Question 1

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 the damages that he might suffer. This means that Scott must take reasonable steps to minimize the harm caused by the breach, such as looking for alternative employment. Scott cannot simply sit back and claim damages without taking any action to mitigate his losses. Therefore, the best choice is B.

Question 2

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

The consequential damages that Carousel Sports Park can recover are the loss of profit from the canceled game. This is because Damon's failure to repair the turf resulted in the cancellation of the game, causing Carousel to lose out on the profits that would have been generated from the game. The cost of new turf or the difference between Damon's price and the actual cost of repair may be direct damages, but not consequential damages in this case. Therefore, the best choice is C.

Question 3

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, which caused harm to Tristan. As a result, the court will likely award damages to Tristan, compensating him for the loss he suffered due to Stefani's breach. Cancelling Rock Star's contract or ordering Stefani to perform the original contract may not be feasible or appropriate options in this case. Reforming the contract is also unlikely as the breach has already occurred.

Question 4

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

Accepted Answer

In order to rescind the contract, both parties must return what they received in the transaction. Lester must return the $40 and Myrtle must return the MP3 player. This is known as a mutual rescission, where both parties agree to undo the contract and return to their original positions before entering into the agreement. Option B and C do not account for both parties rescinding the contract, while Option D would not be considered a rescission as both parties would be keeping the benefits of the contract.

Question 5

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 6

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 in the contract that Drew must pay Evan one-half of the contract price if he does not close the deal by February 10 is considered a penalty clause. A penalty clause is a provision in a contract that imposes an excessive or disproportionate penalty on one party for a breach of the contract. Courts generally do not enforce penalty clauses and may consider them invalid.

Question 7

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

Ralph cannot back out of the contract unilaterally and must convey the Double-R ranch to Samantha as per the agreed-upon terms. Therefore, Samantha can recover the Double-R Ranch.

Question 8

SealCoat Paving enters into a contract with Royal Golf & Tennis Club to provide surface material for Royal's tennis courts by April 1 for a tournament to begin May 1.The contract specifies an amount to be paid if the contract is breached.This is a liquidated damages clause if the amount is

Accepted Answer

A liquidated damages clause is a pre-determined amount that is agreed upon by the parties in case of a breach. The purpose of the clause is to provide compensation to the non-breaching party for the losses suffered due to the breach. The amount specified in the clause must be a reasonable estimation of the actual damages that the non-breaching party would suffer. Therefore, a liquidated damages clause is not intended to penalize the breaching party, nor is it meant to provide additional liquid sealant or quick cash to the non-breaching party. Choice B accurately describes the purpose of a liquidated damages clause in a contract.

Question 9

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 10

Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company.Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000.Mining ships the drill late.Lava can recover

Accepted Answer

Lava has specified in its order that it must receive the drill by Tuesday or it will lose $10,000. This is a liquidated damages clause, and it means that if Mining Supplies Company fails to deliver the drill on time, Lava is entitled to recover $10,000. Since the drill was shipped late, Lava can recover the $10,000 specified in the contract. Therefore, the best choice is B.

Question 11

Sonny agrees to buy a unique collection of Olympics memorabilia for $7,000 from Jana and sends $1,500 as a down payment.When Sonny sends Jana the rest of the price, she refuses to ship the collection.Sonny should seek

Accepted Answer

Specific performance is the appropriate remedy in this scenario as it involves the court ordering Jana to complete her end of the contract and deliver the collection to Sonny as agreed upon. This is the best choice as it allows Sonny to receive the unique collection he bargained for, which cannot be obtained from any other seller. Penalties, liquidated damages, and restitution are not appropriate remedies in this situation as they do not involve forcing Jana to fulfill her contractual obligation to Sonny.

Quiz 15: Contract Performance, Breach, and Remedies