Contract Law Quiz

Questions and Answers

Which of the following is not an equitable remedy?

Money damages (correct)

Rescission and restitution

Reformation

Specific performance

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

Nothing, because breaches are legally permissible and have no consequences

Money damages (correct)

An apology

Prosecute the breaching party for a criminal violation

The purpose of compensatory damages is:

To severely punish the breaching party

To provide the nonbreaching party with sufficient money to pay for any injuries or damages actually sustained (correct)

To provide the breaching party with a way to mitigate damages

To provide a small 'slap on the wrist' to the breaching party

Samuel breaches a contract for the sale of 500 copies of a book, what are Ann's damages?

$500 Signup and view all the answers

How would a court determine Marie's damages if Zoe breaches the coffee contract?

They would compare the market price of coffee to the contract price and give Marie the difference Signup and view all the answers

What is the measure of damages in a case involving the sale of land when specific performance is not possible?

The market price of the land Signup and view all the answers

What remedy can Bob seek when Vicky breaches their contract before he can start work?

Expected profits from the contract (the total contract price less the cost of materials and labor) Signup and view all the answers

Consequential damages are:

Special, foreseeable damages that compensate for a loss that does not directly or immediately result from a breach of contract Signup and view all the answers

In the landmark case of Hadley v. Baxendale, what was the key issue?

Whether the court could award consequential damages Signup and view all the answers

As a general rule, punitive damages:

Are not awarded in a breach of contract case Signup and view all the answers

The purpose of nominal damages is:

To establish that the defendant acted wrongfully Signup and view all the answers

If Valerie contracts with Bill to build a stone wall and breaches, Bill is under a legal obligation to:

Mitigate his damages Signup and view all the answers

The case of Fujitsu Ltd. v. Federal Express Corp. involved which of the following contractual duties?

The duty to mitigate damages Signup and view all the answers

Liquidated damages may be defined as:

A specific dollar amount to be paid in the event of a future default or breach of contract Signup and view all the answers

If Luis contracts with Greenfield to buy dairy cows and Greenfield delivers but Luis doesn't pay, Greenfield may get his cows back if he asks for:

Rescission and restitution Signup and view all the answers

If Luis pays Greenfield, but Greenfield does not deliver the cows, which remedy would Luis seek?

Specific performance Signup and view all the answers

If Jennifer refuses to tutor Sal's children after one week, a court would likely:

Refuse to order specific performance of the contract because it is a contract for personal services Signup and view all the answers

If a party has partially performed under an unenforceable contract, what remedy could they seek?

Recovery based on quasi contract Signup and view all the answers

To recover based on a claim of quasi contract, a party must prove:

That he or she expected to be paid for her performance Signup and view all the answers

A provision stating that no damages may be recovered is called:

An exculpatory clause Signup and view all the answers

If a contract stipulates that a consumer cannot sue for personal injuries after a fault, what do you call this provision?

An exculpatory clause Signup and view all the answers

To prevent plaintiffs from recovering twice, plaintiffs are required under common law to:

Elect which remedy they wish to pursue Signup and view all the answers

Study Notes

Equitable Remedies

Money damages are not classified as an equitable remedy.

Legal Entitlements in Breach of Contract

Nonbreaching parties are entitled to money damages when there’s a breach of contract.

Purpose of Compensatory Damages

Compensatory damages aim to financially restore the nonbreaching party to their pre-breach position.

Calculation of Damages

In a contract for book sales, if the contract price is $3.50 per book and the market price at breach is $4.50, damages could amount to $500.

Determining Damages for Breach

Courts assess market price versus contract price to compute damages in breach cases involving commodities.

Measure of Damages in Real Estate

When specific performance isn't an option, damages for land sale breaches are assessed based on the land's market price.

Remedy Options in Contract Breaches

A party can seek expected profits calculated as total contract price minus material and labor costs if a contract is breached before work starts.

Nature of Consequential Damages

Consequential damages are special, foreseeable losses that do not arise directly from a breach.

Landmark Case: Hadley v. Baxendale

The key issue was the awarding of consequential damages related to a breach of contract.

General Rule on Punitive Damages

Punitive damages are typically not awarded in breach of contract cases.

Purpose of Nominal Damages

Nominal damages serve to acknowledge wrongdoing without compensating for actual losses.

Obligation to Mitigate Damages

Parties are required to mitigate damages after a breach, even if they are the nonbreaching party.

Mitigation Duties in Contract Cases

The duty to mitigate damages was central in the case of Fujitsu Ltd. v. Federal Express Corp.

Liquidated Damages Definition

Liquidated damages refer to a pre-determined specific sum payable in the event of a breach.

Remedies for Non-Payment in Contracts

Rescission and restitution can be sought if a party fails to pay for received goods.

Seeking Specific Performance

Specific performance can be sought if a party wants a unique item that was not delivered.

Specific Performance in Personal Services Contracts

Courts generally refuse to enforce specific performance in personal services agreements.

Compensation for Partial Performance

Compensation may be pursued based on quasi-contract principles if one party has partially fulfilled a contract.

Requirements for Quasi-Contract Claims

A party must show they expected payment for their performance to recover under a quasi-contract.

Exculpatory Clause

A provision preventing recovery of damages is termed an exculpatory clause.

Legal Effect of Exculpatory Clauses

Exculpatory clauses can shield businesses from liability claims in exchange for benefits, such as reduced prices.

Avoiding Double Recovery

To prevent double recovery, plaintiffs must elect which remedy to pursue in legal claims.

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Description

Test your understanding of equitable remedies and breaches in contract law. This quiz covers key concepts such as money damages, specific performance, and the legal entitlements of parties involved in a contract. Perfect for law students or anyone interested in legal principles.