Question 1

Bret contracts to work for City Construction Corporation (CCC)dur?ing July for $4,500.On June 30,CCC cancels the contract.Bret declines a similar job with Downtown Builders,Inc. ,which would have paid $4,000.Bret files a suit against CCC.As compensatory damages,Bret can recover

Accepted Answer

Bret can recover the difference between what he would have earned with CCC ($4,500) and what he could have earned with Downtown Builders, Inc. ($4,000), which is $500. Therefore, the compensatory damages would be $500.

Question 2

Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corpo?ration.Fresh Food does not pay for the storage.Earl sells the fruit to Green Grocers,Inc.This sale represents

Accepted Answer

Earl's action of selling the fruit to Green Grocers, Inc. can be considered a mitigation of damages as he is trying to minimize his losses by selling the fruit instead of letting it perish in storage. It is not a breach of contract as there is no mention of any contract between Earl and Fresh Food Corporation regarding payment for storage. Rescission and restitution and specific performance are also not applicable in this scenario.

Question 3

Cooper's Brakes,Inc. ,enters into a contract with Byron's Service to fix Cooper's hydraulic equipment.Byron delays the repair for five days,aware that Cooper loses a certain percentage of profit each day.An award to Cooper of consequential damages would

Accepted Answer

Consequential damages are damages that arise as a foreseeable result of a party's breach beyond the terms of the contract. In this case, Cooper's loss of profits due to the delayed repair is a foreseeable result of Byron's breach of the contract. Therefore, an award of consequential damages will provide Cooper with funds for a foreseeable loss beyond the contract.

Question 4

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

Accepted Answer

Since there was an oral agreement between Mitchell and Lorena, there is a possibility that a valid contract existed. However, since Mitchell breached the contract by backing out after Lorena had already prepared the land and planted the first crop, Lorena may be able to recover through quasi-contract. Quasi-contract is a legal remedy designed to prevent unjust enrichment. If a contract is not found to exist, but one party has received a benefit from the other party, then the courts may impose a quasi-contractual obligation to compensate the other party for the value of the benefit received. In this case, Lorena has already provided a benefit to Mitchell by preparing the land and planting the first crop, and so she may be able to recover the value of that benefit through quasi-contract.

Question 5

A contract between E-Debits,Inc. ,and Fiscal Credit Corporation includes a provision excluding liability as a result of fraud.This provision is

Accepted Answer

A provision excluding liability as a result of fraud is generally considered against public policy and is therefore not enforceable. Parties cannot contract away their liability for intentional wrongdoing, such as fraud.

Question 6

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 placed a specific time constraint that was clearly communicated to Mining Supplies Company. As Mining Supplies Company failed to deliver the drill on time, Lava has the right to recover the amount promised, which is $10,000. However, Lava still needs the drill to continue its operations, so it cannot simply return the drill and recover the full amount paid. Therefore, the best choice for Lava is to recover the promised amount of $10,000, but still keep the drill by deducting the late shipment as a penalty. Hence, the total amount recoverable for Lava would be $10,000 only.

Question 7

Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week.When Handy cancels the contract,Ilsa spends $100 to obtain a similar job that pays $450 per week for a year.Ilsa is entitled to recover

Accepted Answer

Ilsa is entitled to recover the difference between the wages at the two jobs, which is $50 per week, for a total of $2,600 ($50 per week for 52 weeks). Additionally, she spent $100 to obtain the similar job, so she is entitled to recover that as well, bringing the total to $2,700.

Question 8

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 her.The court will most likely

Accepted Answer

Stefani breached the agreement with Tristan by accepting a higher-paying job at Rock Star Arena. As a result, Tristan can sue Stefani for breach of contract and claim damages. The court is likely to award damages to Tristan. Cancelling Stefani and Rock Star's contract or ordering Stefani to perform the contract would not be suitable remedies in this case. Reforming the contract is not applicable as the issue is a breach of contract.

Question 9

Clutch Auto Parts enters into a contract with Bio Health Club for discounted memberships for Clutch's employees.Bio breaches the contract and Clutch enters into a contract with Apex Fitness for the same service at a lower price.Clutch might be awarded nominal damages to

Accepted Answer

Nominal damages are a small amount of money awarded to show that a legal right has been violated, even if there are no actual damages to compensate for. In this case, Clutch may be awarded nominal damages to establish that Bio breached the contract, even if Clutch found a better deal with Apex Fitness.

