Chapter 14: Breach and Remedies

Question 1

What are the types of Damages?

Answer 1

Compensatory
Consequential
Punitive
Nominal

Question 2

Covers direct losses and costs

Answer 2

Compensatory Damges

Question 3

Damages that compensate the nonbreaching party for the loss of the bargain

Answer 3

Compensatory Damages

Question 4

Only for damages actually sustained and proved to have arisen directly from the loss of the bargain caused by the breach of contract

Answer 4

Compensatory Damages

Question 5

Replaces what was lost

Answer 5

Compensatory Damages

Question 6

Damages that compensate for expenses directly because of a breach of contract

Answer 6

Incidental Damages

Question 7

Usual measurement of the damages of sale of goods is the difference between

Answer 7

Contract price and the Market Price

Question 8

The remedy for sale of land is

Answer 8

Specific Performance

Question 9

The measure of damages of sale of land is the difference between the

Answer 9

Contract Price and Market Price

Question 10

When a contractor breaches the construction contract, the measure of damages is

Answer 10

Cost of completion

Reasonable compensation for any delay in performance

Question 11

When a contractor finishes construction late, the measure of damages is

Answer 11

Loss of use

Question 12

Covers indirect and foreseeable losses

Answer 12

Consequential Damages

Question 13

Special Damages

Answer 13

Consequential Damages

Question 14

Foreseeable damages that result from a party’s breach of contract but are caused by special circumstances beyond the contract itself

Answer 14

Consequential Damages

Question 15

Punishes and deters wrongdoing

Answer 15

Punitive Damages

Question 16

Generally not awarded in an action for breach of contract

Answer 16

Punitive Damages

Question 17

Recognizes wrongdoing when no monetary loss is shown

Answer 17

Nominal Damages

Question 18

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

Answer 18

Nominal Damages

Question 19

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

Answer 19

Mitigation of Damages

Question 20

Required action in mitigation of damages depends on what?

Answer 20

The nature of the situation

Question 21

A person whose employment has been wrongfully terminated has a duty to mitigate damages incurred because of the employer’s

Answer 21

Breach of the employment contract

Question 22

An amount stipulated in a contract, 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 22

Liquidated Damages

Question 23

A contract clause that specifies a certain amount to be paid in the event of a default or breach of contract but is unenforceable because it is designed to punish the breaching party rather than provide a reasonable estimate of damages

Answer 23

Penalty

Question 24

What questions are asked to determine enforceability?

Answer 24

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 excessive?
(Yes to both = enforced. No to either = unenforced)

Question 25

To undo, or cancel, a contract

Answer 25

Rescission

Question 26

An equitable remedy under which a person is restored to his or her original position prior to loss or injury, or placed in the position he or she would have been had the breach not occurred

Answer 26

Restitution

Question 27

Calls for the performance of the act promised in the contract

Answer 27

Specific Performance

Question 28

An equitable remedy in which a court orders the parties to perform as promised in the contract

Answer 28

Specific Performance

Question 29

Normally granted only when the legal remedy is inadequate

Answer 29

Specific Performance

Question 30

When specific performance is unavailable, what will be awarded instead

Answer 30

Damages

Question 31

An equitable remedy used when the parties have imperfectly expressed their agreement in writing

Answer 31

Reformation

Question 32

Courts order reformation most often when this is present

Answer 32

Fraud or Mutual Mistake

Question 33

When will Reformation be ordered?

Answer 33

Fraud or mutual Mistake
Written contract incorrectly states the parties’ oral agreement
Covenants not to compete are unreasonable

Question 34

A quasi contract is used to prevent what?

Answer 34

Unjust Enrichment

Question 35

What are the requirements of Quasi Contract

Answer 35

Party conferred a benefit on the other party
Party conferred the benefit with the reasonable expectation of being paid
Party did not act as a volunteer in conferring the benefit
Party receiving the benefit would be unjustly enriched if allowed to retain the benefit without paying for it

Question 36

Provisions stating that no damages can be recovered

Answer 36

Exculpatory Clauses

Question 37

Provisions that affect the availability of certain remedies

Answer 37

Limitation of Liability Clauses

Question 38

Limitation of Liability Clauses depends on the type of breach that is

Answer 38

Excused by the provision

Question 39

A provision excluding liability for fraudulent or intentional injury _________ be enforced

Answer 39

Will Not

Question 40

A clause excluding liability for illegal acts or violations of law _______ be enforced

Answer 40

Will Not

Question 41

A clause excluding liability for negligence ______ enforced

Answer 41

May be