Question 1

In a contract for a sale of goods,the usual measure of compensatory dam?ages is the difference between the contract price and the market price.

Accepted Answer

This statement is true. Compensatory damages in a contract for the sale of goods are typically calculated as the difference between the contract price and the market price of the goods at the time of delivery. This is intended to put the non-breaching party in the same position they would have been in had the contract been performed as promised.

Question 2

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

Accepted Answer

Substantial performance means that the party has completed most of the work promised in the contract, and any incomplete work does not materially affect the purpose of the contract. Therefore, if BRI completes most of the work promised in the contract, its performance will be considered substantial.

Question 3

Quasi contracts allow the courts to act as if a contract exists when there is no contract.

Accepted Answer

Quasi contracts, also known as implied-in-law contracts or constructive contracts, allow the courts to impose contractual obligations on parties in the absence of an actual contract. This is done to prevent unjust enrichment or to remedy a situation where one party has received a benefit at the expense of another party.

Question 4

Lon enters into a contract to mine limestone in Mica's quarry,sell it,and share the profits on its sale with Mica.If the duties under this contract are discharged like those under most contracts,the duties will be

Accepted Answer

The duties under the contract between Lon and Mica involve mining limestone, selling it, and sharing profits. These duties are expected to be performed by both parties. The contract does not have any specific condition attached to it, nor does it allow for rescission or termination unless there is a breach of obligations. Therefore, the best choice is option C-performed.

Question 5

A liquidated damages provision is the same thing as a penalty provision.

Accepted Answer

A liquidated damages provision is a specific type of damages provision in a contract that sets a predetermined amount of compensation that one party will pay to the other in the event of a breach of contract. The purpose of a liquidated damages provision is to provide certainty and predictability for both parties in the event of a breach. A penalty provision, on the other hand, is a clause that imposes a punitive consequence for breaching a contract, generally meant to discourage the party from breaching in the first place. Penalty provisions are often unenforceable as they are viewed as a penalty rather than a true measure of damages.

Question 6

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

Accepted Answer

This statement is true. A remedy is a form of relief provided to an innocent party when the other party involved in the contract breaches or violates one or more terms of the contract.

Question 7

Good Food Groceries,Inc.enters into a contract to sell Sarah's Corner Shop a truckload of eggs from free range chickens.Good Food Groceries then fails to deliver the eggs to Sarah's Corner Shop.Sarah

Accepted Answer

Good Food Groceries breached the contract by failing to deliver the eggs, so Sarah's Corner Shop is not obligated to pay for the eggs. This is known as the principle of the "perfect tender rule," which states that if goods fail to conform exactly to the contract, the buyer may reject the goods. Therefore, Sarah's Corner Shop has the right to refuse payment and seek damages for the breach of contract.

Question 8

A party seeking to recover in quasi contract must show that he or she has been unjustly enriched.

Accepted Answer

The answer of A party seeking to recover in quasi...

Question 9

Normally,when a nonbreaching party has been damaged by a breach of contract,he or she does NOT have a duty to mitigate those damages.

Accepted Answer

The nonbreaching party does have a duty to mitigate their damages in order to minimize the harm caused by the breach. Failure to mitigate can reduce the amount of damages that can be recovered.

Question 10

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

Accepted Answer

Restitution is the act of restoring or returning something that has been taken away or lost. In legal terms, it refers to the process by which one party recovers a benefit or money that has been obtained unjustly by another party. This can include situations where someone has obtained property or money through fraud, theft, or other illegal means. The goal of restitution is to restore the injured party to their original position by forcing the wrongdoer to give back what they have taken or compensate the victim for their loss.

Question 11

Compensatory damages compensate the injured party for injuries sustained due to loss of the contract and also punish the party that breached the contract.

Accepted Answer

The answer of Compensatory damages compensate the injured party for...

Question 12

To rescind a contract,each party essentially advances to the position he or she would have been in if the contract had been fully executed.

Accepted Answer

The answer of To rescind a contract,each party essentially advances...

Question 13

Kathleen offers to buy Richard's prize stallion for $10,000 only if a licensed veterinarian certifies that the horse is sound for breeding.After inspecting the stallion,the veterinarian concludes that the stallion is sterile and thus not fit for breeding.Kathleen

Accepted Answer

Kathleen's offer was conditional upon the stallion being fit for breeding, which the veterinarian has determined it is not. Therefore, Kathleen is no longer obligated to buy the stallion.

Question 14

The injury suffered by a nonbreaching party due to the breach of a con?tract may be remedied by payment of compensatory damages.

Accepted Answer

Compensatory damages are intended to compensate the nonbreaching party for the actual loss suffered as a result of the breach of contract.

Question 15

Consequential damages are foreseeable damages that arise from a party's breach of a contract.

Accepted Answer

Consequential damages are damages that were foreseeable at the time the contract was formed and are a result of the breach of contract.

Question 16

Compensatory damages are stipulated in a contract in an amount that the parties believe to be a reasonable estimate of the damages that will occur on a breach.

Accepted Answer

Compensatory damages are awarded by a court to compensate for actual loss, while liquidated damages are stipulated in a contract as a reasonable estimate of damages in case of breach.

Question 17

Safe-T Guard Services enters into a contract to secure Taylor's Business Park from vandalism and theft between 6 p.m.and 6 A.m.nightly for six months.At the end of the term,if there has been no vandalism or theft in the Park,Safe-T's performance will have been

Accepted Answer

The answer of Safe-T Guard Services enters into a contract...

Question 18

Specific performance is an equitable remedy requiring exactly the performance that was specified in a contract.

Accepted Answer

Specific performance is a remedy in which a court orders a party to exactly perform what was promised in a contract, as opposed to awarding damages instead.

Question 19

Expenses that are caused directly by a breach of contract-such as those in?curred to obtain performance from another source-are compensatory dam?ages.

Accepted Answer

The answer of Expenses that are caused directly by a...

Question 20

Punitive damages are generally available in contract disputes.

Accepted Answer

Punitive damages are rarely available in contract disputes. They are typically only awarded in cases of intentional or egregious misconduct, and are more commonly associated with tort (personal injury) cases. Contract disputes are typically resolved through compensatory damages, which are intended to compensate the injured party for any losses or damages they suffered as a result of the breach of contract.

Quiz 16: Contract Discharge and Remedies