Question 1

Which form of damages is intended to give the victim of the breach of contract the "benefit of the bargain"?

Accepted Answer

In calculating the compensatory remedy,a court will attempt to protect the expectation interest of the injured party by giving him the "benefit of his bargain"-placing him in the position he would have been in had the contract been performed as promised.

Question 2

Winston contracts to sell a plot of land called Blackacre to Paris for $500,000.Winston breaches the contract and Paris sues him.Blackacre's reasonable market value at the time of the breach was $525,000.Paris can recover:

Accepted Answer

The calculation of the loss in value experienced by an injured party differs according to the sort of contract involved and the circumstances of the breach.In contracts involving nonperformance of the sale of real estate,for example,courts normally measure loss in value by the difference between the contract price and the market price of the property.

Question 3

Which form of damages involves a court ordering a party to a contract to perform his/her obligations under the contract?

Accepted Answer

An injunction is a court order requiring a person to do something.In the context of a contract,specific performance is a form of mandatory injunction.

Question 4

Which of the following instances is sufficient reason to cause commercial impracticability?

Accepted Answer

To be successful in claiming excuse based on impracticability,a promisor must be able to establish that the event that makes performance impracticable occurred without his fault and that the contract was made with the basic assumption that this event would not occur.Cost and market fluctuations,and the shortage of goods are assumptions that would automatically be taken into account in commercial transactions.

Question 5

The relinquishment of rights by a party in a contract is called a(n)_____.

Accepted Answer

A party to a contract may voluntarily relinquish any right he has under a contract,including the right to receive return performance.Such a relinquishment of rights is known as a waiver.

Question 6

Maria and Joe entered into a contract for the sale of Maria's car.Delivery of the car and payment were to be made on March 1.Joe clarified that he needed the car so that he can commute between San Francisco and Oakland to his new job that is starting on March 2.Maria broke the contract and failed to deliver the car on March 1.Joe needed a car to commute so he rented a car at $30 per day for 20 days,which was the reasonable amount of time it took him to locate and buy another car.Joe sued Maria for his losses,including the $600 car rental.The $600 makes up the _____ damages.

Accepted Answer

Consequential damages compensate for losses that occur as a consequence of the breach of contract.In this case,Joe is claiming the money he lost as a consequence of Maria's failure to deliver the car on time.

Question 7

The legal remedy of _____ requires the defendant to pay the value of the benefits that the plaintiff has conferred on him.

Accepted Answer

An injured party can take recourse to the remedy of restitution that requires the defendant to pay the value of the benefits that the plaintiff has conferred on him.

Question 8

Adrienne had contracted to convey real estate to Rich.However Adrienne died before the conveyance is completed.What is the status of the parties?

Accepted Answer

The promisor's death or illness does not amount to an excuse of nonperformance of duties in contracts that can be delegated to another,such as the duty to deliver goods,pay money,or convey real estate.

Question 9

Which form of damages can have the effect of reducing the liability of the party guilty of a breach of contract?

Accepted Answer

A party cannot recover for losses that he could have avoided without undue risk,burden,or humiliation.For example,an employer who has wrongfully fired an employee would be liable only for the damages equal to his wages for the remainder of the employment period.It is the employee's duty to make reasonable amends by seeking a job elsewhere.

Question 10

Where the parties to a contract wish to cancel their contract and be in the same position as they were prior to forming the contract,they should seek to obtain a(n)_____.

Accepted Answer

Upon rescission,each party which has been benefited by the other's performance must compensate the other for the value of the benefit conferred.

Question 11

On May 2,1972,Mix,CPA,entered into an oral contract with Dell to provide certain accounting services to Dell.The contract was fully performed by both parties in 1974.On April 25,1988,Dell commenced a breach of contract action against Mix claiming that Mix had improperly performed the accounting services.Mix's best defense to the action would likely be:

Accepted Answer

According to the statute of limitations,a person who has breached a contractual duty is discharged from liability for breach if no lawsuit is brought before the statutory period elapses.In this case there has been unreasonable delay on the part of Dell in bringing a lawsuit against Mix.

Question 12

Damages that are agreed upon at the time the contract is entered into are called _____.

Accepted Answer

The parties to a contract may expressly provide in their contract that a specific sum shall be recoverable if the contract is breached.Such provisions are called liquidated damages provisions.

Question 13

Which of the following circumstances is a valid reason for the delay of a lawsuit once the statutory period is over?

Accepted Answer

The statutory period ordinarily begins to run from the date of the breach.It may be delayed if the party who has the right to sue is under some incapacity at that time (such as minority or insanity)or is beyond the jurisdiction of the state.

Question 14

When is a person's duty to perform discharged on grounds of impossibility?

Accepted Answer

If a statute or governmental regulation enacted after the creation of a contract makes performance of a party's duties illegal,the promisor is excused from performing.This is called the doctrine of supervening illegality.

Question 15

Someone who attempts to recover for breach of contract:

Accepted Answer

In a breach of contract,a person may recover damages only for those losses that he/she can prove with reasonable certainty.

Question 16

Sklar,CPA,purchased from Wiz Corp.two computers.Sklar discovered material defects in the computers 10 months after taking delivery.Three years after discovering the defects,Sklar commenced an action for breach of warranty against Wiz.Wiz has raised the statute of limitations as a defense.The original contract between Wiz and Sklar contained a conspicuous clause providing that the statute of limitations for breach of warranty actions would be limited to 18 months.Under the circumstances,Sklar will:

Accepted Answer

Since the contract explicitly states that the warranty actions would be limited to 18 months,Sklar cannot claim any damages.

Question 17

The equitable remedy of specific performance is most likely to be awarded by a court in which of the following circumstances?

Accepted Answer

The remedy of specific performance is given in cases where the goods involved are unique or goods for which no substitute can be found;such as,heirlooms,works of art etc.

Question 18

Price signed a contract to sell Wyatt a parcel of land for $90,000.The entire sales price was payable at the closing.Price has decided to keep the land.If Wyatt commences an action against Price,what relief is Wyatt most likely to receive?

Accepted Answer

The remedy of specific performance is available in cases for goods considered to be unique;contracts for the sale of real estate are the most common subjects of such decrees because every tract of real estate is presumed to be unique.Since Wyatt has not made any payment for the land,he cannot claim monetary damages.

Question 19

When a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on,both parties can use the remedy of:

Accepted Answer

An accord is an agreement whereby a promisee who has an existing claim agrees with the promisor that he will accept some performance different from that which was originally agreed on.When the promisor performs the accord,it is called a satisfaction.

Question 20

Which of the following characterizes the statute of limitation?

Accepted Answer

The time period for bringing a contract action varies from state to state,and many states prescribe time periods for cases concerning oral contracts that are different from those for cases concerning written ones.

Quiz 18: Performance and Remedies