Chapter 19 Book set

Question 1

A contract clause that excludes liability for willful misconduct is enforceable if the provision is sufficiently prominent in the body of the contract.

Answer 1

False

Question 2

Shi’s lease of retail premises from Thuy requires Shi to pay certain fees, subject to the landlord’s proof of the correct amount. Thuy overcharges Shi for the fees, without explanation. Most likely, the tenant can rescind the lease

Answer 2

with prompt notice

Question 3

Home Furnishing Store’s contract for a sale of its appliances provides that the only remedy for breach is replacement, repair, or refund of the purchase price. With respect to this provision, on a customer’s suit for breach, a court is most likely to

Answer 3

enforce it

Question 4

Dino hires Eve to perform at Dino’s Club, but Eve later breaches the agreement to accept a higher-paying job at Five Star Arena. Dino files a suit against Eve, asking the court to order her to perform at his club. The court will most likely

Answer 4

award damages to Dino

Question 5

Ziplines Inc. enters into a contract to employ Scot as a manager for two years. If Ziplines breaches the contract, Scot has a duty to

Answer 5

reduce the damages that Scot might otherwise suffer.

Question 6

Dory enters into a contract with Eton for the construction of a Fast Food franchise, according to a certain schedule. The parties perform some preparatory steps, but Eton materially and willfully fails to begin work on the specified date. To rescind the contract, Dory must show that the parties can

Answer 6

be restored to the status quo

Question 7

Bagels Bakery enters into a contract with Cineplex for discounted tickets for Bagels’s employees. When Cineplex does not provide the tickets, Bagels enters into a contract with DigiMovies for the same service at a lower price. In a suit for breach, Bagels might be awarded nominal damages to

Answer 7

establish, as a matter of principle, that Cineplex acted wrongfully

Question 8

Restore Inc. contracts to resurface the pools at Swim Park by June 1. Restore knows that if performance is not timely, Swim Park will have to delay its seasonal opening. Restore finishes the job June 15. In a suit for breach, Swim Park can recover

Answer 8

the loss of profit from the delayed opening

Question 9

The standard measure of compensatory damages is the value of the breaching party’s actual performance.

Answer 9

False

Question 10

The terms of a contract must be sufficiently definite for a court to determine the amount of damages to award.

Answer 10

True

Question 11

Bee is an employee of Credit Agency Inc. On the termination of Bee’s position, Credit pays Bee $10,000 to agree not to disclose the employer’s confidential information. Later, Bee sells the information to Debt Records LLC for $100,000. In a suit for breach, Credit is most likely to recover

Answer 11

$10,000 from Bee

Question 12

Max orally agrees to construct two outbuildings on Ned’s ranch for a stated price. Max performs, but Ned does not pay. To recover on a theory of quasi contract, Max must show that if Ned were allowed to retain the benefit of their bargain, Ned would

Answer 12

be unjustly enriched.

Question 13

Sometimes, when a buyer breaches a contract for a sale of goods and the seller has not yet produced the goods, the seller can recover the lost profits.

Answer 13

True

Question 14

Between parties in equal bargaining positions, a contract provision that states no damages can be recovered for certain types of breaches may be enforced.

Answer 14

True

Question 15

On an architect’s breach of contract after payment for the work, the owner can immediately hire a new architect and obtain restitution of the payment.

Answer 15

True

Question 16

Steel Mill Inc. agrees to deliver a certain quantity of steel to T-Bar Framing Corporation. The agreement states that delivery is to be within “9” days, although the parties intend “90” days. The seller cannot convince the buyer to amend the contract. The most appropriate remedy is most likely

Answer 16

reformation

Question 17

A contract between Speculative Investment Company and Trusts & Bonds Inc. excludes liability as a result of fraud. This exclusion is enforceable

Answer 17

under none of the choices
* if the parties have equal bargaining power
* because the parties are protected from liability
* because the parties consented to it

Question 18

Liquidated damages provisions normally are unenforceable.

Answer 18

False

Question 19

The remedy available when a court imposes a quasi contract is the recovery of the reasonable value of a benefit conferred or detriment suffered.

Answer 19

True

Question 20

Hera contracts to work exclusively for Island Tours LLC during July for $5,000. On June 30, Island cancels the contract. Hera finds a similar job for the month of July but earns only $3,000. Hera files a suit against Island. As compensatory damages, Hera can recover

Answer 20

$2,000

Question 21

Lyn orally contracts to sell five acres of timber to Mountain Mill LLC. The buyer harvests the trees but fails to remit the full price. Because of the lack of a written contract, Lyn could most likely recover on a theory of

Answer 21

quasi contract

Question 22

Sparkle Jewelers breaches its lease with Town Mall and vacates the premises six months before the end of the term. In some states, the mall would be required to

Answer 22

use reasonable means to find a new tenant

Question 23

Builders Inc. agrees to construct an office building for Commerce Center Corporation. The project proceeds according to plan, but before it is done, the buyer tells Builders to quit. In a suit for breach, Builders may recover

Answer 23

profits plus the costs incurred up to the time of the breach

Question 24

Faiz enters into a contract to buy 350 acres from Grain Farm to cultivate hops and open a brewery. Faiz fails to make the purchase. Grain Farm’s remedy is most likely

Answer 24

the difference between the contract and market prices of the land

Question 25

In most states, a person whose employment is wrongfully terminated has no duty to take a similar job if one is available.

