Question 1

Name two equitable remedies.Describe three ways in which a party will lose its right to claim an equitable remedy.

Accepted Answer

Both specific performance and injunction

Question 2

A willful or negligent act by the promissor that destroys its ability to fulfill its contractual promises amounts to a breach of contract.

Accepted Answer

A) True 
 B)False

Question 3

Farmer Gibson ordered an irrigation pump from Sinclair Farm Supply,where he has an open account.When they attempted to deliver,he refused to accept,claiming he could get a better deal elsewhere.Legally,Gibson could be charged for all damages that naturally flow from this breach.Assuming Sinclair made free deliveries and it had more pumps than customers,the damages would include

Accepted Answer

A) the damages associated with Gibson not being able to properly irrigate his land. 
B) only the expected profits on this item. 
C) transportation as well as a restocking charge. 
D) only two-way transportation to Gibson's farm. 
E) expected profits,delivery charge,and a restocking charge. 
A) the damages associated with Gibson not being able to properly irrigate his land. 
B) only the expected profits on this item. 
C) transportation as well as a restocking charge. 
D) only two-way transportation to Gibson's farm. 
E) expected profits,delivery charge,and a restocking charge.

Question 4

B.C.Metal Works agreed to purchase steel rod from Vancouver Smelters Ltd.Delivery was to take place on April 1.On March 24,Vancouver Smelters advised Metal Works that the steel rod could not be delivered because of production problems.Metal Works accepted the anticipatory breach of Vancouver Smelters and reserved their right to sue for damages.On April 1,Metal Works commenced looking for an alternate supply of steel rod and located a supply in Seattle,Washington.The rods could not be delivered for seven days,causing Metal Works to shut down their operations for three days.Metal Works sued Vancouver Smelters for breach of contract.What legal obligation did Metal Works have,and what remedy would they be entitled to?

Accepted Answer

Once B.C.Metal Works accepted the breach

Question 5

Onar Development stopped progress payments to its general contractor,Shape Construction.Upon the advice of their lawyer,Shape decided to sue for rescission of the contract rather than collect damages for breach.Shape will most likely

Accepted Answer

A) collect under quantum meruit. 
B) ask for specific performance. 
C) get expectation damages. 
D) file for bankruptcy. 
E) get an injunction. 
A) collect under quantum meruit. 
B) ask for specific performance. 
C) get expectation damages. 
D) file for bankruptcy. 
E) get an injunction.

Question 6

A party to a contract has a continuous expectation of performance.Explain.

Accepted Answer

The courts have held that a contract exi

Question 7

Speedy Courier Service has a phrase on their order form that reads,"We deliver on time or our delivery is free." In legal terminology,this is

Accepted Answer

A) an advertising gambit. 
B) liquidated damages. 
C) a promotional come-on. 
D) a self-imposed penalty clause. 
E) consequential damages. 
A) an advertising gambit. 
B) liquidated damages. 
C) a promotional come-on. 
D) a self-imposed penalty clause. 
E) consequential damages.

Question 8

A breach will discharge a contract if

Accepted Answer

A) the injured party elects to treat it as discharging the contract. 
B) the breach is of the whole contract or an essential part of the contract. 
C) the breaching party decides to abandon its obligations under the contract as a result of the breach. 
D) the breach causes injury to the innocent party. 
E) the innocent party suffers significant financial loss. 
A) the injured party elects to treat it as discharging the contract. 
B) the breach is of the whole contract or an essential part of the contract. 
C) the breaching party decides to abandon its obligations under the contract as a result of the breach. 
D) the breach causes injury to the innocent party. 
E) the innocent party suffers significant financial loss.

Question 9

Michael's Shop has a standard from contract that includes an exemption clause.Michael enters into an agreement with Jill.Jill signs the agreement without reading it because she says she trusts Michael.When Michael fails to perform his part of the agreement,Jill tries to sue.The court,in considering the effect of the exemption clause,will most likely

Accepted Answer

A) seek the opinion of Jill on how the clause will affect her. 
B) strictly construe the clause against Michael. 
C) require that experts provide it with a report on the effect of the clause. 
D) refuse to apply the court. 
E) apply the clause. 
A) seek the opinion of Jill on how the clause will affect her. 
B) strictly construe the clause against Michael. 
C) require that experts provide it with a report on the effect of the clause. 
D) refuse to apply the court. 
E) apply the clause.

Question 10

Should you win a money judgment in the court,how would you collect the money?

Accepted Answer

The force of the court judgment is usual

Question 11

George Edwards has just bought a brand new furnace from Henry's Furnace Company.Towards the end of the installation of the furnace,a piece of piping falls on the furnace and scratches one side of it.Because of the scratch,George does not want to pay for the furnace.In a lawsuit by Henry's Furnace Company for payment

Accepted Answer

A) George will successfully defend the lawsuit because the scratch is a major breach and terminates the contract. 
B) George will successfully defend the action because a brand new furnace is not the same as a scratched furnace. 
C) George will successfully defend the lawsuit because the scratch fundamentally changed the contract. 
D) George will lose the lawsuit because the scratch is a minor breach of the contract. 
E) George will lose the lawsuit because he already provided a post-dated cheque for the full amount of the furnace. 
A) George will successfully defend the lawsuit because the scratch is a major breach and terminates the contract. 
B) George will successfully defend the action because a brand new furnace is not the same as a scratched furnace. 
C) George will successfully defend the lawsuit because the scratch fundamentally changed the contract. 
D) George will lose the lawsuit because the scratch is a minor breach of the contract. 
E) George will lose the lawsuit because he already provided a post-dated cheque for the full amount of the furnace.

