Question 1

Ralph contracts to sell his Double-R Ranch to Samantha on May 1.On April 20,Ralph tells Samantha that he will not go through with the deal.Samantha can recover

Accepted Answer

The answer of Ralph contracts to sell his Double-R Ranch...

Question 2

Tristan hires Stefani to perform at Tristan's Club,but she breaches the agreement to accept a higher-paying job at Rock Star Arena.Tristan files a suit against Stefani.The court will most likely

Accepted Answer

Stefani breached the agreement by accepting a higher-paying job at another venue. Therefore, Tristan is entitled to damages. The court will likely order Stefani to pay compensation to Tristan for the losses he incurred as a result of her breach of contract. Cancelling or reforming the contract is also possible, but awarding damages is the most likely outcome. Ordering Stefani to perform the contract is not feasible since she has already accepted another job.

Question 3

Rural Power Utility,Inc.,enters into a contract with Shovel Excavation Service to dig up,replace,and rebury Rural's cables in a certain location.Rural advances Shovel 10 percent of its cost.The parties rescind the contract.Shovel's refund of the payment is

Accepted Answer

Restitution is the act of restoring someone to the position they were in before entering into a contract. Since the contract was rescinded, there was no valid contract, and Rural is entitled to receive its advanced payment back. Therefore, Shovel's refund of the payment constitutes restitution. A is incorrect because a penalty would indicate a punishment for breaking a term of the contract, but there was no breach. B is incorrect because liquidated damages imply a predetermined amount of compensation for a future breach of contract, and there was no breach in this scenario. D is incorrect because neither party breached the contract.

Question 4

Vacation Vistas,Inc.,agrees to sell certain acreage to Umiko,who intends to develop a destination resort.Vacation Vistas repudiates the deal.Umiko sues Vacation Vistas and recovers damages.She can now obtain

Accepted Answer

The answer of Vacation Vistas,Inc.,agrees to sell certain acreage to...

Question 5

Drew contracts to sell a house to Evan.The contract provides that if Drew does not close the deal by February 10,he must pay Evan one-half of the contract price.This provision is not enforceable because it is

Accepted Answer

The provision is a penalty clause because it is punishing Drew for not closing the deal on time rather than compensating Evan for any actual damages incurred as a result of the delay. Penalty clauses are generally unenforceable.

Question 6

SFX Paintball Games,Inc.,and Truck & Trailer Delivery Corporation 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 estimate but approximately $1,000." This is

Accepted Answer

This is a liquidated damages clause as it specifies a predetermined amount that will be paid in the event of a breach, which is difficult to estimate but approximately $1,000. It is not a penalty clause as the amount specified is not excessive, and it is not a mitigation of damages clause as it does not attempt to reduce or limit damages in any way. It is not a nominal damages clause as it does specify a specific amount that will be paid in the event of a breach.

Question 7

National Drilling Company ships its only pump to American Hydraulics Corporation,the manufacturer,for repair.National hires Overland Transport,Inc.,to take the pump to American Hydraulics and to return it to National as soon as the repair is complete.National is forced to suspend operations without a pump,but Overland does not know this.National expects to be without the pump for five days and to lose profits of $5,000.When the pump is not returned by the end of the fifth day,National rents a pump at a cost of $100 per day.Overland delays five more days before returning the pump.National files a suit against Overland,asking for compensatory and consequential damages.Will National recover

Accepted Answer

The answer of National Drilling Company ships its only pump...

Question 8

Quicksilver Delivery Service contracts to deliver Pete's Pizza Parlor's products to its customers for $5,000,payable in advance.Pete's pays the money,but Quicksilver fails to perform.Can Pete's rescind the contract Can Pete's 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 Quicksilver Delivery Service contracts to deliver Pete's...

Question 9

Rig Heli-Pads,Inc.,enters into a contract to employ Scott as an on-site project manager for two years.If Rig breaches the contract,Scott has a duty to

Accepted Answer

If Rig breaches the contract, Scott has a duty to mitigate (reduce) the damages that he might otherwise suffer. This means that Scott must take reasonable steps to minimize his losses resulting from Rig’s breach, such as actively seeking other employment opportunities to offset his lost income. Scott cannot simply do nothing and let his damages accumulate. However, he also cannot rescind the contract or sue Rig to deter others, as those options would be beyond his duty to mitigate damages.

Question 10

Lester and Myrtle want to rescind their contract under which Lester sold an MP3 player for $40.To rescind the contract

Accepted Answer

Rescinding a contract means returning the parties to their original positions before the contract was made. In this case, Lester must return the $40 and Myrtle must return the MP3 player in order to fully rescind the contract.

Question 11

Damon contracts to repair the turf on a soccer field for Carousel Sports Park.Damon knows that without the repair,Carousel will have to cancel an upcoming game.Damon does not perform as promised.As consequential damages,Carousel can recover

Accepted Answer

Consequential damages refer to the indirect losses that a party may suffer from the breach of contract. In this case, the cancellation of the upcoming game due to the lack of repaired turf can lead to a loss of profits for Carousel Sports Park. Therefore, Carousel can recover the loss of profit from the canceled game as consequential damages. Options A and B refer to direct damages that are more closely related to the cost of repairing the turf and are not applicable in this scenario. Option D is incorrect as the breached contract has resulted in indirect losses for Carousel.

Quiz 10: Contract Performance,breach,and Remedies