Question 1

A contract between Recreational Games & Rides,Inc.,and Summer Fair Corporation includes a provision excluding liability as a result of fraud.This provision is

Accepted Answer

A provision excluding liability for fraud is against public policy and therefore not enforceable, even if the parties agreed to it and have equal bargaining power. Fraud is a serious offense and individuals should not be able to waive their rights to seek legal recourse for it.

Question 2

Bread & Bagels Bakery enters into a contract with Cineplex for discounted tickets for Bread & Bagels' employees.Cineplex breaches the contract and Bread & Bagels enters into a contract with DigiMovies for the same service at a lower price.Bread & Bagels might be awarded nominal damages to

Accepted Answer

Nominal damages are awarded to recognize that a legal wrong has occurred, even if no actual financial loss resulted from the breach.

Question 3

Leif contracts to sell his Micro Brewery & Pub to Naomi on April 1.On March 15,Leif tells Naomi that he will not go through with the deal.Naomi can recover

Accepted Answer

Naomi can seek specific performance, which is a legal remedy that compels the breaching party to fulfill the terms of the contract, especially when the subject matter is unique, such as a specific business like a Micro Brewery & Pub.

Question 4

Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500,but Elliot does not show up as agreed.Dry Gulch hires Fernando to do the job for $2,000.Dry Gulch may recover from Elliot

Accepted Answer

The answer of Dry Gulch Farms hires Elliot to repair...

Question 5

Meatpackers,Inc.,enters into a contract with Nemiah's Ranch for the delivery of a certain number of beef cattle on a set schedule.Nemiah's delays the first delivery for five days,aware that Meatpackers loses a certain percentage of profit each day.An award to Meatpackers of consequential damages would

Accepted Answer

Consequential damages are awarded to compensate the non-breaching party for losses that were a foreseeable result of the breach, but that were not directly caused by the breach itself. In this case, Meatpackers had a foreseeable loss beyond the contract due to the delay caused by Nemiah's. Therefore, an award of consequential damages would provide Meatpackers with funds for this loss. The other options are not relevant to the purpose of awarding consequential damages.

Question 6

Rebecca hires Samson to perform music at Becca's Bistro,but he breaches the agreement to accept a higher-paying job at Three Courses Dinner Theater.Rebecca files a suit against him.The court will most likely

Accepted Answer

Samson breached his contract with Rebecca by accepting a higher-paying job. As a result, Rebecca can file a suit for damages - compensation to cover lost profits, expenses incurred due to Samson's breach, and any other damages suffered as a result of the contract being breached. The court is unlikely to cancel or reform the contract, as it was Samson who breached it by accepting another job offer. Therefore, the most likely outcome is for the court to award damages to Rebecca.

Question 7

Dawson owns Evergreen,a complex under construction that will include commercial and residential suites,as well as a parking garage.Dawson allows First Call Construction,Inc.,the contractor,to complete a stage of construction late.This waives Dawson's right to sue for

Accepted Answer

By waiving the right to sue for the delayed stage of construction, Dawson is only giving up their right for this particular breach and not for any future breaches that may occur.

Question 8

Metro Facilities,Inc.,contracts to sell a parking garage to Nouveau Property Company.The contract provides that if Metro does not close the deal by September 15,it must pay Nouveau one-half of the contract price.This provision is not enforceable because it is

Accepted Answer

The provision that requires Metro Facilities to pay Nouveau Property Company one-half of the contract price if they fail to close the deal by September 15 is a penalty clause. A penalty clause is an unenforceable provision in a contract that requires one party to pay an excessive amount of damages for a breach of contract. Here, the amount of damages required is disproportionate to the loss that would be suffered by Nouveau if the contract was not closed by September 15.

Question 9

Ileana orally agrees to pay Jaime to plant and harvest a quarter of Ileana's farm acreage for four corn-planting seasons.After Jaime prepares the land and plants the first crop,Ileana says that their deal is off.Jaime can most likely recover

Accepted Answer

In quasi contract, also known as a contract implied in law, the court can create a contractual relationship between the parties even if they did not have an actual contract. This remedy is typically used when one party has been unjustly enriched at the expense of the other, as in this situation where Jaime has already put in work to prepare the land and plant the first crop. While there may be other potential remedies available, quasi contract seems like the most applicable option given the circumstances described.

Question 10

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

Accepted Answer

Sati can recover the difference between the amount she would have earned under the contract (i.e. $5,000) and the amount she actually earned from the substitute job (i.e. $3,000). Therefore, the compensatory damages would be $2,000.

