Question 1

Rescission is an equitable remedy used when the parties have imperfectly expressed their agreement in writing.

Accepted Answer

Rescission is an equitable remedy that allows a contract to be canceled and the parties to be returned to the positions they were in before the contract was made, typically used in cases of misrepresentation, fraud, undue influence, or mutual mistake, rather than for imperfect expression of the agreement in writing.

Question 2

The failure of one party to perform a contract entitles the other party to rescind it.

Accepted Answer

According to contract law principles, the failure of one party to perform their obligations under a contract constitutes a breach, which can allow the other party to cancel or rescind the agreement. However, the precise conditions and consequences of a breach of contract may vary depending on the terms of the contract, the nature of the breach, and other factors.

Question 3

A party seeking to recover in quasi contract must show that the other party has been unjustly enriched.

Accepted Answer

This is the basic requirement for a quasi contract claim. The party seeking to recover must demonstrate that the other party has received a benefit at their expense and that it would be unjust for that party to retain the benefit without compensating them.

Question 4

A party seeking to recover in quasi contract must show that he or she acted as a volunteer in conferring a benefit on another party.

Accepted Answer

A party seeking to recover in quasi contract does not necessarily have to show that they acted as a volunteer in conferring a benefit on another party. Quasi contract, also known as implied-in-law contract, is a legal theory that allows for the recovery of an unjust enrichment by one party at the expense of another party. It applies when there is no actual contract between the parties, but the circumstances suggest an obligation to pay or compensate for a benefit received. The key element of quasi contract is that the party seeking recovery did not intend to confer the benefit as a gift or donation, but rather had a reasonable expectation of compensation or reimbursement for their efforts or expenses.

Question 5

A contract may include a clause stating that damages will be limited to a maximum amount.

Accepted Answer

This is known as a limitation of liability clause and is a common feature in contracts. It sets a cap on the maximum amount of damages that can be awarded in case of breach or other legal disputes arising from the contract.

Question 6

Sati contracts to work exclusively for Thermal Imaging Company during July for $5,000. On June 30, Thermal Imaging cancels the contract. Sati finds a similar job for the month of July but earns only $3,000. Sati files a suit against Thermal Imaging. As compensatory damages, Sati can recover
A)$3,000.
B)$2,000.
C)$1,000.
D)$0.

Accepted Answer

Sati can recover the difference between the amount she would have earned under the contract with Thermal Imaging ($5,000) and the amount she actually earned ($3,000) with similar job. Therefore, Sati can recover $2,000 as compensatory damages.

Question 7

Global Enterprise Corporation enters into a contract with HealthCare Insurance Company to obtain insurance for Global employees. If HealthCare breaches the contract and Global is awarded compensatory damages, the purpose would be to
A)establish, as a matter of principle, that HealthCare acted wrongfully.
B)provide Global with funds for a foreseeable loss beyond the contract.
C)provide Global with funds for its loss of the bargain.
D)punish HealthCare and deter others from similar acts.

Accepted Answer

The answer of Global Enterprise Corporation enters into a contract...

Question 8

Restitution is limited to rescission cases.

Accepted Answer

Restitution can be ordered in rescission cases, but it can also be ordered in other types of cases, such as cases of unjust enrichment.

Question 9

Nominal damages are awarded for the breach of a contract to nominate someone or something to a higher office, position, or category.

Accepted Answer

Nominal damages are typically awarded when there has been a breach of contract, but the actual damages suffered by the plaintiff are minimal or difficult to quantify. They are often a small symbolic amount, such as one dollar, and are not related to any specific type of breach of contract.

Question 10

Nogales Ceramics pays Omar $15,000 to propose an online marketing campaign. Two days later, Omar tells Nogales that he has accepted a job in Silicon Valley and cannot plan the campaign. As compensatory damages, Nogales can recover
A)$150,000.
B)$15,000.
C)$1,500.
D)$0.

Accepted Answer

Nogales can recover the amount they paid to Omar as compensatory damages, which is $15,000. Additionally, they may have a claim for incidental or consequential damages if they incurred any expenses as a result of Omar's breach of contract. However, the amount of incidental or consequential damages is not provided in the given information.

Question 11

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 the contract, Scrub n’ Dry can
A)do nothing but make a deal with a different service provider.
B)do nothing but temporarily suspend operations and wait.
C)file a criminal complaint against  Ready Repair.

Accepted Answer

The answer of Ready Repair Service enters into a contract...

Question 12

Specific performance will not be granted unless the party's legal remedy is inadequate.

Accepted Answer

This is a well-established principle of contract law. Courts will generally only order specific performance (i.e. require a party to perform its contractual obligations) if monetary damages would not adequately compensate the other party for the breach. If monetary damages would suffice, the court will not grant specific performance.

Question 13

A liquidated damages provision specifies that a certain amount is to be paid on a breach of contract when the nonbreaching party elects to receive cash.

Accepted Answer

The answer of A liquidated damages provision specifies that a...

Question 14

Courts order reformation most often when fraud or mutual mistake is present.

Accepted Answer

Reformation is typically ordered by courts when there is evidence of fraud or mutual mistake in a contract.

Question 15

Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.

Accepted Answer

Restitution is a legal concept that allows one party to recover a benefit that another party has received unjustly, such as through fraud, mistake, or breach of contract. It aims to restore the parties to their pre-contractual positions by requiring the recipient of the benefit to return it or compensate the other party for its value.

Question 16

Ordinarily, the remedy for a seller's breach of a contract for a sale of real estate is specific performance.

Accepted Answer

Specific performance is the usual remedy for a seller's breach of a contract for a sale of real estate. This means that a court order can be issued to force the seller to transfer the property to the buyer as agreed upon in the contract.

Question 17

Rashi contracts to work for Social Data Analysis Corporation during June for $4,500. On May 31, Social Data cancels the contract. Rashi declines a job of a different type and rank with Tech Collection, Inc., which would have paid $3,500. Rashi files a suit against Social Data. As compensatory damages, Rashi can recover
A) ​$4,500.
B) ​$4,000.
C) ​$500.
D) ​$0.

Accepted Answer

The answer of Rashi contracts to work for Social Data...

Question 18

Reformation is an equitable remedy that allows a court to rewrite a contract to suit itself.

Accepted Answer

Reformation is an equitable remedy that allows a court to rewrite a contract to correct mistakes and reflect the true intentions of the parties, not to suit itself.

Question 19

Nominal damages are designed to punish a wrongdoer and set an example to deter similar conduct in the future.

Accepted Answer

Nominal damages are not designed to punish or deter, but rather to acknowledge a legal injury without awarding substantial compensation. They are often awarded in cases where a plaintiff has proven a legal violation, but has not suffered any actual harm or damages.

Question 20

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that is excused by the provision.

Accepted Answer

A limitation-of-liability clause will only be enforced for certain types of breaches, so it is important to consider the specific circumstances and language of the contract before assuming the provision will govern all breaches.

Quiz 15: Breach and Remedies