Question 1

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 2

Consequential damages are foreseeable damages that arise from a party's breach of a contract.

Accepted Answer

A) True 
 B)False

Question 3

Excavate n' Fill, Inc., enters into a contract with Fred to fill and landscape an abandoned quarry on Fred's land. Fred advances Excavate n' Fill 10 percent of its cost. The parties rescind the contract. Excavate n' Fill's refund of the payment is

Accepted Answer

A)  ​a penalty. 
B)  ​liquidated damages. 
C)  ​restitution. 
D)  reformation.​ 
A)  ​a penalty. 
B)  ​liquidated damages. 
C)  ​restitution. 
D)  reformation.​

Question 4

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 5

When a waiver of a breach of contract occurs, the party waiving the breach cannot take any later action on it.

Accepted Answer

A) True 
 B)False

Question 6

Nominal damages are awarded for the breach of a contract to nominate someone or something to a higher office, position, or category.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

Oxley contracts to buy a pizza oven from Restaurant Supplies Warehouse (RSW) for $2,500, but RSW fails to deliver. Oxley buys the appliance else-where for $3,500. Oxley's measure of damages is

Accepted Answer

A)  ​$1,000. 
B)  ​$1,000 plus incidental damages. 
C)  ​incidental damages only. 
D)  ​$0. 
A)  ​$1,000. 
B)  ​$1,000 plus incidental damages. 
C)  ​incidental damages only. 
D)  ​$0.

Question 10

River Vista Inc. enters into a contract with Stable Realty Management to manage and maintain River Vista's commercial real estate. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is

Accepted Answer

A)  ​a limitation-of-liability clause. 
B)  an exculpatory clause.​ 
C)  ​a liquidated damages clause. 
D)  ​a quasi contract. 
A)  ​a limitation-of-liability clause. 
B)  an exculpatory clause.​ 
C)  ​a liquidated damages clause. 
D)  ​a quasi contract.

Question 11

Forest Lumber Company orally contracts with Gail for the purchase of five acres of Gail's timberland. Gail makes the transfer but Forest Lumber does not pay the price. Gail could most likely recover on a theory of

Accepted Answer

A)  ​reformation. 
B)  ​restitution. 
C)  ​liquidated damages. 
D)  ​quasi contract. 
A)  ​reformation. 
B)  ​restitution. 
C)  ​liquidated damages. 
D)  ​quasi contract.

Question 12

Global Enterprise enters into a contract with HealthCare Insurance to obtain insurance for Global employees. HealthCare breaches the contract and Global is awarded compensatory damages. The purpose is to

Accepted Answer

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

Question 13

Isaac holds one ton of perishable fruit in storage for Juice Smoothies Corporation. Juice Smoothies does not pay for the storage. Isaac sells the fruit to Kayo Beverage Company. This sale represents

Accepted Answer

A)  ​a breach of contract. 
B)  ​a mitigation of damages. 
C)  ​liquidated damages. 
D)  ​a quasi contract. 
A)  ​a breach of contract. 
B)  ​a mitigation of damages. 
C)  ​liquidated damages. 
D)  ​a quasi contract.

Question 14

A contract may include a clause stating that damages will be limited to a maximum amount.

Accepted Answer

A) True 
 B)False

Question 15

Isabel orally agrees to buy a unique collection of nineteenth-century cowboy memorabilia for $10,000 from Jessie and sends $2,500 as a down payment. When Isabel pays the rest of the price, Jessie refuses to ship the collection. Isabel should seek

Accepted Answer

A)  ​damages. 
B)  ​restitution. 
C)  ​rescission. 
D)  ​specific performance. 
A)  ​damages. 
B)  ​restitution. 
C)  ​rescission. 
D)  ​specific performance.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The measure of compensatory damages often varies by type of contract.​

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Compensatory damages compensate a party injured by a breach of contract by punishing the party that breached the contract.

Accepted Answer

A) True 
 B)False

Question 20

In a contract for a sale of goods, the usual measure of compensatory damages is the difference between the retail price and the wholesale price.

Accepted Answer

A) True 
 B)False

Exam 19: Breach of Contract and Remedies

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

Consequential damages are foreseeable damages that arise from a party's breach of a contract.

Excavate n' Fill, Inc., enters into a contract with Fred to fill and landscape an abandoned quarry on Fred's land. Fred advances Excavate n' Fill 10 percent of its cost. The parties rescind the contract. Excavate n' Fill's refund of the payment is

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

When a waiver of a breach of contract occurs, the party waiving the breach cannot take any later action on it.

Nominal damages are awarded for the breach of a contract to nominate someone or something to a higher office, position, or category.

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

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

Oxley contracts to buy a pizza oven from Restaurant Supplies Warehouse (RSW) for $2,500, but RSW fails to deliver. Oxley buys the appliance else-where for $3,500. Oxley's measure of damages is

River Vista Inc. enters into a contract with Stable Realty Management to manage and maintain River Vista's commercial real estate. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is

Forest Lumber Company orally contracts with Gail for the purchase of five acres of Gail's timberland. Gail makes the transfer but Forest Lumber does not pay the price. Gail could most likely recover on a theory of

Global Enterprise enters into a contract with HealthCare Insurance to obtain insurance for Global employees. HealthCare breaches the contract and Global is awarded compensatory damages. The purpose is to

Isaac holds one ton of perishable fruit in storage for Juice Smoothies Corporation. Juice Smoothies does not pay for the storage. Isaac sells the fruit to Kayo Beverage Company. This sale represents

A contract may include a clause stating that damages will be limited to a maximum amount.

Isabel orally agrees to buy a unique collection of nineteenth-century cowboy memorabilia for $10,000 from Jessie and sends $2,500 as a down payment. When Isabel pays the rest of the price, Jessie refuses to ship the collection. Isabel should seek

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

The measure of compensatory damages often varies by type of contract.​

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

Compensatory damages compensate a party injured by a breach of contract by punishing the party that breached the contract.

In a contract for a sale of goods, the usual measure of compensatory damages is the difference between the retail price and the wholesale price.

Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Business and the Constitution

Business Ethics

Tort Law

Strict Liability and Product Liability

Intellectual Property Rights

Internet Law, Social Media, and Privacy

Criminal Law and Cyber Crime

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

The Writing Requirement in Our Digital World

Third Party Rights

Performance and Discharge

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance and Breach of Sales and Lease Contracts

Warranties

International and Space Law

Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Banking in the Digital Age

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Agency Liability and Termination

Employment, Immigration, and Labor Law

Employment Discrimination

Small Businesses and Franchises

All Forms of Partnerships

Limited Liability Companies and Special Business Forms

Corporate Formation and Financing

Corporate Directors, Officers, and Shareholders

Mergers and Takeovers

Investor Protection, Insider Trading, and Corporate Governance

Administrative Agencies

Consumer Law

Environmental Protection

Antitrust Law

Professional Liability and Accountability

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Insurance

Wills and Trusts

The Legal Environment of Business

Torts and Crimes

Contracts and E-Contracts

Domestic and International Sales and Lease Contracts

Negotiable Instruments

Creditors Rights and Bankruptcy

Agency and Employment

Business Organizations

Government Regulation

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

The measure of compensatory damages often varies by type of contract.