law exam 2 [CH. 12]

Typically, an ________ interest is the profit the plaintiff would have earned under a contract

expectation

Big Co., a construction company, builds a grocery store. The contract calls for a final price of $5 million. Big Co. incurred $4.5 million in costs and stands to make a profit of $500,000. On a final inspection, the grocery store owner is upset. His blueprints called for 24 skylights, but the finished building has only 12. Installing the additional skylights would cost $100,000. Big Co. made no other errors. How much must the grocery store owner pay Big Co.?

$4,900,000

____________ means some event has occurred that neither party anticipated and fulfilling the contract would now be extraordinarily difficult and unfair to one party

Commercial impracticability

_____________ means some event has occurred that neither party anticipated, and the contract now has no value for one party

Frustration of purpose

an assertion or action by a party indicating that he or she will not perform an obligation that he or she is contractually obligated to perform at a future time

anticipatory repudiation

means that something has happened making it literally impossible to do what the promisor said he would do

True impossibility

What are the legal differences between a material breach and an immaterial breach of contract? Choose 2 answer choices. Whether a party has announced repudiation of the contract The dollar amount of damages Whether the court will discharge the contract The level of the performance of the contractual obligations

Whether the court will discharge the contract The level of the performance of the contractual obligations

________occurs when one party to a contract fails to perform a contractual duty

breach of contract

Courts use the related doctrines of __________ and ____________ to decide when a change in circumstances should permit one side to escape its duties

commercial impracticability and frustration of purpose

Courts typically divide the __________ damages into three parts: 1. direct (or "compensatory") 2. consequential (or "special") damages 3. incidental damages

expectation

A manufacturer delivers a new tractor to Farmer Ted on the first day of the harvest season. But the tractor will not start. It takes two weeks for the right parts to be delivered and installed. The repair bill comes to $1,000. During the two weeks, some acres of Farmer Ted's crops die. He argues in court that his lost profit on those acres is $60,000. If a jury awards $60,000 for tractor repairs, it will be in the form of _________ damages. consequential direct incidental specific performance

consequential

These damages are only available if they are a foreseeable consequence of the breach

consequential

these circumstances relate to which damage? If 1. the lost profits were foreseeable and If 2. the plaintiff provides enough information so that the fact finder can reasonably estimate a fair amount.

consequential

this is the most common damage awards for the expectation interest. These are the damages that inevitably result from the breach?

direct damages

If performing a contract was truly impossible, a court will ________ the agreement. But if honoring the deal merely imposed a financial burden, the law will generally _______ the contract.

discharge, enforce

Julie signs a contract to buy Nick's 2002 Mustang GT for $5,000. Later, Nick changes his mind and refuses to sell his car. Julie soon buys a similar 2002 Mustang GT for $5,500. She then sues Nick and wins $500. The $500 represents her _______ expectation interest reliance interest restitution interest

expectation interest

the most common remedy that the law provides for a party injured by a breach of contract

expectation interest

Most contracts are discharged by:

full performance

Substantial performance involves an _______ breach

immaterial

if a builder fails to seed the lawn and plant landscaping after a house is built would be an example of what breach of contract?

immaterial

It is rare for contract performance to be truly _______ but very common for it to become a ________ burden to one party.

impossible, financial

these are damages that are relatively minor costs in which the injured party suffers when responding to the breach

incidental

If the builder failed to include a basement when building the house, however, that would be a material breach would be an example of what breach of contract?

material

Substantial performance involves a _______ breach?

material

occurs when one party fails to perform his or her contractual obligations and defeats the essential purpose of the agreement?

material breach

what breach of contract gets discharged?

material breach

This breach occurs when one of the parties fails to complete a minor part of the contract:

minor/immaterial

The most common remedy, used in the great majority of lawsuits, is what

money damages

The injured party may be unable to demonstrate expectation damages, perhaps because it is unclear he would have profited describes what interest

reliance

the objective is to restore to the injured party the benefit she has provided. Margot provided the service with a benefit—money. Her best argument describes what interest

restitution

A statutory time limit within which an injured party must file suit:

statute of limitations

Requires one party to perform its obligations precisely, with no deviation from the contract terms

strict performance

Francoise owns a vineyard that produces Beaujolais Nouveau wine. She agrees to ship 1,000 cases of her wine to Ty, a New York importer, as soon as this year's vintage is ready. Ty will pay $50 per case. But a fungus wipes out her entire vineyard. Francoise is discharged. Describes what case?

true impossibility

Lenny makes K2, a synthetic form of marijuana, in his basement. He signs an agreement with the Super Smoke Shop to deliver 1,000 cans of K2 for $10,000. After the contract is signed, but before the delivery, Super Smoke Shop's state legislature makes the sale of K2 illegal. Lenny's contract will be discharged because of _________ true impossibility commercial impracticability frustration of purpose

true impossibility