Chapter 19 - Breach of Contract and Remedies
An injured party that does not suffer an actual loss from the breach of a contract is entitled to consequential damages.
False
Contract provisions that limit the remedies of the parties are generally unenforceable.
False
Only direct losses from a breach of contract may be recovered by an injured party.
False
Ordinarily, contracts for the performance of personal services are specifically ordered.
False
A firm request for additional payment under an existing contract without refusal to perform until the additional payment is made is considered a repudiation of a contract.
False
A waiver is based on the subjective opinion of the innocent party.
False
An antimodification clause specifies that a waiver to any breach automatically modifies the contract.
False
Consequential damages are those that necessarily flow from the breach.
False
Consequential damages may not be recovered, even if they were within the contemplation of the parties at the time of contracting.
False
Damages in excess of actual loss, imposed for the purpose of punishing or making an example of the defendant, are known as compensatory damages.
False
If a plaintiff's loss involves damaged property, it is described as liquidated damages.
False
If there is a breach of contract, the law requires that the other party terminate the contract and bring a lawsuit.
False
Punitive damages are generally recoverable in contract actions.
False
The "American rule" states that the losing party in a lawsuit is responsible for all attorney fees.
False
The innocent party in a breach of contract, has the duty to mitigate damages at maximum efforts.
False
The normal remedy for breach of contract where the plaintiff has suffered a loss is nominal damages.
False
When a party waives compliance with one provision of a contract, the other party may thereafter ignore other provisions of that contract.
False
When one party commits a non-material breach of contract, the other party may rescind the contract.
False
If one party to a contract breaks the contract, the other party generally is under a duty to stop any further performance to avoid sustaining greater damages.
True
In some cases the court may require specific performance, whereby the court will order the contractual performance to be carried out.
True
When a party expressly declares before the time for performance arrives that the contract will not be performed, such a declaration is called an anticipatory repudiation.
True
When a party fails to perform in the manner called for in the contract, a breach occurs.
True
When the contract requires that both parties submit disputes to arbitration, this is an example of a limitation-of-remedies clause.
True
When the plaintiff seeks the remedy of specific performance, the plaintiff wants the other party to carry out the terms of the contract and not pay damages.
True
specific performance
action brought to compel the adverse party to perform a contract on the theory that merely suing for damages for its breach will not be an adequate remedy
remedy
action or procedure that is followed in order to enforce a right or to obtain damages for injury to a right
reservation of rights
assertion by a party to a contract that even though a tendered performance (e.g., a defective product) is accepted, the right to damages for nonconformity to the contract is reserved
consequential damages
damages the buyer experiences as a result of the seller's breach with respect to a third party; also called special damages
punitive damages
damages, in excess of those required to compensate the plaintiff for the wrong done, that are imposed in order to punish the defendant because of the particularly wanton or willful character of wrongdoing: also called exemplary damages
breach
failure to act or perform in the manner called for in a contract
direct damages
losses that are caused by breach of a contract
nominal damages
nominal sum awarded the plaintiff in order to establish that legal rights have been violated although the plaintiff in fact has not sustained any actual loss or damages
injunction
order of a court of equity to refrain from doing (negative injunction) or to do (affirmative or mandatory injunction) a specified act
anticipatory breach
promisor's repudiation of the contract prior to the time that performance is required when such repudiation is accepted by the promisee as a breach of the contract
limitation-of-liability clause
provision in a contract stating that one of the parties is not liable for damages in case of breach; also called exculpatory clause
exculpatory clause
provision in a contract stating that one of the parties shall not be liable for damages in case of breach; also called a limitation-of-liability clause
liquidated damages
provision stipulating the amount of damages to be paid in the event of default of breach of contract
waiver
release or relinquishment of a known right or objection
anticipatory repudiation
repudiation made in advance of the time for performance of the contract obligations
liquidated damages clause
specification of exact compensation in case of a breach of contract
compensatory damages
sum of money that will compensate an injured plaintiff for actual loss
An injured party who rescinds a contract after having performed services may recover the reasonable value of the performance rendered under restitutionary or quasi-contractual damages.
True
A reservation of rights is an assertion by a party to a contract that even though a tendered performance is accepted, the right to damages for the nonconformity to the contract is reserved.
True
A waiver of a breach may be either express or implied.
True
An innocent party to an anticipatory repudiation of a contract has the right to treat the repudiation as a present, material breach and may file suit.
True
If monetary damages would be an adequate remedy, then an action for specific performance is not appropriate.
True
If one of the parties retains money or a legal benefit in a breach of contract, that person is obligated to make restitution to the person conferring the benefit.
True
