BLTS-10 e Practice Quiz

Chapter 14: Breach and Remedies

1. Which of the following is not an equitable remedy?

a. Rescission and restitution.

b. Money damages.

c. Specific performance.

d. Reformation.

ANS:

a. Incorrect. This is an equitable remedy.

b. Correct. This is a remedy at law, not an equitable remedy.

c. Incorrect. This is an equitable remedy.

d. Incorrect. This is an equitable remedy.

2. When a party to a contract breaches the contract, the other party is legally entitled to:

a. An apology.

b. Nothing, because breaches are legally permissible and have no consequences.

c. Money damages.

d. Prosecute the breaching party for a criminal violation.

ANS:

a. Incorrect. Morality may require an apology in this situation, but the law does not.

b. Incorrect. The nonbreaching party is entitled to money damages.

c. Correct. Because the nonbreaching party has been harmed, he or she is entitled to money damages.

d. Incorrect. Breach of contract is a civil violation, not a criminal violation.

3. When the remedy of specific performance is not possible, what is the measure of damages in a case involving the sale of land?

a. The foreseeable damages that result.

b. The degree to which the defendant must be punished.

c. Some small amount that acknowledges a technical injury.

d. The market price of the land.

ANS:

a. Incorrect. Foreseeable damages would be consequential damages.

b. Incorrect. Punitive damages are not usually awarded under contract law.

c. Incorrect. A small amount acknowledging a technical injury would be nominal damages.

d. Correct. The market price of the land would be the measure of the compensatory damages in this case.

4. Consequential damages are:

a. damages in a very small amount, usually $1, to show that the plaintiff did suffer a legal harm.

b. special, foreseeable damages that compensate for a loss that does not directly or immediately result from a breach of contract.

c. damages that compensate a party for actual losses.

d. damages that punish a breaching party.

ANS:

a. Incorrect. These are nominal, not consequential, damages.

b. Correct. Such special damages are called consequential damages.

c. Incorrect. These are compensatory damages.

d. Incorrect. These are punitive damages.

5. As a general rule, punitive damages:

a. are not awarded in a breach of contract case.

b. are often awarded in construction cases.

c. are always available to plaintiffs who are minors.

d. are available to award an innocent party when a technical injury with no actual damages occurs.

ANS:

a. Correct. Because the purpose of punitive damages is to punish a wrongdoer, they are typically not available in contract cases.

b. Incorrect. This form of damages is generally not available.

c. Incorrect. Even for minors, this form of damages is generally not available.

d. Incorrect. This describes nominal, not punitive, damages.

6. If Valerie contracts with Bill to build a stone wall on his property and Valerie breaches the contract, Bill is under a legal obligation to:

a. wait until Valerie is ready to build the stone wall.

b. mitigate his damages.

c. do nothing, because he is the innocent party and thus has no legal duties.

d. absorb all of the costs associated with Valerie's breach.

ANS:

a. Incorrect. As a general rule, Bill does not have to wait for Valerie to perform; he may find another contractor to build the stone wall.

b. Correct. Bill has a legal duty to mitigate, or lessen, the damages he suffers as a result of Valerie's breach.

c. Incorrect. Bill cannot just sit by and do nothing. He must take reasonable steps to lessen the harms he suffers.

d. Incorrect. Bill does not have to absorb all the costs associated with Valerie’s breach--she is responsible for many of these costs.

7. Liquidated damages may be defined as:

a. damages to compensate a small technical harm.

b. an unspecified dollar amount payable in case of breach of contract.

c. a punishment for a default on a contractual term.

d. a specific dollar amount to be paid in the event of a future default or breach of contract.

ANS:

a. Incorrect. This would be nominal damages.

b. Incorrect. Liquidated damages involve a specific dollar amount.

c. Incorrect. This kind of punishment is a penalty, not liquidated damages.

d. Correct. Liquidated damages involve a specific dollar amount to be paid in the event of a future default or breach.

8. Suppose that Jennifer agrees to tutor Sal’s children during the summer. After one week, Jennifer decides that she can’t handle the children and refuses to tutor them any longer. If Sal sues Jennifer for specific performance, a court would likely:

a. refuse to order specific performance of the contract because it is a contract for personal services.

b. grant Sal’s request, because Jennifer breached her contract.

c. grant Sal’s request, but only if Sal could not find another tutor.

d. require Jennifer to mitigate her damages.

ANS:

a. Correct. Courts refuse to enforce such contracts because to do so amounts to a type of involuntary servitude, which is contrary to the public policy expressed in the Thirteenth Amendment to the Constitution.

b. Incorrect. Courts refuse to enforce such contracts because to do so amounts to a type of involuntary servitude, which is contrary to the public policy expressed in the Thirteenth Amendment to the Constitution.

c. Incorrect. Even in this situation, a court would refuse to enforce the contract because to do so amounts to a type of involuntary servitude, which is contrary to the public policy expressed in the Thirteenth Amendment to the Constitution.

d. Incorrect. Sal has requested the equitable remedy of specific performance, not damages.

9. A provision in a contract stating that no damages may be recovered is called:

a. A contributory clause.

b. An exculpatory clause.

c. An indentured clause.

d. A force majeure clause.

ANS:

a. Incorrect. These kinds of clauses are not known as contributory clauses.

b. Correct. This is an example of an exculpatory clause.

c. Incorrect. There are no indentured clauses.

d. Incorrect. This is not an example of a force majeure clause.

10. In order to prevent plaintiffs from recovering twice, plaintiffs are required under the common law to:

a. sue only in state courts.

b. elect which remedy they wish to pursue.

c. sue only in federal courts.

d. sue only for nominal damages.

ANS:

a. Incorrect. Suing in state courts only will not satisfy this concern.

b. Correct. Plaintiffs must elect which remedy they wish to seek in order to prevent double recovery.

c. Incorrect. Suing in federal courts only will not satisfy this concern.

d. Incorrect. Suing only for nominal damages is not the required means of satisfying the double-recovery concern.