car for the $3,000.
C)sign a receipt.
D)shake hands and go their separate ways.

Accepted Answer

Kali and Levon must exchange the car for the $3,000 to fully discharge the contract.

Question 5

Rikki agrees to sell her Sunrise Breakfast Café to Tia. As part of the deal, Rikki signs a covenant not to open a competing business within a hundred-mile radius for ten years. If this covenant is later determined to be unreasonable, the appropriate remedy is most likely​
A)damages.
B)reformation.
C)rescission.
D)specific performance.

Accepted Answer

If the covenant not to open a competing business is determined to be unreasonable, the appropriate remedy is likely to be reformation. Reformation is a remedy where a court will modify the terms of a contract to make it reasonable and enforceable. This means that the covenant not to compete could be modified to be less restrictive, such as reducing the geographic area or length of time, rather than being completely invalidated. Damages, rescission, and specific performance are not likely to be appropriate remedies in this situation, as they are not designed to address issues related to unreasonable covenants not to compete.

Question 6

A-One Landscapers, Inc., owes Friendly Finance Company $5,000. A-One enters into a contract with Suburban Office Park under which A-One promises to maintain the landscaping on Suburban's property. Under the contract, Suburban promises to pay Friendly Finance the amount that will be due A-One until A-One's debt to Friendly Finance is paid. A-One performs as promised, but Suburban does not pay Friendly Finance. Can Friendly Finance succeed in a suit against Suburban? Why or why not?​

Accepted Answer

The answer of A-One Landscapers, Inc., owes Friendly Finance Company...

Question 7

Ready Repair Service enters into a contract to fix washers and dryers in Scrub n' Dry Company's coin-operated laundries. If Ready Repair breaches by only partially performing the contract, Scrub n' Dry can
A)sue Ready Repair for specific performance.
B)sue Ready Repair for punitive damages.
C)file a criminal complaint against Ready Repair.
D)sue Ready Repair for compensatory and consequential damages.

Accepted Answer

Scrub n' Dry can sue for compensatory and consequential damages to cover the losses directly resulting from the breach and any additional losses caused by the breach. Specific performance is typically not applicable for service contracts, punitive damages are not usually awarded for breach of contract, and a breach of contract is a civil matter, not criminal.

Question 8

Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up Restaurant. If BRI completes most of the work promised in the contract, its performance will be​
A)absolute.
B)complete.
C)material.
D)substantial.

Accepted Answer

Substantial performance means that the contractor has completed most of the work required in the contract, but minor omissions or defects may exist that do not affect the overall functionality of the completed project. This is the most likely scenario based on the information provided in the question.

Question 9

Lunch Trucks, Inc., contracts to deliver and serve Meals Catering Service's products to its clients for $5,000 per event, payable in advance. Meals Catering pays the money, but Lunch Trucks fails to perform. Can Meals Catering rescind the contract? Can Meals Catering also obtain restitution? What does it mean to "rescind" a contract? How is a contract rescinded? What is restitution? How is restitution accomplished? Explain.

Accepted Answer

The answer of Lunch Trucks, Inc., contracts to deliver and...

Question 10

Mother & Daughter Jewelers breaches its lease with Longview Mall and vacates the premises six months before the end of the term. In some states, Longview would have to​
A)avoid reletting the premises to recover damages.
B)use reasonable means to find a new tenant to mitigate damages.
C)relet the premises to recover any damages.
D)sell the premises to recover any damages.

Accepted Answer

In some states, landlords are required to mitigate their damages by using reasonable efforts to find a new tenant to lease the premises after a tenant breaches its lease and vacates early. This means that Longview Mall would need to try to rent out the space again in order to recover any damages caused by Mother & Daughter Jewelers' breach.

Question 11

Rough Hewn Lumber Company orally contracts with Joe for the purchase of five acres of Joe's timberland. Joe makes the transfer but Rough Hewn does not pay the price. The lack of a written contract could bar enforcement of this deal. If so, Joe could most likely recover on a theory of​
A)rescission.
B)restitution.
C)liquidated damages.
D)quasi contract.

Accepted Answer

A quasi contract is a legal fiction that courts use to prevent one party from being unjustly enriched at the expense of another party. In this case, although there was no written contract between Joe and Rough Hewn for the purchase of the timberland, Joe made the transfer in good faith, which created a quasi-contractual relationship between the parties. As a result, Joe could recover the value of the timberland from Rough Hewn under the theory of quasi contract.

Question 12

Ed's Electric substantially performs its contract with Forest Hills Apartments, Inc., to deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to
A)damages.
B)nothing more.
C)be excused from performance.
D)suspend performance.

Accepted Answer

Forest Hills Apartments, Inc. is entitled to nothing more because Ed's Electric has substantially performed its contractual obligations. Substantial performance means that the essential terms of the contract have been met, and thus Forest Hills must fulfill its part of the contract, though they may seek minor adjustments or compensation for any incomplete aspects.

Quiz 10: Contract Performance, Breach, and Remedies

Tile & Grout (T&G) contracts to resurface the insides of the pools at Water World Park. T&G knows that without the resurfacing, Water World will have to delay its seasonal opening. T&G does not perform as promised. As consequential damages, Water World can recover

Copper Conduit, Inc., and Dependable Electric Company sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti-mate but approximately $1,000." This is

Isabel orally agrees to buy a unique collection of nineteenth-century cowboy memorabilia for $10,000 from Jessie and sends $2,500 as a down payment. When Isabel pays the rest of the price, Jessie refuses to ship the collection. Isabel should seek

Kali contracts to sell Levon her car for $3,000. This contract will be fully discharged when Kali and Levon

Rikki agrees to sell her Sunrise Breakfast Café to Tia. As part of the deal, Rikki signs a covenant not to open a competing business within a hundred-mile radius for ten years. If this covenant is later determined to be unreasonable, the appropriate remedy is most likely

Ready Repair Service enters into a contract to fix washers and dryers in Scrub n' Dry Company's coin-operated laundries. If Ready Repair breaches by only partially performing the contract, Scrub n' Dry can

Building Restoration, Inc. (BRI) , enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up Restaurant. If BRI completes most of the work promised in the contract, its performance will be

Mother & Daughter Jewelers breaches its lease with Longview Mall and vacates the premises six months before the end of the term. In some states, Longview would have to

Rough Hewn Lumber Company orally contracts with Joe for the purchase of five acres of Joe's timberland. Joe makes the transfer but Rough Hewn does not pay the price. The lack of a written contract could bar enforcement of this deal. If so, Joe could most likely recover on a theory of

Ed's Electric substantially performs its contract with Forest Hills Apartments, Inc., to deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to

Quiz 10: Contract Performance, Breach, and Remedies

Tile & Grout (T&G) contracts to resurface the insides of the pools at Water World Park. T&G knows that without the resurfacing, Water World will have to delay its seasonal opening. T&G does not perform as promised. As consequential damages, Water World can recover​

Copper Conduit, Inc., and Dependable Electric Company sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti-mate but approximately $1,000." This is​

​Isabel orally agrees to buy a unique collection of nineteenth-century cowboy memorabilia for $10,000 from Jessie and sends $2,500 as a down payment. When Isabel pays the rest of the price, Jessie refuses to ship the collection. Isabel should seek

​Kali contracts to sell Levon her car for $3,000. This contract will be fully discharged when Kali and Levon

Rikki agrees to sell her Sunrise Breakfast Café to Tia. As part of the deal, Rikki signs a covenant not to open a competing business within a hundred-mile radius for ten years. If this covenant is later determined to be unreasonable, the appropriate remedy is most likely​