Question 1

Which of the following damages must be foreseeable in order to be collected?

Accepted Answer

A)  consequential 
B)  nominal and liquidated 
C)  compensatory,consequential,and punitive 
D)  consequential and compensatory 
E)  liquidated and compensatory 
A)  consequential 
B)  nominal and liquidated 
C)  compensatory,consequential,and punitive 
D)  consequential and compensatory 
E)  liquidated and compensatory

Question 2

When a court rewrites a contract to express the parties' true intentions,what remedy has it used?

Accepted Answer

A)  reformation 
B)  restitution 
C)  specific performance 
D)  substituted contract 
E)  quasi-contract 
A)  reformation 
B)  restitution 
C)  specific performance 
D)  substituted contract 
E)  quasi-contract

Question 3

When performance is tendered,this will discharge a party's contractual obligations.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is NOT one of the required elements of the tort of intentional interference with contractual relations?

Accepted Answer

A)  a valid,enforceable contract between the contracting parties 
B)  third-party knowledge of this contract 
C)  third-party inducement to breach the contract 
D)  malicious intent in inducing the breach 
A)  a valid,enforceable contract between the contracting parties 
B)  third-party knowledge of this contract 
C)  third-party inducement to breach the contract 
D)  malicious intent in inducing the breach

Question 5

Many states have held that there is an implied covenant of good faith and fair dealing in certain contracts.

Accepted Answer

A) True 
 B)False

Question 6

Rescission and restitution are designed to give the parties the benefit of the bargain.

Accepted Answer

A) True 
 B)False

Question 7

When one party materially breaches a contract,the other nonbreaching party is discharged from any further performance.

Accepted Answer

A) True 
 B)False

Question 8

Equitable remedies are available if there has been a breach of contract that cannot be adequately compensated by a legal remedy.

Accepted Answer

A) True 
 B)False

Question 9

What are liquidated damages in connection with a contract?

Accepted Answer

A)  damages that are used to punish the nonbreaching party 
B)  damages that are set at a fixed amount in advance in the contract 
C)  damages that are used when there are no actual damages 
D)  damages that require approval in advance from the court 
E)  damages that result in all assets of the breaching party being paid out as damages 
A)  damages that are used to punish the nonbreaching party 
B)  damages that are set at a fixed amount in advance in the contract 
C)  damages that are used when there are no actual damages 
D)  damages that require approval in advance from the court 
E)  damages that result in all assets of the breaching party being paid out as damages

Question 10

Michelle is hired as a corporate executive for a large corporation.She signed a three-year contract that will pay her $10,000 per month.Six months into the contract,the company unilaterally terminates the contract due to concerns over the company's future.How much money should Michelle be entitled to?

Accepted Answer

A)  $10,000 
B)  $60,000 
C)  $300,000 
D)  $360,000 
E)  None. The contract was terminated in good faith. 
A)  $10,000 
B)  $60,000 
C)  $300,000 
D)  $360,000 
E)  None. The contract was terminated in good faith.

Question 11

When rescinding a contract,the parties must make restitution of the consideration they received under the contract.

Accepted Answer

A) True 
 B)False

Question 12

Creative Charlie had sketched plans for an invention,but had not yet built a prototype.He wanted to make sure that the invention could actually be manufactured before going through the expense of applying for a patent.He contracted with a local machine shop to work on the prototypes.As part of the agreement,the machine shop agreed not to disclose any information about the invention.Charlie learned from one of the employees that the owner of the machine shop had successfully built a prototype without telling Charlie and that the owner was going to begin marketing the invention in a joint venture with another firm.Could Charlie get an injunction in this situation?

Accepted Answer

A)  No; this is a situation where the only allowable damages would be liquidated damages. 
B)  No; Charlie could be adequately compensated with compensatory damages. 
C)  Yes,assuming that Charlie would likely suffer irreparable harm if others learn of his invention and it becomes public before he can obtain a patent. 
D)  Yes,because this is an anticipatory breach and injunctions can be issued in connection with any anticipatory breach. 
A)  No; this is a situation where the only allowable damages would be liquidated damages. 
B)  No; Charlie could be adequately compensated with compensatory damages. 
C)  Yes,assuming that Charlie would likely suffer irreparable harm if others learn of his invention and it becomes public before he can obtain a patent. 
D)  Yes,because this is an anticipatory breach and injunctions can be issued in connection with any anticipatory breach.

Question 13

Which is the most basic or common remedy available for the breach of a contract?

Accepted Answer

A)  compensatory damages 
B)  consequential damages 
C)  punitive damages 
D)  nominal damages 
E)  equitable damages 
A)  compensatory damages 
B)  consequential damages 
C)  punitive damages 
D)  nominal damages 
E)  equitable damages

Question 14

Waldo washes windows with Worldwide Window Washers.Waldo has just begun the second year of a 3-year contract that pays him $30,000 per year.Even though Waldo has performed his job perfectly,he was suddenly told that his contract was being terminated.Waldo was offered a couple of other jobs shortly after this contract was terminated.The first was as a custodian in a city 200 miles away paying $24,000 a year.The second was as a cook in a local fast food restaurant paying $22,000 a year.Waldo took neither job.In connection with his duty to mitigate,which of the following is true?