Answer 25

False

Question 26

Concrete Company agrees to lay a foundation for Diamond Properties, but fails to finish the job. Diamond hires Earth Projects Inc. to complete the work. In a suit for breach, Diamond may recover from Concrete

Answer 26

the costs needed to complete construction

Question 27

In most situations, when a breach of contract occurs, the injured party is held to a duty to mitigate, or reduce, the damages that he or she suffers.

Answer 27

False

Question 28

Erma enters into a contract to buy a tract of lakefront property from Forest Acres to build and sell a residential development. Forest Acres fails to close the sale. Erma’s remedy is most likely

Answer 28

specific performance

Question 29

Metro Holdings Inc. contracts to sell a commercial parking garage to New Property LLC. The contract provides that if Metro does not close the deal by a certain date, it must pay the buyer one-half of the value of the property. This provision is not enforceable if it is

Answer 29

designed to penalize Metro

Question 30

Jet enters into a contract to buy a certain commercial building from Kim. At the closing, Kim refuses to transfer title. In a suit for breach, Jet should seek specific performance to

Answer 30

obtain the exact bargain promised in the contract.

Question 31

A liquidated damages provision specifies an amount to be paid in the event of a future default or breach of contract to make the innocent party whole.

Answer 31

True

Question 32

Guy orally agrees to buy a unique collection of sports memorabilia for $10,000 from Hec and sends $2,500 as an initial payment. When Guy pays the rest of the price, Hec refuses to ship the collection. In a suit for breach, Guy should seek

Answer 32

specific performance

Question 33

Special damages that compensate for a loss caused by circumstances beyond the contract itself are incidental damages.

Answer 33

False

Question 34

A contract clause that provides the only remedy for breach is repair, replacement, or refund of the purchase price is invalid and unenforceable.

Answer 34

False

Question 35

Berry Farm hires Chun to repair its irrigation system on site by a certain date for $2,500, but Chun fails to perform. Berry Farm hires Diego to do the job for $2,000. In a suit for breach, Berry Farm may recover from Chun

Answer 35

nominal damages

Question 36

Cow’s Milk LLC needs a certain part for its pasteurizing equipment to continue its operations and orders one for $3,000 from Dairy Supplies Inc. Cow’s Milk tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000. Dairy Supplies ships the part late. Cow’s Milk can recover

Answer 36

$10,000

Question 37

Expenses incurred because of a breach of contract to obtain performance from another source are not recoverable in a suit for breach.

Answer 37

False

Question 38

The breach of a contract for a sale of goods qualifies for specific performance only when substantially identical goods can be bought or sold in the market.

Answer 38

False

Question 39

A court will grant specific performance as a remedy only when the legal remedy is adequate.

Answer 39

False

Question 40

When a buyer breaches a contract for a sale of land, the seller can recover the difference between the contract price and the market price of the land.

Answer 40

True

Question 41

If the Statute of Frauds bars the enforcement of an oral contract, a court will not impose a quasi contract regardless of the other circumstances.

Answer 41

False

Question 42

City Nurses College loses its accreditation. As a consequence, City students can still obtain a state nurse’s license, but their earning capacity is impaired. In a suit against the school for breach, the students are most likely to recover

Answer 42

nothing.
* the cost of a City education, including tuition, and room and board.
* the difference between the tuition costs at City and an accredited school.
* the difference between their earning capacity before and after the loss

Question 43

When both an owner and a contractor breach a construction contract, a court will attempt to strike a fair balance in awarding damages.

Answer 43

True

Question 44

A seller cannot avoid the risk of liability for consequential damages by limiting the buyer’s remedies in their contract.

Answer 44

False

Question 45

Restitution may be available in a situation in which damages cannot be proved or are difficult to prove.

Answer 45

True

Question 46

When a breach is material and willful, an innocent party seeking to rescind it must show that the contracting parties cannot be restored to the status quo.

Answer 46

False

Question 47

A restrictive covenant imposed as part of a sale of an ongoing business will be enforced even if the restrictions are unreasonable.

Answer 47

False

Question 48

Repair Service enters into a contract to fix washing machines in Soapy Suds Company’s coin-operated laundries. Repair breaches the contract. Soapy is awarded compensatory damages. The purpose is to

Answer 48

provide Soapy with funds for its loss of the bargain