Quizzes-Law1-Fall2013
Chp. 18 - Breach of Contract & Remedies
1. Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week. When Handy cancels the contract, Ilsa spends $100 to obtain a similar job that pays $450 per week for a year. Ilsa is entitled to recover
a. the amount of the wages that Handy promised only.
b. the difference between the wages at the two jobs only.
c. the difference between the wages at the two jobs plus $100.
d. $100 only.
2. GroundCover Pools, Inc., agrees to build a swimming pool for Franci, but fails to complete the job. Franci hires EquiAqua, Inc., to finish the project. Candy may recover from GroundCover
a. the contract price less costs of materials and labor.
b. the contract price.
c. the costs needed to complete construction.
d. profits plus the costs incurred up to the time of the breach.
Fact Pattern 1 (Questions 3–4 apply)
Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to subdivide and sell in fifth-acre lots for Pristine Acres, a residential development.
3. Refer to Fact Pattern 1. If Bella breaches the contract, Watershed’s remedy would most likely be
a. a certain ratio of the amount that Bella has in liquidated funds.
b. a percentage of Bella’s unrealized profit.
c. the difference between the land’s contract and market prices.
d. specific performance.
4. Refer to Fact Pattern 1. If Watershed breaches the contract, Bella’s remedy would most likely be
a. a certain ratio of the amount that Watershed has in liquidated funds.
b. a percentage of Watershed’s unrealized profit.
c. the difference between the land’s contract and market prices.
d. specific performance.
5. Cooper’s Brakes, Inc., enters into a contract with Byron’s Service to fix Cooper’s hydraulic equipment. Byron delays the repair for five days, aware that Cooper loses a certain percentage of profit each day. An award to Cooper of consequential damages would
a. establish, as a matter of principle, that Byron acted wrongfully.
b. provide Cooper with funds for a foreseeable loss beyond the contract.
c. provide Cooper with funds for its loss of the bargain.
d. punish Byron and set an example to deter others from similar acts.
6. Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. Lava can recover
a. $13,000.
b. $10,000.
c. $3,000.
d. $0.
7. Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corporation. Fresh Food does not pay for the storage. Earl sells the fruit to Green Grocers, Inc. This sale represents
a. a breach of contract.
b. a mitigation of damages.
c. rescission and restitution.
d. specific performance.
8. Bret contracts to work for City Construction Corporation (CCC) during July for $4,500. On June 30, CCC cancels the contract. Bret declines a similar job with Downtown Builders, Inc., which would have paid $4,000. Bret files a suit against CCC. As compensatory damages, Bret can recover
a. $4,500.
b. $4,000.
c. $500.
d. $0.
9. Kris contracts to work exclusively for Little Manufacturing Company during May for $5,000. On April 30, Little cancels the contract. Kris finds another job during May but earns only $3,000. Kris files a suit against Little. As compensatory damages, Kris can recover
a. $3,000.
b. $2,000.
c. $1,000.
d. $0.
10. Clutch Auto Parts enters into a contract with Bio Health Club for discounted memberships for Clutch’s employees. Bio breaches the contract and Clutch enters into a contract with Apex Fitness for the same service at a lower price. Clutch might be awarded nominal damages to
a. establish, as a matter of principle, that Bio acted wrongfully.
b. provide Clutch with funds for a foreseeable loss beyond the contract.
c. provide Clutch with funds for its loss of the bargain.
d. punish Bio and set an example to deter others from similar acts.
11. Windstar Heli-Pads, Inc., enters into a contract to employ Valerie as an on-site project manager for two years. Windstar breaches the contract. Valerie has a duty to
a. do nothing.
b. reduce the damages that Valerie might otherwise suffer.
c. breach the contract with Windstar.
d. sue Windstar to deter others from similar acts.
12. SealCoat Paving enters into a contract with Royal Golf & Tennis Club to provide surface material for Royal’s tennis courts by April 1 for a tournament to begin May 1. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is
a. meant to pay for additional liquid sealant in the event of damage.
b. a reasonable estimate of the loss on a breach.
c. designed to penalize the breaching party.
d. intended to quickly provide cash to the nonbreaching party.
13. Drew contracts to sell a residential duplex to Evan. The contract provides that if Drew does not close the deal by September 15, he must pay Evan one-half of the contract price. This provision is not enforceable because it is
a. a liquidated damages clause.
b. a mitigation clause.
c. a nominal damages clause.
d. a penalty clause.
14. Ralph contracts to sell his Double-R Ranch to Samantha on May 1. On April 20, Ralph tells Samantha that he will not go through with the deal. Samantha can recover
a. the cost of any property that Samantha would find suitable.
b. the cost of a similar, nearby ranch.
c. the Double-R Ranch.
d. nothing.
15. For Petra to recover the benefit of her bargain from a breached real estate contract with River City Properties, Inc., the most appropriate remedy is
a. damages.
b. quasi-contractual recovery.
c. rescission.
d. specific performance.
16. Tristan hires Stefani to perform at Tristan’s Club, but she breaches the agreement to accept a higher-paying job at Rock Star Arena. Tristan files a suit against her. The court will most likely
a. award damages to Tristan.
b. cancel Stefani and Rock Star’s contract.
c. order Stefani to perform the contract.
d. reform Tristan and Stefani’s contract.
17. A contract for a sale of land from Evergreen Properties, Inc., to Longlife Investment Corporation contains an erroneous legal description. The most appropriate remedy for these parties is
a. quasi-contractual recovery.
b. reformation.
c. rescission.
d. specific performance.
18. Mitchell orally agrees to pay Lorena to plant and harvest a quarter of Mitchell’s farm acreage for four soybean seasons. After Lorena prepares the land and plants the first crop, Mitchell says that their deal is off. Lorena can most likely recover
a. in quasi contract.
b. nothing.
c. in restitution.
d. on the parties’ existing contract.
19. Value Ventures, Inc., contracts to buy Umbrage Corporation’s assets. Umbrage breaches the contract. Value files a suit against the corporation, seeking various remedies. The doctrine of election of remedies has been eliminated in contracts involving sales of
a. goods.
b. intellectual property.
c. real property.
d. services.
20. A contract between E-Debits, Inc., and Fiscal Credit Corporation includes a provision excluding liability as a result of fraud. This provision is
a. enforceable because the parties are protected from liability.
b. enforceable because the parties consented to it.
c. enforceable if the parties have equal bargaining power.
d. not enforceable.
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