Accepted Answer

A)  Waldo would not be obligated to accept the custodian job. 
B)  Waldo would not be obligated to accept the cook job. 
C)  Waldo would be obligated to accept neither job. 
D)  Waldo would be obligated to accept one of the jobs,but the choice of which one was up to Waldo. 
E)  Waldo is not obligated to accept any job of any kind for the duration of the contract that was breached. 
A)  Waldo would not be obligated to accept the custodian job. 
B)  Waldo would not be obligated to accept the cook job. 
C)  Waldo would be obligated to accept neither job. 
D)  Waldo would be obligated to accept one of the jobs,but the choice of which one was up to Waldo. 
E)  Waldo is not obligated to accept any job of any kind for the duration of the contract that was breached.

Question 15

Lost profits can be recovered as consequential damages only if they are related to an existing established business.

Accepted Answer

A) True 
 B)False

Question 16

When there is an anticipatory breach,the nonbreaching party's obligations under the contract are discharged immediately.

Accepted Answer

A) True 
 B)False

Question 17

When a client breaches a contract with a construction contractor in the early phase of construction,what is the contractor generally able to recover?

Accepted Answer

A)  the amount of the contract price 
B)  only the out-of-pocket costs incurred by the contractor up to the time of the breach 
C)  the amount necessary to provide the same profit to the contractor that the contractor would have earned if the contract were fully performed 
D)  three times the contract price as punitive damages 
E)  the amount determined by the court to have been a fair profit on the contract 
A)  the amount of the contract price 
B)  only the out-of-pocket costs incurred by the contractor up to the time of the breach 
C)  the amount necessary to provide the same profit to the contractor that the contractor would have earned if the contract were fully performed 
D)  three times the contract price as punitive damages 
E)  the amount determined by the court to have been a fair profit on the contract

Question 18

Liquidated damages clauses will generally not be enforced where courts view them as excessive,but courts generally do not inquire into whether liquidated damages clauses are too small.For example,when taking a roll of film to be developed,most developers include a liquidated damages clause to provide a new roll of film,and nothing more,in the event that the customer's film is lost or destroyed.Why is there this difference in treatment? Do you agree with this rule?

Accepted Answer

The concern with liquidated damages clau

Question 19

What kinds of damages will be awarded when there is no actual financial loss?

Accepted Answer

A)  special damages 
B)  consequential damages 
C)  nominal damages 
D)  compensatory damages 
E)  There are no damages that a court will award in the absence of an actual financial loss. 
A)  special damages 
B)  consequential damages 
C)  nominal damages 
D)  compensatory damages 
E)  There are no damages that a court will award in the absence of an actual financial loss.

Question 20

The general requirements for a liquidated damages clause to be enforceable are which of the following?

Accepted Answer

A)  Actual damages are difficult to determine and the liquidated damages amount is reasonable. 
B)  Actual damages exceed the amount foreseen by the parties. 
C)  The liquidated damages clause applies only to unforeseeable damages. 
D)  The breaching party used its best efforts to avoid a breach of the contract. 
E)  The parties have rescinded the contract. 
A)  Actual damages are difficult to determine and the liquidated damages amount is reasonable. 
B)  Actual damages exceed the amount foreseen by the parties. 
C)  The liquidated damages clause applies only to unforeseeable damages. 
D)  The breaching party used its best efforts to avoid a breach of the contract. 
E)  The parties have rescinded the contract.

Exam 16: Remedies for Breach of Traditional and E-Contracts

Which of the following damages must be foreseeable in order to be collected?

When a court rewrites a contract to express the parties' true intentions,what remedy has it used?

When performance is tendered,this will discharge a party's contractual obligations.

Which of the following is NOT one of the required elements of the tort of intentional interference with contractual relations?

Many states have held that there is an implied covenant of good faith and fair dealing in certain contracts.

Rescission and restitution are designed to give the parties the benefit of the bargain.

When one party materially breaches a contract,the other nonbreaching party is discharged from any further performance.

Equitable remedies are available if there has been a breach of contract that cannot be adequately compensated by a legal remedy.

What are liquidated damages in connection with a contract?

When rescinding a contract,the parties must make restitution of the consideration they received under the contract.

Which is the most basic or common remedy available for the breach of a contract?

Lost profits can be recovered as consequential damages only if they are related to an existing established business.

When there is an anticipatory breach,the nonbreaching party's obligations under the contract are discharged immediately.

When a client breaches a contract with a construction contractor in the early phase of construction,what is the contractor generally able to recover?

What kinds of damages will be awarded when there is no actual financial loss?

The general requirements for a liquidated damages clause to be enforceable are which of the following?

Legal Heritage and the Information Age

Court Systems and Jurisdiction

Judicial, Alternative, and Online Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Strict Liability and Product Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Internet Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Sales and Lease Warranties

Creation of Negotiable Instruments

Transferability and Holder In Due Course

Liability,Defenses and Discharge

Checks, the Banking System, and E-Money

Creditor's and Debtor's Rights

Secured Transactions and Electronic Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment,Worker Protection,and Immigration Laws

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Small Businesses, Entrepreneurs, and General Partnerships

Limited Partnerships and Limited Liability Limited Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchises and Special Forms of Business

Investor Protection and Online Securities Transactions

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection and Global Warming

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

Real Property

Landlord Tenant Law and Land Use Regulation

Insurance

Accountants' Liability

Wills, Trusts, and Elder Law

Family Law

International and World Trade Law

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