chapter 13 exam 3

Question 1

the relief provided to an innocent party when the other party has breached the contract

Answer 1

remedy

Question 2

there are four broad categories of damages:

Answer 2

1. compensatory
2. consequential
3. punitive
4. Nominal

Question 3

damages that compensate the nonbreaching party for the loss of the bargain are known as

Answer 3

compensatory damages

Question 4

all costs resulting from a breach of contract, including all reasonable expenses incurred because of the breach

Answer 4

incidental damages

Question 5

in contract for sales of goods, the usual measure of compensatory damages is the difference between

Answer 5

contract price and market price

Question 6

when a buyer breaches and the seller has not yet produced the goods, compensatory damages equal the sellers

Answer 6

lost profits on the sale

Question 6

if the owner breaches before construction has begun

Answer 6

profits (contract price less cost of materials and labor)

Question 7

owner breaches during construction then

Answer 7

profits, plus costs incurred up to time of breach

Question 8

owner breaches after construction is completed

Answer 8

the full price, plus interest

Question 9

contractor before construction has begun

Answer 9

the cost in excess of contract price to complete work

Question 10

contractor breaches before construction is completed

Answer 10

generally all the costs incurred by owner to complete

Question 11

foreseeable damages that result from a party’s breach of contract are called

Answer 11

consequential damages or special damages

Question 12

small monetary award granted to a plaintiff when no actual damage was suffered

Answer 12

nominal damages

Question 13

The requirement that a plaintiff do whatever is reasonable to minimize the damages caused by the defendant

Answer 13

mitigation of damages

Question 13

a person whose employment has been wrongfully terminated has a duty to mitigate damages incurred because of the employers breach of the employment contract

Answer 13

employment contracts

Question 14

if an acceptable tenant becomes available, the landlord is required to lease the premises to this tenant to mitigate the damages recoverable from the former tenant

Answer 14

rental agreements

Question 15

provision in a contract specifies that a certain dollar amount is to be paid in the event of a future default or breach of contract

Answer 15

liquidated damages provision in a contract

Question 16

an amount that the parties to the contract believe to be a reasonable estimation of the damages that will occur in the event of a breach

Answer 16

liquidated damages

Question 17

a certain amount to be paid in the event of a default or breach of contract and is designed to penalize the breaching party

Answer 17

a penalty

Question 18

to determine whether a particular provision is dor liquidated damages or a penalty, the court must answer two questions: at the time the contract was formed, was it apparent that damages would be difficult to estimate in the event of a breach? was the amount set as damages a reasonable estimate and not exessive?

Answer 18

if the answer to both are yes the provison will be enforced, if either is NO then provison will not be enforced

Question 19

an action to undo or cancel a contract- to return nonbreaching parties to the positions that they occupied prior to the transcation

Answer 19

rescission

Question 20

to rescind(cancel or take back) a contract, both parties generally must make _____ to each other by returning goods, property, or funds previously conveyed

Answer 20

restitution

Question 21

equitable remedy under which a person is restored to their original position prior to loss or injury, or placed in the position they wouldve been in had the breach not occured

Answer 21

restitution

Question 22

When a court tells the parties in a contract to do what they promised to do. This usually happens when just giving money as compensation isn’t enough to solve the problem.

Answer 22

specific performance

Question 23

a solution used when there are mistakes in a written agreement between parties. It lets a court change the contract to match what the parties actually meant or intended.

Answer 23

reformation

Question 24

courts order reformation most often when____ or _____mistake is present

Answer 24

fraud or mutual mistake

Question 25

remedies available to nonbreaching party (page 242-243)

Answer 25

damages, rescission and restitution, specific performance, reformation

Question 26

provisions stating that no damages can be recovered are called

Answer 26

exculpatory clauses

Question 27

provisions that affect the availability of certain remedies are called

Answer 27

limitation-of-liability clauses

Question 28

provides that remedies can be limited in a contract for the sales of goods

Answer 28

The uniform commercial code

Question 29

a provision excluding liability for fraudulent or intentional injury will….

Answer 29

not be enforced

Question 30

when an exculpatory clause(provision in a contract that aims to release or excuse a party from liability or responsibility for certain types of actions or events) for negligence is contained in a contract made between parties who have roughly equal bargaining positions….

Answer 30

the clause will be enforced