Chapter 20 Business Law

A landlord who continuously accepts late rental payments without collecting the late fee provided in the lease: a. waives the late fee b. will collect the late fee at a later date c. is ignorant of the late fee d. allows the tenant to repudiate the lease

A

Damages in excess of actual loss are called: a. punitive damages b. compensatory damages c. restitution d. nominal damages

A

Failure to mitigate damages limits recovery to: a. damages that would have been sustained had the plaintiff mitigated the damages where it was possible to do so b. nominal damages and punitive damages c. damages for consequential loss d. exemplary damages

A

When a party expressly declares that performance will not be made when required, this declaration is a(n): a. anticipatory repudiation b. injunciton c. negotiating technique d. waiver of breach

A

An action for injunctive relief may be granted a. if money is due and payable b. if the breach consists of doing a prohibited act c. if the breach would cause nominal changes d. if the breach would cause consequential damages

B

Consequential damages may be recovered if a. the damages were not foreseeable consequence of the breach b. the damages reasonably flow from the breach as a result of the injured party's particular circumstances c. the breach did not cause the damages d. the loss exceeds $500

B

If a seller delivers defective goods, the buyer does not lose the right to object to the breach of contract if the buyer: a. accepts the goods b. accepts the goods with a reservation of right c. agrees to a modification of the contract d. accepts the performance without protest

B

The failure to act or perform in the manner called for by a contract is a a. waiver b. breach c. forbearance d. reservation of right

B

Which is NOT a correct statement concerning a liquidated damages clause a. if the clause is enforced, the injured party can collect no more than the amount specified b. if the clause is enforced, the injured party has a choice between compensatory damages or liquidated damages c. It must be possible to determine actual damages d. The amount of liquidated damages are established by the parties to the contract

B

A provision stipulating the amount of money damages to be paid in the event of default or breach of contract is known as a __________ damages clause. a. nominal b. contract c. liquidated d. breach

C

If a plaintiff seeking damages in a breach of contract action receives $1 in damages, the damages would most likely be classified as a. punitive damages b. exemplary damages c. nominal damages d. compensatory damages

C

The damages that are typically recoverable when a contract has been breached and one party has suffered loss are called a. punitive damages b. emotional distress damages c. compensatory damages d. liquidated damages

C

The remedy of specific performance will most likely be granted in the case of a(n): a. employment contract b. contract to buy shares of publicly traded stock c. contract for the sale of a business d. contract for the sale of florida oranges

C

When a written contract does not correctly state the agreement already made by the parties either party make seek a a. rescission b. injunction c. reformation of the contract d. action for specific performance

C

Which is not a correct statement concerning rescission of a contract? a. the breach must be material b. the injured party who rescinds may recover money paid under the contract c. the contract remains in effect after the rescission d. rescission is the undoing of the contract

C

A contractual provision which states that a waiver of rights will not contitute a modification to the contract is a. not enforceable as being in bad faith b. not enforceable as a violation of law c. enforceable by one party only d. enforceable

D

Repeated breaches and waivers are generally interpreted to indicate: a. poor business practices b. illegal behavior c. ignorance of the law d. modification of contract

D

The party that breaks a contract may be required to pay damages to the other party to compensate for: a. losses that could have been avoided by hiring someone else to perform the contract b. emotional disturbance caused by the breach of contract c. a heart attack induced by the emotional disturbance cause by the breach of contract d. damages resulting necessarily and directly from the breach of contract

D

The rule of mitigation of damages requires that a party injured by a breach of contract must: a. take any and all steps possible to reduce the damages that will be sustained because of the breach b. discharge the contract before filing suit for breach c. hire someone else to perform the contract d. take responsible steps to reduce the damages that would otherwise be sustained because of the breach

D

When an anticipatory repudiation of a contract occurs, the aggrieved person's option(s) include: a. doing nothing and waiting for performance per the contract b. immediately declaring a breach of contract c. considering the contract cancelled d. all

D

When one party has broken a contract, there are several remedies available to the non-breaching party, including a. brining an action for money damages b. rescinding the contract c. seeking specific performance d. all

D

Which is not a correct statement concerning the remedy of specific performance? a. the subject matter of the contract must generally be unique b. an award of monetary damages would be an inadequate remedy c. the granting of specific performance is discretionary with the court d. it is generally available in all breach of contract cases

D

A party must mitigate damages at all costs

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

Contract provisions that limit the remedies of the parties are generally unenforceable

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 there is a breach of contract, the law requires that the other party terminate the contract and bring a lawsuit

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

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

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

A party injured by the other party's anticipatory repudiation of a contract has the right to bring suit at the time of the repudiation without waiting to see if there will be proper performance when due

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 anticipatory repudiation must be clear, absolute, and unequivocal.

True

An injured party that does not suffer an actual loss from the breach of a contract is entitled to nominal damages

True

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

If monetary damages would be an adequate remedy, then an action for specific performance is not appropriate

True

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 my require specific performance when there is a breach of contract

True

The measure of monetary damages when there has been a breach of contract is the sum of money that will place the injured party in the same position that would have been attained if the contract had been performed.

True

The normal remedy for breach of contract where the plaintiff has suffered a loss is compensatory damages.

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 one party breaks the contract, the contract is said to be breached

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

Whether there has been a waiver is a question of fact

True

If a plaintiff's loss involves damaged property, it is described as liquidated damages.

false