Question 1

In order for a liquidated damages clause in a contract to be upheld,the actual damages must be difficult or impracticable to determine.

Accepted Answer

A) True 
 B)False

Question 2

Alice has a contract with a surgeon to have a medical procedure performed on July 17.The surgeon notifies Alice on July 5 that he is in the Bahamas and will be there until the end of August and will not be able to do the surgery.Which of the following is true at this point?

Accepted Answer

A)  There will be no breach until July 17. 
B)  Alice must wait until July 17, and if the surgeon does not perform the procedure, Alice can contract with another surgeon. 
C)  If Alice contracts with another surgeon prior to July 17, and this second surgeon is aware of Alice's original contract, the second surgeon has no obligation to perform. 
D)  Alice is free to contract with another surgeon. 
E)  Alice must give the surgeon 90 days within which to schedule the surgery after July 17.

Question 3

Tender of performance is another term for completion of performance.

Accepted Answer

A) True 
 B)False

Question 4

A contract that has been fully performed by all parties is said to be:

Accepted Answer

A)  executed. 
B)  tendered. 
C)  mitigated. 
D)  liquidated. 
E)  substantiated.

Question 5

Rescission is available for a contract involving fraud.

Accepted Answer

A) True 
 B)False

Question 6

Several types of monetary damages are recoverable in a breach of contract action,including conciliatory,exponential,liquidated,and nominal damages.

Accepted Answer

A) True 
 B)False

Question 7

When an employer breaches an employment contract,what obligation does the employee have in seeking substitute employment?

Accepted Answer

A)  Because it was the employer who breached, the employee has no obligation to seek substitute employment. 
B)  The employee must accept any employment available with the same employer, but is not required to accept any substitute employment with a different employer. 
C)  The employee must accept any employment available with a different employer, but is not required to accept any substitute employment with the same employer. 
D)  The employee is obligated to accept any employment for which the employee is qualified. 
E)  The employee is obligated to accept substitute employment, but only if it is comparable employment.

Question 8

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)  nominal damages 
E)  the amount determined by the court to have been a fair profit on the contract

Question 9

If a liquidated damages clause is found to be a penalty,the non-breaching party may then recover actual damages.

Accepted Answer

A) True 
 B)False

Question 10

The general requirements for a liquidated damages clause to be enforceable are that:

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.

Question 11

A writ of garnishment orders the sheriff to seize property in the possession of the breaching party and sell the property at auction to satisfy the judgment.

Accepted Answer

A) True 
 B)False

Question 12

When an employer breaches an employment contract,if the employer offers substitute,non-comparable employment to the employee,the doctrine of mitigation places a duty on the employee to accept the work so long as the employee is capable of doing the work.

Accepted Answer

A) True 
 B)False

Question 13

When a court orders specific performance,it:

Accepted Answer

A)  orders monetary damages to be paid by the breaching party to the non-breaching party. 
B)  modifies the contract terms in order to maximize the fairness to both parties. 
C)  orders a party to a contract to do exactly what was called for in the contract. 
D)  orders a party to return any and all consideration received. 
E)  orders restitution.

Question 14

Henry took his Porsche to the shop for repairs,but it was not ready on Friday afternoon as had been agreed to.Henry was then unable to rent the car to his sister on Saturday for $400 to use in her wedding.Henry paid $60 to rent a car on Sunday for a trip to the mountains.The car repair shop knew about neither of Henry's planned uses of the car that weekend.Which of the following statements is true?

Accepted Answer

A)  Henry can collect for neither amount, because the car repair shop was unaware of them. 
B)  Henry can collect for both amounts, because the shop was the cause of his losses. 
C)  Henry can collect for the car rental, but not for the money his sister would have paid. 
D)  Henry can collect for both amounts and will likely recover punitive damages as well. 
E)  Henry can collect nothing, because his greediness with his sister is against public policy.

Question 15

The term monetary damages refers to an award of money.

Accepted Answer

A) True 
 B)False

Question 16

If a builder breaches a construction contract either before or during construction,the owner can recover the increased cost above the contract price that he or she has to pay to have the work completed by another contractor.

Accepted Answer

A) True 
 B)False

Question 17

Nominal damages are usually awarded in a moderate amount well within the jurisdiction of a small claims court,such as $1,000.

Accepted Answer

A) True 
 B)False

Question 18

What is required in order for a court to issue an injunction?

Accepted Answer

A)  any breach of contract 
B)  any breach of contract that causes injury to the other party 
C)  any situation that justifies the award of specific performance 
D)  a showing that the party requesting the injunction would suffer irreparable injury without the injunction 
E)  proof that the party requesting the injunction would win any breach of contract lawsuit

Question 19

A material breach of a contract occurs when a party renders inferior performance of his or her contractual obligations that impairs or destroys the essence of the contract.

Accepted Answer

A) True 
 B)False

Question 20

Compensatory damages for a breach of a sales contract involving goods are governed by the Uniform Commercial Code (UCC).

Accepted Answer

A) True 
 B)False

Exam 14: Breach of Contract and Remedies

In order for a liquidated damages clause in a contract to be upheld,the actual damages must be difficult or impracticable to determine.

Alice has a contract with a surgeon to have a medical procedure performed on July 17.The surgeon notifies Alice on July 5 that he is in the Bahamas and will be there until the end of August and will not be able to do the surgery.Which of the following is true at this point?

Tender of performance is another term for completion of performance.

A contract that has been fully performed by all parties is said to be:

Rescission is available for a contract involving fraud.

Several types of monetary damages are recoverable in a breach of contract action,including conciliatory,exponential,liquidated,and nominal damages.

When an employer breaches an employment contract,what obligation does the employee have in seeking substitute employment?

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

If a liquidated damages clause is found to be a penalty,the non-breaching party may then recover actual damages.

The general requirements for a liquidated damages clause to be enforceable are that:

A writ of garnishment orders the sheriff to seize property in the possession of the breaching party and sell the property at auction to satisfy the judgment.

When an employer breaches an employment contract,if the employer offers substitute,non-comparable employment to the employee,the doctrine of mitigation places a duty on the employee to accept the work so long as the employee is capable of doing the work.

When a court orders specific performance,it:

The term monetary damages refers to an award of money.

If a builder breaches a construction contract either before or during construction,the owner can recover the increased cost above the contract price that he or she has to pay to have the work completed by another contractor.

Nominal damages are usually awarded in a moderate amount well within the jurisdiction of a small claims court,such as $1,000.

What is required in order for a court to issue an injunction?

A material breach of a contract occurs when a party renders inferior performance of his or her contractual obligations that impairs or destroys the essence of the contract.

Compensatory damages for a breach of a sales contract involving goods are governed by the Uniform Commercial Code (UCC).