Question 1

Nominal damages are awarded in contract cases in which a damage amount was named in the contract.

Accepted Answer

Nominal damages are a small amount of money awarded to the plaintiff when they have suffered no actual losses or damages, but their legal rights have been violated. They are not awarded based on a specific amount named in the contract.

Question 2

Expectation interest can best be described as money spent in reliance upon the agreement.

Accepted Answer

Expectation interest is best described as the benefit that the injured party would have received had the contract been fully performed, not merely money spent in reliance on the agreement.

Question 3

The Milicic v.Basketball Marketing Company,Inc.case illustrated the proper use of a preliminary injunction.

Accepted Answer

In the Milicic v. Basketball Marketing Company, Inc. case, the court found that a preliminary injunction was appropriate to prevent the defendant from continuing to market the plaintiff's image without his consent. The court considered the factors necessary for a preliminary injunction and concluded that the plaintiff was likely to succeed on the merits of his claims, that the harm he would suffer without an injunction outweighed the potential harm to the defendant, and that the issuance of an injunction would not be contrary to the public interest. Therefore, the case illustrated the proper use of a preliminary injunction.

Question 4

Marvin contracts with House Painters R Us to paint the interior of his house lemon yellow throughout.The total contract price is $7,000.House Painters R Us's anticipated profit on the job is $4500.If Marvin breaches the contract before House Painters R Us has begun work on the job and has not incurred any expenses,then its damages will be $7000.

Accepted Answer

House Painters R Us would be entitled to recover the anticipated profit of $4500, not the full contract price of $7000, since they have not incurred any expenses.

Question 5

Injunctions are frequently used by courts to force employees to complete their contractual obligations with their employers.

Accepted Answer

Injunctions are typically used to prevent actions, such as stopping employees from violating non-compete clauses, rather than to force them to perform their contractual duties.

Question 6

Dr.Gonzalez ordered specialized surgical equipment from Physician's Supply Co.,but his order was not delivered by the agreed date.Gonzalez is under no obligation to minimize damages since the contract was breached by Physician's Supply,not Gonzalez.

Accepted Answer

In contract law, the non-breaching party typically has a duty to mitigate damages, meaning they must take reasonable steps to reduce the losses resulting from the breach.

Question 7

Tess,a tenant,moves from her apartment in breach of the lease agreement.The landlord,Lenny,may not attempt to rent the apartment until the date of the lease expiration,and so has no recourse to minimize damages.

Accepted Answer

The landlord could potentially try to find a new tenant to take over the lease or sublease the apartment, which could minimize damages. However, they may be limited by state or local laws regarding how they may handle the situation.

Question 8

A contract clause which specifies the amount of damages to be paid in the event of a breach is called:

Accepted Answer

A liquidated damages clause specifies a fixed amount of damages that must be paid in the event of a breach of contract. This amount is determined and agreed upon by the parties at the time of contract formation, and is typically reasonable in relation to the potential damages resulting from the breach. This clause eliminates the need to prove actual damages in court, making it easier and quicker for the non-breaching party to recover damages.

Question 9

Mulligan Domestics Co.breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills,although the fabric met the contract specifications.Wellington:

Accepted Answer

The answer of Mulligan Domestics Co.breached a contract by refusing...

Question 10

Specific performance may be available for the breach of a contract to sell:

Accepted Answer

Specific performance is available for unique or one-of-a-kind items, such as an original painting.

Question 11

Liquidated damages are awarded to parties who have experienced an injury to their legal rights but have no actual loss.

Accepted Answer

Liquidated damages are awarded to parties who have experienced an injury to their legal rights and have suffered an actual loss that is difficult to quantify, for which a predetermined amount of damages has been agreed upon in a contract.

Question 12

Damages must be estimated with reasonable certainty.

Accepted Answer

Damages cannot be based on mere speculation or conjecture but must be established with a reasonable degree of certainty. This means that there must be sufficient evidence to support the estimated damages and demonstrate the causal relationship between the alleged harm and the defendant's actions.

Question 13

Most courts hold that a seller of goods is not entitled to consequential damages.

Accepted Answer

Consequential damages are not recoverable in most cases because they are too remote and speculative.

Question 14

Costs to store a vehicle for a short period of time after an auto dealer fails to complete the contract to purchase the vehicle would be:

Accepted Answer

These costs would be considered incidental damages, as they are directly related to the breach of contract by the auto dealer and are a natural consequence of their failure to complete the purchase of the vehicle. Incidental damages are typically recoverable in breach of contract cases as they compensate the injured party for losses incurred as a result of the breach.

Question 15

Carswell,a contractor,enters into a contract with Helen,a homeowner,to remodel her bathroom.The contract provides a specific completion date.The contract provides that if Carswell does not have the job finished by the date,Helen may deduct $200 per day from the contract price until the job is finished.This is an example of liquidated damages.

Accepted Answer

Liquidated damages involve a predetermined amount of damages specified in the contract that will be paid by the breaching party in the event of a breach. In this case, the contract specifies an amount of $200 per day that Helen may deduct if the job is not completed by the specified date.

Question 16

Specific performance is available when the subject matter of the contract is unique.

Accepted Answer

Specific performance is a remedy available when the subject matter of the contract is unique, such as a piece of art or real estate. This remedy involves forcing the breaching party to fulfill their obligations under the contract, rather than simply paying monetary damages.

Question 17

Banner enters into a contract with Sylvia to buy her house for $150,000.Sylvia decides later not to sell because she is so emotionally attached to the house.Banner insists that he is entitled to the house.Banner can successfully sue for specific performance.

Accepted Answer

Specific performance is a legal remedy where the court orders the breaching party to perform their contractual obligations. In this case, Banner can sue Sylvia for specific performance and ask the court to order Sylvia to sell the house to him as agreed upon in the contract.

Question 18

Under the UCC,the buyer is entitled to consequential damages if the seller could have reasonably foreseen them.

Accepted Answer

This is true according to section 2-715 of the UCC, which allows the buyer to recover consequential damages if they were foreseeable at the time of contracting.

Question 19

Ernest operates an ice cream stand during the months of May,June,July,and August.Ernest's ice cream machine is broken and needs a new part to run.He contracts to have the part shipped to him by special carrier.Ernest emphasizes that the part needs to be delivered by April 25 and the carrier agrees,knowing that Ernest intends to open his stand May 1.If the shipper fails to deliver the part on April 25,Ernest will be able to recover consequential damages caused by the delay.

Accepted Answer

Since the carrier was aware of the specific need for the part by April 25 to ensure the ice cream stand could open on time, and agreed to this timeline, Ernest can recover consequential damages for the delay, as it directly affects his business operations starting May 1.

Question 20

The concept that an injured party may recover consequential damages only if the breaching party should have foreseen them was established in:

Accepted Answer

The principle that consequential damages can only be awarded if they were foreseeable by the breaching party was established in the case of Hadley v. Baxendale. In this case, the defendant courier company failed to deliver a broken engine part on time, which resulted in a loss of profits for the plaintiff. The court held that the damages could only be recovered if they were foreseeable as a likely result of the breach. This is known as the "Hadley rule" and has been applied in many subsequent cases, including Bi-Economy Market, Inc. v. Harleysville Ins. Co. of New York and Putnam Construction & Realty Co. v. Byrd. However, neither of these cases established this principle. Toscano v. Greene Music is not a relevant case for this concept.

Quiz 18: Remedies