Question 1

Courts order reformation most often when fraud or mutual mistake is present.

Accepted Answer

A) True 
 B)False  True

Question 2

A party seeking to recover in quasi contract must show that he or she acted as a volunteer in conferring a benefit on another party.

Accepted Answer

A) True 
 B)False  False

Question 3

Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager for two years. If Rig breaches the contract, Scott has a duty to

Accepted Answer

A)  ​do nothing. 
B)  ​reduce the damages that Scott might otherwise suffer. 
C)  ​rescind the contract with Rig. 
D)  ​punish Rig and set an example to deter others from similar acts 
A)  ​do nothing. 
B)  ​reduce the damages that Scott might otherwise suffer. 
C)  ​rescind the contract with Rig. 
D)  ​punish Rig and set an example to deter others from similar acts B

Question 4

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 dam-ages. 
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 dam-ages. 
C)  ​relet the premises to recover any damages. 
D)  ​sell the premises to recover any damages.

Question 5

Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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 8

Porches & Verandas, Inc., agrees to build a screen porch for Quinn, but fails to complete the job. Quinn hires 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 9

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

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

Question 15

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 16

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 Meatpackers of consequential damages would

Accepted Answer

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

Question 17

Handcrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week. When Handcrafts & 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 Handcrafts & 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 Handcrafts & 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.

Question 18

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 19

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 20

Restitution is limited to rescission cases.

Accepted Answer

A) True 
 B)False

Exam 15: Breach and Remedies

Courts order reformation most often when fraud or mutual mistake is present.

A party seeking to recover in quasi contract must show that he or she acted as a volunteer in conferring a benefit on another party.

Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager for two years. If Rig breaches the contract, Scott has a duty to

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​

Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.

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

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

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

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

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

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.

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

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

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

Handcrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week. When Handcrafts & 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

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

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

Restitution is limited to rescission cases.

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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