Chapter 17

Question 1

Damages to compensate for expenses directly incurred because of a breach of contract, such as those incurred to obtain performance form another source.

Answer 1

Incidental Damages

Question 2

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

Answer 2

Consequential Damages

Question 3

A small monetary award (often $1) granted to a plaintiff when no actual damage was suffered.

Answer 3

Nominal Damages

Question 4

The requirement that a plaintiff do whatever is reasonable to minimize the defendant’s breach of contract.

Answer 4

Mitigation of Damages

Question 5

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 5

Liquidated Damages

Question 6

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

Answer 6

Penalty

Question 7

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 in had the breach not occurred.

Answer 7

Restitution

Question 8

An equitable remedy in which a court orders the parties to perform as promised in the contract. This remedy normally is granted only when the legal remedy is inadequate.

Answer 8

Specific Performance