Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) $13,000. 
B) $10,000. 
C) $3,000. 
D) $0. 
A) $13,000. 
B) $10,000. 
C) $3,000. 
D) $0.

Question 3

Nogales Ceramics pays Omar $15,000 to propose an online marketing campaign. Two days later,Omar tells Nogales that he has accepted a job in Silicon Valley and cannot plan the campaign. As compensatory damages,Nogales can recover

Accepted Answer

A) $150,000. 
B) $15,000. 
C) $1,500. 
D) $0. 
A) $150,000. 
B) $15,000. 
C) $1,500. 
D) $0.

Question 4

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

Accepted Answer

A) $3,000. 
B) $2,000. 
C) $1,000. 
D) $0. 
A) $3,000. 
B) $2,000. 
C) $1,000. 
D) $0.

Question 5

Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500,but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2,000. Dry Gulch may recover from Elliot

Accepted Answer

A) nothing. 
B) compensatory damages. 
C) consequential damages. 
D) nominal damages. 
A) nothing. 
B) compensatory damages. 
C) consequential damages. 
D) nominal damages.

Question 6

A party seeking to recover in quasi contract must show that the other party has been unjustly enriched.

Accepted Answer

A) True 
 B)False

Question 7

Builders,Inc.,agrees to construct an office building for Champion Fitness Clubs,Inc. The project proceeds according to plan,but before it is done,Champion tells Buildersto quit. Buildersmay recover

Accepted Answer

A) the contract price less costs of materials and labor. 
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) the contract price less costs of materials and labor. 
B) the contract price. 
C) the costs needed to complete construction. 
D) profits plus the costs incurred up to the time of the breach.

Question 8

Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery.
-Refer to Fact Pattern 17-1. If Belle Vista breaches the contract,Ambrose's remedy would most likely be

Accepted Answer

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

Question 9

Metro Facilities,Inc.,contracts to sell a parking lot to Nouveau Property Company. The contract provides that if Metro does not close the deal by September 15,it must pay Nouveau one-half of the contract price. This provision is not enforceable because it is

Accepted Answer

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

Question 10

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

Question 11

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' Fill10 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 12

Liquidated damages provisions usually are enforceable.

Accepted Answer

A) True 
 B)False

Question 13

Reformation is an equitable remedy that allows a court to rewrite a contract to suit itself.

Accepted Answer

A) True 
 B)False

Question 14

A liquidated damages provision specifies that a certain amount is to be paid on a breach of contract when the nonbreaching party elects to receive cash.

Accepted Answer

A) True 
 B)False

Question 15

Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery.
-Refer to Fact Pattern 17-1. If Ambrose breaches the contract,Belle Vista's remedy would most likely be

Accepted Answer

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

Question 16

Porches & Verandas,Inc.,agrees to build a screen porch for Quinn,but fails to complete the job. Quinnhires Ramadas,Inc.,to finish the project. Quinn may recover from Porches & Verandas

Accepted Answer

A) the contract price less costs of materials and labor. 
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) the contract price less costs of materials and labor. 
B) the contract price. 
C) the costs needed to complete construction. 
D) profits plus the costs incurred up to the time of the breach.

Question 17

The most common remedies available to a nonbreaching party include damages,rescission and restitution,and specific performance.

Accepted Answer

A) True 
 B)False

Question 18

Ready Repair Service enters into a contract to fix washers and dryers in Scrub n' Dry Company's coin-operated laundries. If Ready Repair breaches the contract,Scrub n' Dry can

Accepted Answer

A) do nothing but make a deal with a different service provider. 
B) do nothing but temporarily suspend operations and wait. 
C) file a criminal complaint against Ready Repair. 
D) sue Ready Repair for damages. 
A) do nothing but make a deal with a different service provider. 
B) do nothing but temporarily suspend operations and wait. 
C) file a criminal complaint against Ready Repair. 
D) sue Ready Repair for damages.

Question 19

A contract for a sale of land from Bayside Properties,Inc.,to City Development Corporation contains an erroneous legal description. The most appropriate remedy for these parties is

Accepted Answer

A) a quasi contract. 
B) reformation. 
C) rescission. 
D) specific performance. 
A) a quasi contract. 
B) reformation. 
C) rescission. 
D) specific performance.

Question 20

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

Accepted Answer

A) establish,as a matter of principle,that Nemiah's acted wrongfully. 
B) provide Meatpackerswith funds for a foreseeable loss beyond the contract. 
C) provide Meatpackerswith funds for its loss of the bargain. 
D) punish Nemiah's and deter other suppliers from similar acts. 
A) establish,as a matter of principle,that Nemiah's acted wrongfully. 
B) provide Meatpackerswith funds for a foreseeable loss beyond the contract. 
C) provide Meatpackerswith funds for its loss of the bargain. 
D) punish Nemiah's and deter other suppliers from similar acts.

Exam 17: Breach and Remedies

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

Nogales Ceramics pays Omar $15,000 to propose an online marketing campaign. Two days later,Omar tells Nogales that he has accepted a job in Silicon Valley and cannot plan the campaign. As compensatory damages,Nogales can recover

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

Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500,but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2,000. Dry Gulch may recover from Elliot

A party seeking to recover in quasi contract must show that the other party has been unjustly enriched.

Builders,Inc.,agrees to construct an office building for Champion Fitness Clubs,Inc. The project proceeds according to plan,but before it is done,Champion tells Buildersto quit. Buildersmay recover

Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. -Refer to Fact Pattern 17-1. If Belle Vista breaches the contract,Ambrose's remedy would most likely be

Metro Facilities,Inc.,contracts to sell a parking lot to Nouveau Property Company. The contract provides that if Metro does not close the deal by September 15,it must pay Nouveau one-half of the contract price. This provision is not enforceable because it is

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.

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' Fill10 percent of its cost. The parties rescind the contract. Excavate n' Fill's refund of the payment is

Liquidated damages provisions usually are enforceable.

Reformation is an equitable remedy that allows a court to rewrite a contract to suit itself.

A liquidated damages provision specifies that a certain amount is to be paid on a breach of contract when the nonbreaching party elects to receive cash.

Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. -Refer to Fact Pattern 17-1. If Ambrose breaches the contract,Belle Vista's remedy would most likely be

Porches & Verandas,Inc.,agrees to build a screen porch for Quinn,but fails to complete the job. Quinnhires Ramadas,Inc.,to finish the project. Quinn may recover from Porches & Verandas

The most common remedies available to a nonbreaching party include damages,rescission and restitution,and specific performance.

Ready Repair Service enters into a contract to fix washers and dryers in Scrub n' Dry Company's coin-operated laundries. If Ready Repair breaches the contract,Scrub n' Dry can

A contract for a sale of land from Bayside Properties,Inc.,to City Development Corporation contains an erroneous legal description. The most appropriate remedy for these parties is

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