Ch. 19 - Breach of Contract and Remedies

Cowtown Creamery needs a certain part for it pasteurizing equipment to continue its operations and orders one for $3000 from Dairy Supplies Co. Cowtown tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10000. Dairy Supplies ships the part late. Cowtown can recover ______

$10,000

Sati contracts to work exclusively for Thermal Imaging Company during July for $5000. On June 30, Thermal Imaging cancels the contract. Sati finds a similar job for the month of July but earns only $3,000. Sati files a suit against Thermal Imaging. As compensatory damages, Sati can recover ____

$2000

Rashi contracts to work for Social Data Analysis Corporation during June for $4500. On May 31, Social Data cancels the contract. Rashi declines a job of a different type and rank with Tech Collection Inc which would have paid $3500. Rashi files a suit against Social Data. As compensatory damages, Rashi can recover _____

$4,500

Porches & Verandas agrees to build a screen porch for Quinn, but fails to complete the job. Quinn hires Ramada Inc to finish the project. Quinn may recover from Porches & Verandas

The costs needed to complete construction

Isaac holds one ton of perishable fruit in storage for Juice Smoothies Corporation. Juice Smoothies does not pay for the storage. Isaac sells the fruit to Kayo Beverage Company. This sale represents ______

a mitigation of damages.

Metro Facilities contracts to sell parking garage to Nouveau Property Company. The contract provides that if Metro does not close the deal by September 15, it must pay Nouveau one-half of the contract price. This provision is not enforceable because it is _____

a penalty clause

Renew Turf enters into a contract with Sports Park to provide surface material for Sports Park's baseball fields by October 1 for a series to begin October 5. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is _____

a reasonable estimate of the loss on a breach.

Rebecca hires Samson to perform at Becca's Bistro, but he breaches the agreement to accept a higher-paying job at Three Courses Dinner Theater. Rebecca files a suit against him. The court will most likely _____

award damages to Rebecca

Bread & Bagels Bakery enters into a contract with Cineplex for discounted tickets for Bread & Bagels' employees. Cineplex breaches the contract and Bread & Bagels enters into a contract with DigiMovies for the same service at a lower price. Bread & Bagels might be awarded nominal damages to ____

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

A party seeking to recover compensatory damages cannot also recover incidental damages. (t/f)

f

A party seeking to recover in quasi contract must show that he or she acted as a volunteer in conferring benefit on another party. (T/f)

f

An award of damages for a breach of contract can elevate the nonbreaching party to a better position than he or she would have been if the contract had not been breached. (t/f)

f

Compensatory damages compensate a party injured by a breach of contract by punishing the party that breached the contract. (t/f)

f

Damages that compensate the nonbreaching party for the loss of a bargain are known as consequential damages. (t/f)

f

Nominal damages are designed to punish a wrongdoer and set an example to deter similar conduct in the future. (T/f)

f

Ordinarily the remedy for a seller's breach of contract for a sale of real estate is damages. (t/f)

f

Punitive damages generally are awards in lawsuits for breach of contract. (t/f)

f

Rescission is an equitable remedy used when the parties have imperfectly expressed their agreement in writing. (t/f)

f

When one party breaches a contract, the other party can only sue for damages (t/f)

f

Ileana orally agrees to pay Jaime to plant and harvest a quarter of Ileana's farm acreage for four corn-planting season. After Jaime prepares the land and plants the first crop, Ileana says that their deal is off. Jaime can most likely recover ____

in quasi contract

Dry Gulch Farms hires Elliot to repair its irrigation sytem on site on a certain date for $2500, but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2000. Dry Gulch may recover from Elliot _____

nominal damages

A contract between Recreational Games & Rides and Summer Fair Corp. includes a provision excluding liability as a result of fraud. This provision is ____

not enforceable

Meatpackers Inc enters into a contract with Nemiah's Ranch for the delivery of a certain number of beef cattle on a set schedule. Nemiah's delays the first delivery for five days, aware that Meatpackers loses a certain percentage of profit each day. An award to Meatpackers of consequential damages would _____

provide meatpackers with funds for a foreseeable loss beyond the contract.

A contract for a sale of land from Bayside Properties Inc to City Development Corporation contains an erroneous legal description. The most appropriate remedy for these parties is ___

reformation

Nonny agrees to buy a unique collection of Olympics memorabilia for $7,000 from Piper and sends $1500 as a down payment. When Nonny sends Piper the rest of the price, she refuses to ship the collection. Nonny should seek _____

specific performance.

A liquidated damages provision specifies that a certain amount is to be paid in the event of a future default or breach of contract. (t/f)

t

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract. (t/f)

t

Consequential damages are foreseeable damages that arise from a party's breach of contract. (T/f)

t

Courts order reformation most often when fraud or mutual mistake is present. (t/f)

t

In a contract for a sale of goods, the usual measure of compensatory damages is the difference between the contract price and the market price. (t/f)

t

In most situations, when a breach of contract occurs, the innocent injured party is held to a duty to mitigate the damages. (t/f)

t

Liquidated damages provisions usually are enforceable. (t/f)

t

Ordinarily, a waiver by a contracting party will not operate to waive subsequent, additional, or future breaches of contract. (t/f)

t

Restitution involves one party's recapture of a benefits conferred on the other party that has unjustly enriched him or her. (t/f)

t

Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that is excused by the provision. (t/f)

t

Leif contracts to sell his Micro Brewery & Pub to Naomi on April 1. On March 15, Leif tells Naomi that he will not go through with the deal. Naomi can recover ____

the Micro Brewery & Pub

Handcrafts and Hobbies Store agrees to hire Iliana for one year at a salary of $600 per week.When Handcrafts & Hobbies cancels the contract, Iliana spends $150 to obtain a similar job that pays $450 per week for year. Iliana is entitled to recover ______

the difference between the wages at the two jobs plus $150.

Dawson owns Evergreen, a complex under construction that will include commercial and residential suites, as well as a parking garage. Dawson allows First Call Construction, the contractor, to complete a stage of construction late. This waives Dawson's right to sue for _____

this delay only