Question 12

There are three circumstances when a court will refuse to apply an exemption clause to protect the breaching party from liability.Which of the following is NOT one of these circumstances?

Accepted Answer

A) when the clause does not apply to the circumstances 
B) when there is a strong public policy reason against enforcement 
C) when the clause was unconscionable at the time of contracting 
D) when the parties were of equal bargaining power at the time of contracting 
A) when the clause does not apply to the circumstances 
B) when there is a strong public policy reason against enforcement 
C) when the clause was unconscionable at the time of contracting 
D) when the parties were of equal bargaining power at the time of contracting

Question 13

Exemption clauses are

Accepted Answer

A) not used in contracts for the sale of goods. 
B) strictly construed by the courts against the party that seeks to rely on them. 
C) not considered by courts. 
D) strictly construed by the courts against the parties for whom they are drawn. 
E) not used in employer-employee contracts. 
A) not used in contracts for the sale of goods. 
B) strictly construed by the courts against the party that seeks to rely on them. 
C) not considered by courts. 
D) strictly construed by the courts against the parties for whom they are drawn. 
E) not used in employer-employee contracts.

Question 14

Nominal damages are

Accepted Answer

A) assessed with purely personal or passionate reasons. 
B) assessed where a party commits a tort within the context of a contract. 
C) awarded to serve as an acknowledgement to a breach of contract where no appreciable loss has been sustained by the promisee. 
D) used for allowing the case to go to a higher court. 
E) where damages are determined by local bylaws. 
A) assessed with purely personal or passionate reasons. 
B) assessed where a party commits a tort within the context of a contract. 
C) awarded to serve as an acknowledgement to a breach of contract where no appreciable loss has been sustained by the promisee. 
D) used for allowing the case to go to a higher court. 
E) where damages are determined by local bylaws.

Question 15

Give an example of a business mitigating the effects of breach of contract by the other party.

Accepted Answer

For example,perishable goods that are no

Question 16

Use the fact situation in Q5 to answer the related question that follows. In the same lawsuit,the court is most likely to find that

Accepted Answer

A) the fax of February 2 from A Co.was a material change in the contract. 
B) the fax of February 2 from A Co.was an express repudiation of the contract. 
C) the contract between B Co.and C Co.on February 15 was proper in the circumstances. 
D) the fax of February 2 from A Co.was an implied repudiation. 
E) the entering into the contract with C Co.on February 15 was an express repudiation of the contract by B Co. 
A) the fax of February 2 from A Co.was a material change in the contract. 
B) the fax of February 2 from A Co.was an express repudiation of the contract. 
C) the contract between B Co.and C Co.on February 15 was proper in the circumstances. 
D) the fax of February 2 from A Co.was an implied repudiation. 
E) the entering into the contract with C Co.on February 15 was an express repudiation of the contract by B Co.

Question 17

Terms in a contract agreed to by parties of unequal bargaining power that give an unfair advantage to the powerful party over the weaker party are referred to as

Accepted Answer

A) material terms. 
B) warranties. 
C) unconscionable terms. 
D) conditions. 
E) standard terms. 
A) material terms. 
B) warranties. 
C) unconscionable terms. 
D) conditions. 
E) standard terms.

Question 18

Where an anticipatory breach occurs,the innocent party must carefully consider its election.Explain.

Accepted Answer

The election is to either accept the bre

Question 19

It is fair to say that the damages for breach of contract may well exceed the damages arising in tort.

Accepted Answer

A) True 
 B)False

Question 20

A party to a contract may break the contract in various ways.Explain.

Accepted Answer

A party to a contract may break it in th

Exam 13: Breach of Contract and Its Remedies

Name two equitable remedies.Describe three ways in which a party will lose its right to claim an equitable remedy.

A willful or negligent act by the promissor that destroys its ability to fulfill its contractual promises amounts to a breach of contract.

Onar Development stopped progress payments to its general contractor,Shape Construction.Upon the advice of their lawyer,Shape decided to sue for rescission of the contract rather than collect damages for breach.Shape will most likely

A party to a contract has a continuous expectation of performance.Explain.

Speedy Courier Service has a phrase on their order form that reads,"We deliver on time or our delivery is free." In legal terminology,this is

A breach will discharge a contract if

Should you win a money judgment in the court,how would you collect the money?

There are three circumstances when a court will refuse to apply an exemption clause to protect the breaching party from liability.Which of the following is NOT one of these circumstances?

Exemption clauses are

Nominal damages are

Give an example of a business mitigating the effects of breach of contract by the other party.

Use the fact situation in Q5 to answer the related question that follows. In the same lawsuit,the court is most likely to find that

Terms in a contract agreed to by parties of unequal bargaining power that give an unfair advantage to the powerful party over the weaker party are referred to as

Where an anticipatory breach occurs,the innocent party must carefully consider its election.Explain.

It is fair to say that the damages for breach of contract may well exceed the damages arising in tort.

A party to a contract may break the contract in various ways.Explain.

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

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