Question 10

Kris contracts to work exclusively for Little Manufacturing Company during May for $5,000.On April 30,Little cancels the contract.Kris finds another job dur?ing May but earns only $3,000.Kris files a suit against Little.As compen?satory damages,Kris can recover

Accepted Answer

Kris can recover the difference between the amount they would have earned with Little Manufacturing Company ($5,000) and the amount they actually earned with their new job ($3,000), which is $2,000. Therefore, the answer is B.

Question 11

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

Samantha can seek specific performance, which is a legal remedy that compels Ralph to fulfill his contractual obligation to sell the Double-R Ranch, as real estate is considered unique.

Question 12

For Petra to recover the benefit of her bargain from a breached real estate contract with River City Properties,Inc. ,the most appropriate remedy is

Accepted Answer

The best remedy for Petra to recover the benefit of her bargain from a breached real estate contract with River City Properties, Inc. is specific performance. This remedy will require the party to fulfill their obligations under the contract, such as selling the property to Petra as agreed upon. Damages may also be awarded, but specific performance is the primary remedy for breached real estate contracts. Quasi-contractual recovery and rescission are not appropriate remedies in this situation.

Question 13

Drew contracts to sell a residential duplex to Evan.The contract pro?vides that if Drew does not close the deal by September 15,he must pay Evan one-half of the contract price.This provision is not enforceable be?cause it is

Accepted Answer

The provision in the contract stating that Drew must pay Evan one-half of the contract price if he fails to close the deal by September 15 is a penalty clause. Penalty clauses are not enforceable because they penalize a party for failing to perform instead of compensating the other party for actual damages incurred.

Question 14

Fact Pattern 18-B1 
Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to subdivide and sell in fifth-acre lots for Pristine Acres,a residential development.
-Refer to Fact Pattern 18-B1.If Bella breaches the contract,Watershed's remedy would most likely be

Accepted Answer

If Bella breaches the contract, Watershed's remedy would most likely be the difference between the land's contract and market prices, which is a common measure of damages in real estate transactions when a buyer breaches a contract.

Question 15

GroundCover Pools,Inc. ,agrees to build a swimming pool for Franci,but fails to complete the job.Franci hires EquiAqua,Inc. ,to finish the project.Candy may recover from GroundCover

Accepted Answer

Franci can recover the costs needed to complete the construction from GroundCover, since they failed to complete the job as contracted.

Question 16

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 meant to provide an estimate of the actual damages suffered by the nonbreaching party in the event of a breach. It is not intended to punish or penalize the breaching party, but rather to provide a reasonable remedy for the nonbreaching party. Therefore, option B, which states that the amount specified is a reasonable estimate of the loss on a breach, is the correct choice.

Question 17

Fact Pattern 18-B1 
Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to subdivide and sell in fifth-acre lots for Pristine Acres,a residential development.
-Refer to Fact Pattern 18-B1.If Watershed breaches the contract,Bella's remedy would most likely be

Accepted Answer

Bella's remedy for Watershed's breach of contract would most likely be specific performance, which would require Watershed to fulfill its duties under the contract by transferring ownership of the 132 acres to Bella Homes. This is the most appropriate remedy because the land is unique, and damages alone may not adequately compensate Bella for the loss of the opportunity to subdivide and sell the land for development.

Question 18

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

Accepted Answer

Valerie has a duty to take reasonable steps to reduce the damages that she might otherwise suffer as a result of Windstar's breach of contract. This means that she should try to find alternative employment or seek damages from Windstar to cover her losses, but she cannot simply do nothing or breach the contract herself. She also does not have a duty to sue Windstar to deter others from similar acts, although she may choose to do so if she believes it is in her best interest.

Question 19

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

Accepted Answer

Reformation is the most appropriate remedy for an erroneous legal description in a contract for sale of land. This remedy allows for the contract to be corrected without completely canceling the agreement, as would be the case with rescission. Quasi-contractual recovery and specific performance are not appropriate remedies in this situation.

Question 20

Value Ventures,Inc. ,contracts to buy Umbrage Corporation's as?sets.Umbrage breaches the contract.Value files a suit against the corporation,seeking various remedies.The doc?trine of election of remedies has been elimi?nated in contracts involving sales of

Accepted Answer

The doctrine of election of remedies has been eliminated in contracts involving sales of goods under the Uniform Commercial Code (UCC). Neither B (intellectual property), C (real property), nor D (services) are governed by the UCC and therefore are not subject to the elimination of the doctrine.

Quiz 18: B: Breach of Contract and Remedies

Bret contracts to work for City Construction Corporation (CCC) dur?ing July for $4,500.On June 30,CCC cancels the contract.Bret declines a similar job with Downtown Builders,Inc. ,which would have paid $4,000.Bret files a suit against CCC.As compensatory damages,Bret can recover