Question 1

The duty owed under the mitigation of damages doctrine depends on the nature of the contract.

Accepted Answer

A) True 
 B)False  True

Question 2

Specific performance is the remedy customarily used when one party has breached a contract for the sale of goods.

Accepted Answer

A) True 
 B)False  False

Question 3

Most parties settle their lawsuits for damages or other remedies prior to trial.

Accepted Answer

A) True 
 B)False  True

Question 4

A person's actions may cause a breach of contract or a tort,but not both.

Accepted Answer

A) True 
 B)False

Question 5

The four broad types of damages in contract law are conciliatory,consecutive,punctual,and nominative.

Accepted Answer

A) True 
 B)False

Question 6

Owen buys a used Prius from Quality Motors,Inc. ,paying $1,000 down and agreeing to pay off the balance in thirty-six monthly payments of $200 each.The terms of the agreement call for Owen to make a payment on or before the first of each month,beginning March 1.During the first six months,Quality receives a $200 payment before the first of each month.Starting in September,however,and continuing for the subsequent five months,Owen's payment is never made until the fifth of the month.Quality accepts and cashes the payment check each time.Before the next payment is due,Quality decides that it is no longer willing to accept late payments.Can Quality sue Owen immediately for breach? Can Owen continue to make late payments without liability? Explain.

Accepted Answer

The answer of Owen buys a used Prius from Quality...

Question 7

A penalty provision specifies a certain amount to be paid in the event of a default or breach of contract.

Accepted Answer

A) True 
 B)False

Question 8

Development Associates (DA)agrees to buy five acres of land from Eastside Properties for $15,000.Eastside fails to go through with the deal on the agreed date,when the market price of the land is $17,000.DA may recover

Accepted Answer

A)  $17,000.
B)  $15,000.
C)  $2,000.
D)  $0.

Question 9

Lester and Myrtle want to rescind their contract under which Lester sold an MP3 player for $40.To rescind the contract

Accepted Answer

A)  Lester must return the $40 and Myrtle must return the player.
B)  Lester must return the $40 only.
C)  Myrtle must return the player only.
D)  the parties can keep the "benefits" of their bargain.

Question 10

Refined Commodities,Inc. ,agrees to deliver ten tons of sheet metal to Select Builders Corporation.The agreement states that delivery is to be within "3" days,although the parties intend "30" days.Refined cannot convince Select to amend the contract.Refined should seek

Accepted Answer

A)  damages.
B)  reformation.
C)  rescission.
D)  specific performance.

Question 11

National Drilling Company ships its only pump to American Hydraulics Corporation,the manufacturer,for repair.National hires Overland Transport,Inc. ,to take the pump to American Hydraulics and to return it to National as soon as the repair is complete.National is forced to sus?pend operations without a pump,but Overland does not know this.National 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,National rents a pump at a cost of $100 per day.Overland delays five more days before returning the pump.National files a suit against Overland,asking for compensatory,consequential,and punitive damages.Will National recover?

Accepted Answer

The answer of National Drilling Company ships its only pump...

Question 12

A contract may include a clause stating that no damages can be recovered for a certain type of breach.

Accepted Answer

A) True 
 B)False

Question 13

Punitive damages are recoverable in contract law for an intentional breach of contract.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Consumer Credit Union pays Derby $10,000 to design an ad campaign.The next day,Derby tells the credit union that he has accepted a job in Boston and cannot design the campaign.As compensatory damages,the credit union can recover

Accepted Answer

A)  $100,000.
B)  $10,000.
C)  $1,000.
D)  $0.

Question 16

A party who knowingly accepts defective performance of a contract waives the breach.

Accepted Answer

A) True 
 B)False

Question 17

Fidelio Corporation enters into a contract with Equi Insurance,Inc. ,to obtain health insurance for Fidelio employees.Equi breaches the contract.If Fidelio is awarded compensatory damages,the purpose would be to

Accepted Answer

A)  establish,as a matter of principle,that Equi acted wrongfully.
B)  provide Fidelio with funds for a foreseeable loss beyond the contract.
C)  provide Fidelio with funds for its loss of the bargain.
D)  punish Equi and set an example to deter others from similar acts.

Question 18

Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term.In some states,Sunny would have to

Accepted Answer

A)  avoid reletting the premises to recover damages from Ray.
B)  make reasonable efforts to relet the premises to mitigate dam?ages.
C)  relet the premises to recover damages from Ray.
D)  sell the premises to recover damages from Ray.

Question 19

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 20

To avoid liability for intentional injuries,Northwest Power Corporation in?cludes in its contracts an exculpatory clause.This is

Accepted Answer

A)  enforceable if the other parties are protected from liability.
B)  enforceable if the other parties consent to it.
C)  enforceable if the other parties have equal bargaining power.
D)  not enforceable.

Exam 18: A: Breach of Contract and Remedies

The duty owed under the mitigation of damages doctrine depends on the nature of the contract.

Specific performance is the remedy customarily used when one party has breached a contract for the sale of goods.

Most parties settle their lawsuits for damages or other remedies prior to trial.

A person's actions may cause a breach of contract or a tort,but not both.

The four broad types of damages in contract law are conciliatory,consecutive,punctual,and nominative.

A penalty provision specifies a certain amount to be paid in the event of a default or breach of contract.

Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000.Eastside fails to go through with the deal on the agreed date,when the market price of the land is $17,000.DA may recover

Lester and Myrtle want to rescind their contract under which Lester sold an MP3 player for $40.To rescind the contract

Refined Commodities,Inc. ,agrees to deliver ten tons of sheet metal to Select Builders Corporation.The agreement states that delivery is to be within "3" days,although the parties intend "30" days.Refined cannot convince Select to amend the contract.Refined should seek

A contract may include a clause stating that no damages can be recovered for a certain type of breach.

Punitive damages are recoverable in contract law for an intentional breach of contract.

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

Consumer Credit Union pays Derby $10,000 to design an ad campaign.The next day,Derby tells the credit union that he has accepted a job in Boston and cannot design the campaign.As compensatory damages,the credit union can recover

A party who knowingly accepts defective performance of a contract waives the breach.

Fidelio Corporation enters into a contract with Equi Insurance,Inc. ,to obtain health insurance for Fidelio employees.Equi breaches the contract.If Fidelio is awarded compensatory damages,the purpose would be to

Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term.In some states,Sunny would have to

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

To avoid liability for intentional injuries,Northwest Power Corporation in?cludes in its contracts an exculpatory clause.This is