Question 1

Usually, a court will not award an equitable remedy unless the remedy at law is inadequate.

Accepted Answer

A) True 
 B)False  True

Question 2

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 in recovering damages, but not all of the damages that it seeks.
Everywhere Shipping’s failure to perform promptly is a breach of contract for which Complete Boring can recover damages. Because of Everywhere Shipping’s late delivery of the pump, Complete Boring is entitled to recover the cost of renting the pump for the five days that Everywhere Shipping delayed. Expenses that are caused directly by a breach of contract—such as the cost to rent the replacement pump after Everywhere Shipping breached the contract—are recoverable as compensatory damages. These expenses were foreseeable.
Consequential damages—damages caused by special circumstances beyond the contract—are recoverable only if the breaching party knew or should have known at the time of contracting of their possibility. In this problem, Complete Boring’s shutdown of its operations is a special circumstance, but Everywhere Shipping did not know of these circumstances so Complete Boring’s consequent loss of profits is not recoverable.
Also, Complete Boring cannot recover punitive damages, which are not usually recoverable in breach of contract suits. Punitive damages are intended to punish wrongdoing. The purpose of damages in a breach of contract suit is to place the nonbreaching party in the position he or she would have occupied if the contract had been performed, not to punish the breaching party.

Question 3

Handicrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week. When Handicrafts & Hobbies cancels the contract, Iliana spends $150 to obtain a similar job that pays $450 per week for a year. Iliana is entitled to recover

Accepted Answer

A)  ​the amount of the wages that Handicrafts & Hobbies promised only. 
B)  ​the difference between the wages at the two jobs only. 
C)  ​the difference between the wages at the two jobs plus $150. 
D)  ​$150 only. 
A)  ​the amount of the wages that Handicrafts & Hobbies promised only. 
B)  ​the difference between the wages at the two jobs only. 
C)  ​the difference between the wages at the two jobs plus $150. 
D)  ​$150 only. C

Question 4

Meatpackers, Inc., enters into a contract with Nevada Ranch for the delivery of a certain number of beef cattle on a set schedule. The ranch delays the first delivery for five days, aware that Meatpackers loses a certain percentage of profit each day. An award to Meatpackers of consequential damages would

Accepted Answer

A)  ​establish, as a matter of principle, that the seller acted wrongfully. 
B)  ​provide the buyer with funds for a foreseeable loss beyond the contract. 
C)  ​provide the buyer with funds for its loss of the bargain. 
D)  ​punish the seller and deter others from similar acts. 
A)  ​establish, as a matter of principle, that the seller acted wrongfully. 
B)  ​provide the buyer with funds for a foreseeable loss beyond the contract. 
C)  ​provide the buyer with funds for its loss of the bargain. 
D)  ​punish the seller and deter others from similar acts.

Question 5

A party seeking to recover compensatory damages can also recover incidental damages.

Accepted Answer

A) True 
 B)False

Question 6

In most situations, when a breach of contract occurs, the innocent injured party is held to a duty to mitigate the damages.​

Accepted Answer

A) True 
 B)False

Question 7

Damages that compensate the nonbreaching party for the loss of a bargain are known as consecutive damages.

Accepted Answer

A) True 
 B)False

Question 8

Specific performance will not be granted unless the party's legal remedy is inadequate.

Accepted Answer

A) True 
 B)False

Question 9

Fact Pattern 12-1
Andre enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery.
-Refer to Fact Pattern 12-1. If Andre breaches the contract, Belle Vista's remedy would most likely be

Accepted Answer

A)  ​the amount that Andre expected to invest in the project. 
B)  ​a percentage of Andre's unrealized profit. 
C)  ​the difference between the land's contract and market prices. 
D)  ​specific performance. 
A)  ​the amount that Andre expected to invest in the project. 
B)  ​a percentage of Andre's unrealized profit. 
C)  ​the difference between the land's contract and market prices. 
D)  ​specific performance.

Question 10

Ordinarily, the remedy for a seller's breach of a contract for a sale of real estate is damages.

Accepted Answer

A) True 
 B)False

Question 11

The standard measure of compensatory damages is the value of breaching party's promised performance.

Accepted Answer

A) True 
 B)False

Question 12

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that is excused by the provision.​

Accepted Answer

A) True 
 B)False

Question 13

Expenses that are caused directly by a breach of a contract are known as primary damages.

Accepted Answer

A) True 
 B)False

Question 14

Mother & Daughter Jewelers breaches its lease with Longview Mall and vacates the premises six months before the end of the term. In some states, Longview would have to

Accepted Answer

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

Question 15

Clay Pots pays Dora $25,000 to propose an online marketing campaign. Two days later, Dora tells Clay Pots that she has accepted a job with its competitor Earthenware Inc. and cannot plan the campaign. As compensatory damages, Clay Pots can recover

Accepted Answer

A)  ​$250,000. 
B)  ​$25,000. 
C)  ​$2,500. 
D)  ​$0. 
A)  ​$250,000. 
B)  ​$25,000. 
C)  ​$2,500. 
D)  ​$0.

Question 16

Restitution is limited to rescission cases.

Accepted Answer

A) True 
 B)False

Question 17

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

Accepted Answer

A) True 
 B)False

Question 18

​Rescission is an equitable remedy used when the parties have imperfectly expressed their agreement in writing.

