6. Contract Law
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Questions and Answers

What is rescission in the context of breach of contract?

  • It is a specific performance remedy for breach of contract.
  • It is termination of contract that returns parties to their original positions. (correct)
  • It is compensatory damages awarded by the court.
  • It is a provision in the contract for liquidated damages.

What are liquidated damages?

  • Damages awarded without any agreement between parties.
  • Amount of money agreed to in advance in the contract. (correct)
  • A remedy for breach of contract that allows suing for more than agreed sum.
  • Damages that compensate for losses incurred.

Which of the following is true about liquidated damages?

  • They can be awarded in addition to compensatory damages.
  • They are determined by the court after a breach of contract.
  • They are usually not specified in the contract.
  • They limit the party's ability to sue for more than the agreed sum. (correct)

What do compensatory damages aim to do?

<p>Compensate the non-breaching party for losses incurred. (A)</p> Signup and view all the answers

In real estate transactions, what is often treated as liquidated damages for the seller?

<p>Buyer’s good faith deposit (B)</p> Signup and view all the answers

Can parties agree to rescission without court intervention?

<p>Yes, parties can agree on rescission. (D)</p> Signup and view all the answers

What is the most common remedy for breach of contract?

<p>Compensatory damages (D)</p> Signup and view all the answers

What is the legal status of a void contract?

<p>It has no legal effect whatsoever. (A)</p> Signup and view all the answers

In the context of contract assignment, when can a contract be assigned without permission?

<p>When it is a personal service contract (A)</p> Signup and view all the answers

What is required for novation to occur between parties?

<p>Mutual agreement (C)</p> Signup and view all the answers

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