Question 11

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 $3500.Rashi files a suit against Social Data.As compensatory damages,Rashi can recover

Accepted Answer

Rashi is entitled to recover the full amount of the contract price, $4,500, as compensatory damages.

Question 12

A contract for a sale of land from Bayside Properties,Inc.,to City Development Corporation contains an erroneous legal description.The most appropriate remedy for these parties is

Accepted Answer

Reformation is the appropriate remedy in this situation as it allows the parties to correct the erroneous legal description in the contract. This remedy helps to reflect the true intention of the parties and ensures that the contract accurately represents the terms agreed upon. Quasi-contractual recovery, rescission, and specific performance are not appropriate remedies in this situation as they do not directly address the issue of the erroneous legal description.

Question 13

Handcrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week.When Handcrafts & Hobbies cancels the contract,Iliana spends $150 to obtain a similar job that pays $450 per week for a year.Iliana is entitled to recover

Accepted Answer

Iliana is entitled to recover the difference between the wages at the two jobs because she had an expectation to earn the higher salary promised to her by Handcrafts & Hobbies, and had to spend additional money to secure a similar job. Therefore, she should be compensated for her loss of income. Additionally, she should be reimbursed for the $150 she spent to obtain the new job.

Question 14

Cowtown Creamery,Inc.,needs a certain part for its pasteurizing equipment to continue its operations and orders one for $3,000 from Dairy Supplies Company.Cowtown tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000.Dairy Supplies ships the part late.Cowtown can recover

Accepted Answer

Since Dairy Supplies was aware that Cowtown would lose $10,000 if the part did not arrive by Tuesday and still shipped it late, Dairy Supplies is liable for the full amount that Cowtown lost. Therefore, Cowtown can recover $10,000. They have only ordered the part for $3,000 and not lost that amount, which eliminates options A and C. Option D is also incorrect since Cowtown can recover $10,000.

Question 15

Porches & Verandas,Inc.,agrees to build a screen porch for Quinn,but fails to complete the job.Quinn hires Ramadas,Inc.,to finish the project.Quinn may recover from Porches & Verandas

Accepted Answer

Quinn may recover the costs needed to complete construction from Porches & Verandas since they failed to complete the job as agreed upon in the contract. This would allow Quinn to hire another contractor to finish the project and be reimbursed for the additional expenses incurred.

Question 16

Fact Pattern 19-B1 (Questions B4-B5 apply)
Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery.
-Refer to Fact Pattern 19-B1.If Belle Vista breaches the contract,Ambrose's remedy would most likely be

Accepted Answer

Ambrose's remedy for breach of contract by Belle Vista would most likely be specific performance, which would require Belle Vista to fulfill its promise to convey the 350 acres of land to Ambrose so that he can cultivate grapes and open a winery. This remedy is usually granted in cases involving unique property, such as real estate, where monetary damages would not adequately compensate the injured party. The other options, such as a certain ratio of expected investment, a percentage of unrealized profit, or the difference between contract and market prices, would provide only partial compensation and are unlikely to be granted as remedies in this case.

Question 17

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

Accepted Answer

Nonny should seek specific performance, which is a legal remedy to compel Piper to fulfill her contractual obligations and deliver the unique collection of Olympics memorabilia. Since the memorabilia are unique, there is no adequate substitute available in the market, and monetary damages won't suffice. Nonny has already paid a down payment, indicating her willingness to perform her part of the contract, and therefore, she is entitled to seek a court order for specific performance.

Question 18

Isaac holds one ton of perishable fruit in storage for Juice Smoothies Corporation.Juice Smoothies does not pay for the storage.Isaac sells the fruit to Kayo Beverage Company.This sale represents

Accepted Answer

The answer of Isaac holds one ton of perishable fruit...

Question 19

Fact Pattern 19-B1 (Questions B4-B5 apply)
Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery.
-Refer to Fact Pattern 19-B1.If Ambrose breaches the contract,Belle Vista's remedy would most likely be

Accepted Answer

The typical remedy for breach of a real estate contract is the difference between the contract price and the market price of the land at the time of the breach.

Question 20

Renew Turf,Inc.,enters into a contract with Sports Park to provide surface material for Sports Park's baseball fields by October 1 for a series to begin October 5.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 considered valid if it is a reasonable estimate of the loss that the nonbreaching party would incur in the event of a breach. It cannot be designed to penalize the breaching party, but rather compensate the nonbreaching party for the loss. Additionally, it is not intended to quickly provide cash to the nonbreaching party, but rather compensate them for their loss.

Quiz 19: Breach of Contract and Remedies