Accepted Answer

A) True 
 B)False

Question 19

Leif contracts to sell his Micro Brewery & Pub to Naomi on April 1. On March 15, Leif tells Naomi that he will not go through with the deal. Naomi can recover

Accepted Answer

A)  ​the cost of any other property that Naomi would find suitable. 
B)  ​the cost of a similar, nearby brewery and pub. 
C)  ​the Micro Brewery & Pub. 
D)  ​nothing. 
A)  ​the cost of any other property that Naomi would find suitable. 
B)  ​the cost of a similar, nearby brewery and pub. 
C)  ​the Micro Brewery & Pub. 
D)  ​nothing.

Question 20

Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract

Accepted Answer

A)  ​Guido must return the $100 and Hal must return the bike. 
B)  ​Guido must return the $100 only. 
C)  ​Hal must return the bike only. 
D)  ​the parties can keep the "benefits" of their bargain. 
A)  ​Guido must return the $100 and Hal must return the bike. 
B)  ​Guido must return the $100 only. 
C)  ​Hal must return the bike only. 
D)  ​the parties can keep the "benefits" of their bargain.

Usually, a court will not award an equitable remedy unless the remedy at law is inadequate.

Handicrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week. When Handicrafts & Hobbies cancels the contract, Iliana spends $150 to obtain a similar job that pays $450 per week for a year. Iliana is entitled to recover

A party seeking to recover compensatory damages can also recover incidental damages.

In most situations, when a breach of contract occurs, the innocent injured party is held to a duty to mitigate the damages.

Damages that compensate the nonbreaching party for the loss of a bargain are known as consecutive damages.

Specific performance will not be granted unless the party's legal remedy is inadequate.

Fact Pattern 12-1 Andre enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. -Refer to Fact Pattern 12-1. If Andre breaches the contract, Belle Vista's remedy would most likely be

Ordinarily, the remedy for a seller's breach of a contract for a sale of real estate is damages.

The standard measure of compensatory damages is the value of breaching party's promised performance.

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that is excused by the provision.

Expenses that are caused directly by a breach of a contract are known as primary damages.

Mother & Daughter Jewelers breaches its lease with Longview Mall and vacates the premises six months before the end of the term. In some states, Longview would have to

Clay Pots pays Dora $25,000 to propose an online marketing campaign. Two days later, Dora tells Clay Pots that she has accepted a job with its competitor Earthenware Inc. and cannot plan the campaign. As compensatory damages, Clay Pots can recover

Restitution is limited to rescission cases.

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

Rescission is an equitable remedy used when the parties have imperfectly expressed their agreement in writing.

Leif contracts to sell his Micro Brewery & Pub to Naomi on April 1. On March 15, Leif tells Naomi that he will not go through with the deal. Naomi can recover

Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract

Law and Legal Reasoning

Business and the Constitution

Courts and Alternative Dispute Resolution

Tort Law

Criminal Law and Cyber Crime

Business Ethics

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration, Capacity, and Legality

Defenses to Contract Enforceability

Third Party Rights and Discharge

Intellectual Property Rights

Internet Law, Social Media, and Privacy

The Formation of Sales and Lease Contracts

Performance, Breach, and Warranties of Sales and Lease Contracts

Agency Relationships in Business

Small Businesses and Limited Liability Companies

Corporations

Filters

Exam 12: Breach of Contract and Remedies

Usually, a court will not award an equitable remedy unless the remedy at law is inadequate.

Handicrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week. When Handicrafts & Hobbies cancels the contract, Iliana spends $150 to obtain a similar job that pays $450 per week for a year. Iliana is entitled to recover

A party seeking to recover compensatory damages can also recover incidental damages.

In most situations, when a breach of contract occurs, the innocent injured party is held to a duty to mitigate the damages.​

Damages that compensate the nonbreaching party for the loss of a bargain are known as consecutive damages.

Specific performance will not be granted unless the party's legal remedy is inadequate.

Fact Pattern 12-1 Andre enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. -Refer to Fact Pattern 12-1. If Andre breaches the contract, Belle Vista's remedy would most likely be

Ordinarily, the remedy for a seller's breach of a contract for a sale of real estate is damages.

The standard measure of compensatory damages is the value of breaching party's promised performance.

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that is excused by the provision.​

Expenses that are caused directly by a breach of a contract are known as primary damages.

Mother & Daughter Jewelers breaches its lease with Longview Mall and vacates the premises six months before the end of the term. In some states, Longview would have to

Clay Pots pays Dora $25,000 to propose an online marketing campaign. Two days later, Dora tells Clay Pots that she has accepted a job with its competitor Earthenware Inc. and cannot plan the campaign. As compensatory damages, Clay Pots can recover

Restitution is limited to rescission cases.

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

​Rescission is an equitable remedy used when the parties have imperfectly expressed their agreement in writing.

Leif contracts to sell his Micro Brewery & Pub to Naomi on April 1. On March 15, Leif tells Naomi that he will not go through with the deal. Naomi can recover

Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract

Law and Legal Reasoning

Business and the Constitution

Courts and Alternative Dispute Resolution

Tort Law

Criminal Law and Cyber Crime

Business Ethics

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration, Capacity, and Legality

Defenses to Contract Enforceability

Third Party Rights and Discharge

Intellectual Property Rights

Internet Law, Social Media, and Privacy

The Formation of Sales and Lease Contracts

Performance, Breach, and Warranties of Sales and Lease Contracts

Agency Relationships in Business

Small Businesses and Limited Liability Companies

Corporations

Filters

In most situations, when a breach of contract occurs, the innocent injured party is held to a duty to mitigate the damages.

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that is excused by the provision.

Rescission is an equitable remedy used when the parties have imperfectly expressed their agreement in writing.