Question 1

When a contract mistakenly specifies a crane instead of a forklift, a court could reform the contract to reflect the parties' original intent as to the equipment.

Accepted Answer

A) True 
 B)False

Question 2

Faiz enters into a contract to buy 350 acres from Grain Farm to cultivate hops and open a brewery. Faiz fails to make the purchase. Grain Farm's remedy is most likely

Accepted Answer

A)  the amount that Faiz expected to invest in the brewery. 
B)  a percentage of Faiz's unrealized profit. 
C)  the difference between the contract and market prices of the land. 
D)  nothing-Grain Farm still owns the land. 
A)  the amount that Faiz expected to invest in the brewery. 
B)  a percentage of Faiz's unrealized profit. 
C)  the difference between the contract and market prices of the land. 
D)  nothing-Grain Farm still owns the land.

Question 3

There is a remedy available for nearly every breach of contract.

Accepted Answer

A) True 
 B)False

Question 4

When a breach is material and willful, an innocent party seeking to rescind it must show that the contracting parties cannot be restored to the status quo.

Accepted Answer

A) True 
 B)False

Question 5

Sometimes, when a buyer breaches a contract for a sale of goods and the seller has not yet produced the goods, the seller can recover the lost profits.

Accepted Answer

A) True 
 B)False

Question 6

Berry Farm hires Chun to repair its irrigation system on site by a certain date for $2,500, but Chun fails to perform. Berry Farm hires Diego to do the job for $2,000. In a suit for breach, Berry Farm may recover from Chun

Accepted Answer

A)  nothing-there is only a technical injury. 
B)  compensatory damages. 
C)  punitive damages. 
D)  nominal damages. 
A)  nothing-there is only a technical injury. 
B)  compensatory damages. 
C)  punitive damages. 
D)  nominal damages.

Question 7

A contract between Speculative Investment Company and Trusts & Bonds Inc. excludes liability as a result of fraud. This exclusion is enforceable

Accepted Answer

A)  because the parties are protected from liability. 
B)  because the parties consented to it. 
C)  if the parties have equal bargaining power. 
D)  under none of the choices. 
A)  because the parties are protected from liability. 
B)  because the parties consented to it. 
C)  if the parties have equal bargaining power. 
D)  under none of the choices.

Question 8

Complete Boring Corporation ships its only pump to Drills & Bits, Inc., the manufacturer, for repair. Complete Boring hires Everywhere Shipping, Inc., to take the pump to Drills & Bits and to return it to Complete Boring as soon as the repair is complete. Complete Boring is forced to suspend operations without a pump, but Everywhere Shipping does not know this. Complete Boring 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, Complete Boring rents a pump at a cost of $100 per day. Everywhere Shipping delays five more days before returning the pump. Complete Boring files a suit against Everywhere Shipping, asking for compensatory, consequential, and punitive damages. Will Complete Boring recover?

Accepted Answer

Yes and no. Complete Boring will succeed

Question 9

On the breach of a contract for a sale of land when the seller has sold the property to someone else, an award of specific performance is unavailable.

Accepted Answer

A) True 
 B)False

Question 10

Sabo contracts to work exclusively for Thermal Company during July for $5,000. On June 30, Thermal cancels the contract. Sabo finds a similar job for the month of July but earns only $3,000. Sabo files a suit against Thermal. As compensatory damages, Sabo can recover

Accepted Answer

A)  $5,000. 
B)  $3,000. 
C)  $2,000. 
D)  $0. 
A)  $5,000. 
B)  $3,000. 
C)  $2,000. 
D)  $0.

Question 11

A court will grant specific performance as a remedy only when the legal remedy is adequate.

Accepted Answer

A) True 
 B)False

Question 12

To induce the sale of an auto parts business, Carmel fraudulently represents the worth of the inventory to Drew, who offers an inflated price. They enter into a contract to close the deal. On closer inspection, the buyer learns the true value of the goods. Drew can

Accepted Answer

A)  impose a penalty on the seller. 
B)  force the seller to accept a more reasonable price. 
C)  rescind the contract. 
D)  none of the choices. 
A)  impose a penalty on the seller. 
B)  force the seller to accept a more reasonable price. 
C)  rescind the contract. 
D)  none of the choices.

Question 13

Ochre holds one ton of perishable fruit in storage for Produce Corporation. If Produce does not pay for the storage, under the doctrine of mitigation of damages, Ochre is held to a duty to

Accepted Answer

A)  continue to store the fruit until Produce pays. 
B)  do whatever is reasonable to minimize the damages. 
C)  dispose of the fruit immediately. 
D)  set an example to deter similar misconduct in the future. 
A)  continue to store the fruit until Produce pays. 
B)  do whatever is reasonable to minimize the damages. 
C)  dispose of the fruit immediately. 
D)  set an example to deter similar misconduct in the future.

Question 14

In most situations, when a breach of contract occurs, the injured party is held to a duty to mitigate, or reduce, the damages that he or she suffers.

Accepted Answer

A) True 
 B)False

Question 15

A restrictive covenant imposed as part of a sale of an ongoing business will be enforced even if the restrictions are unreasonable.

