Exam 17: Breach and Remedies

Special damages that compensate for a loss caused by circumstances beyond the contract itself are incidental damages.

A seller cannot avoid the risk of liability for consequential damages by limiting the buyer's remedies in their contract.

The function of a quasi contract is to impose a legal obligation on a party who purposely failed to fulfill an express promise.

Builders Inc. agrees to construct an office building for Commerce Center Corporation. The project proceeds according to plan, but before it is done, the buyer tells Builders to quit. In a suit for breach, Builders may recover

Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a similar job with Tech Talk, Inc., which would have paid $3,500. Rita files a suit against SMC. As compensatory damages, Rita can recover

Dino hires Eve to perform at Dino's Club, but Eve later breaches the agreement to accept a higher-paying job at Five Star Arena. Dino files a suit against Eve. The court will most likely

City Nurses College loses its accreditation. As a consequence, City students can still obtain a state nurse's license, but their earning capacity is impaired. In a suit against the school for breach, the students are most likely to recover

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

The Uniform Commercial Code provides that remedies may not be limited in a contract for the sale of goods.

Ziplines Inc. enters into a contract to employ Scot as a manager for two years. If Ziplines breaches the contract, Scot has a duty to

In most states, a person whose employment is wrongfully terminated has no duty to take a similar job if one is available.

Daisy enters into a contract with Evan for the construction of a Fast Food Café, according to a certain schedule. The parties perform some preparatory steps, but Evan materially and willfully fails to begin work on the specified date. To rescind the contract, Daisy must show that the parties can

Reese contracts to sell her Saucy Pizza restaurant to Titian. As part of the deal, Reese agrees not to open a competing business within a hundred-mile radius for ten years. Reese later sues Titian, alleging that the agreement is illegal. To enforce the covenant not to compete, the court will most likely

Restitution may be available in situations when damages cannot be proved or are difficult to prove.

Repair Service enters into a contract to fix washing machines in Soapy Suds Company's coin-operated laundries. Repair breaches the contract. Soapy is awarded compensatory damages. The purpose is to

Lyn orally contracts to sell five acres of timber to Mountain Mill LLC. The buyer harvests the trees but fails to remit the full price. Because of the lack of a written contract, Lyn could most likely recover on a theory of

Dwellings Inc. enters into a contract with Estates Management to manage and maintain Dwellings's apartment complex. Their contract contains a clause that limits Estates's liability except in cases of gross negligence or willful misconduct. With respect to this clause, a court would most likely

Metro Holdings Inc. contracts to sell a commercial parking garage to New Property LLC. The contract provides that if Metro does not close the deal by a certain date, it must pay the buyer one-half of the value of the property. This provision is not enforceable if it is

When no actual damage or loss results from a breach of contract and only a technical injury is involved, the innocent party can recover no damages.

Between parties in equal bargaining positions, a contract provision that states no damages can be recovered for certain types of breaches may be enforced.