Accepted Answer

A) True 
 B)False

Question 16

A contract clause that provides the only remedy for breach is repair, replacement, or refund of the purchase price is invalid and unenforceable.

Accepted Answer

A) True 
 B)False

Question 17

Sparkling Jewelers breaches its lease with Town Mall and vacates the premises six months before the end of the term. In some states, the mall would be required to

Accepted Answer

A)  avoid reletting the premises for six months to recover damages. 
B)  use reasonable means to find a new tenant. 
C)  relet the premises to recover any damages. 
D)  sell the premises to recover any damages. 
A)  avoid reletting the premises for six months to recover damages. 
B)  use reasonable means to find a new tenant. 
C)  relet the premises to recover any damages. 
D)  sell the premises to recover any damages.

Question 18

Bagels Bakery enters into a contract with Cineplex for discounted tickets for Bagels's employees. When Cineplex does not provide the tickets, Bagels enters into a contract with DigiMovies for the same service at a lower price. In a suit for breach, Bagels might be awarded nominal damages to

Accepted Answer

A)  establish, as a matter of principle, that Cineplex acted wrongfully. 
B)  provide Bagels with funds for a foreseeable loss beyond the contract. 
C)  provide Bagels with funds for its loss of the bargain. 
D)  punish Cineplex and set an example to deter others from similar acts. 
A)  establish, as a matter of principle, that Cineplex acted wrongfully. 
B)  provide Bagels with funds for a foreseeable loss beyond the contract. 
C)  provide Bagels with funds for its loss of the bargain. 
D)  punish Cineplex and set an example to deter others from similar acts.

Question 19

If a surgeon breaches a contract by refusing to perform an operation, a court will normally compel performance through an award of specific performance.

Accepted Answer

A) True 
 B)False

Question 20

Foundation Construction Company agrees to lay a foundation for Garth, but fails to finish the job. Garth hires Housing Projects Inc. to complete the work. In a suit for breach, Garth may recover from Foundation

Accepted Answer

A)  nothing. 
B)  the contract price. 
C)  the costs needed to complete construction. 
D)  profits plus the costs incurred up to the time of the breach. 
A)  nothing. 
B)  the contract price. 
C)  the costs needed to complete construction. 
D)  profits plus the costs incurred up to the time of the breach.

Exam 17: Breach and Remedies

When a contract mistakenly specifies a crane instead of a forklift, a court could reform the contract to reflect the parties' original intent as to the equipment.

Faiz enters into a contract to buy 350 acres from Grain Farm to cultivate hops and open a brewery. Faiz fails to make the purchase. Grain Farm's remedy is most likely

There is a remedy available for nearly every breach of contract.

When a breach is material and willful, an innocent party seeking to rescind it must show that the contracting parties cannot be restored to the status quo.

Sometimes, when a buyer breaches a contract for a sale of goods and the seller has not yet produced the goods, the seller can recover the lost profits.

Berry Farm hires Chun to repair its irrigation system on site by a certain date for $2,500, but Chun fails to perform. Berry Farm hires Diego to do the job for $2,000. In a suit for breach, Berry Farm may recover from Chun

A contract between Speculative Investment Company and Trusts & Bonds Inc. excludes liability as a result of fraud. This exclusion is enforceable

On the breach of a contract for a sale of land when the seller has sold the property to someone else, an award of specific performance is unavailable.

Sabo contracts to work exclusively for Thermal Company during July for $5,000. On June 30, Thermal cancels the contract. Sabo finds a similar job for the month of July but earns only $3,000. Sabo files a suit against Thermal. As compensatory damages, Sabo can recover

A court will grant specific performance as a remedy only when the legal remedy is adequate.

To induce the sale of an auto parts business, Carmel fraudulently represents the worth of the inventory to Drew, who offers an inflated price. They enter into a contract to close the deal. On closer inspection, the buyer learns the true value of the goods. Drew can

Ochre holds one ton of perishable fruit in storage for Produce Corporation. If Produce does not pay for the storage, under the doctrine of mitigation of damages, Ochre is held to a duty to

In most situations, when a breach of contract occurs, the injured party is held to a duty to mitigate, or reduce, the damages that he or she suffers.

A restrictive covenant imposed as part of a sale of an ongoing business will be enforced even if the restrictions are unreasonable.

A contract clause that provides the only remedy for breach is repair, replacement, or refund of the purchase price is invalid and unenforceable.

Sparkling Jewelers breaches its lease with Town Mall and vacates the premises six months before the end of the term. In some states, the mall would be required to

Bagels Bakery enters into a contract with Cineplex for discounted tickets for Bagels's employees. When Cineplex does not provide the tickets, Bagels enters into a contract with DigiMovies for the same service at a lower price. In a suit for breach, Bagels might be awarded nominal damages to

If a surgeon breaches a contract by refusing to perform an operation, a court will normally compel performance through an award of specific performance.

Foundation Construction Company agrees to lay a foundation for Garth, but fails to finish the job. Garth hires Housing Projects Inc. to complete the work. In a suit for breach, Garth may recover from Foundation

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