LEGL Chap 13

Punitive damages are never awarded in breach of contract actions.

False

Specific performance is the remedy customarily used when one party has breached a contract for personal services.

False

Normally, when a nonbreaching party has been damaged by a breach of contract, he or she has a duty to mitigate those damages.

True

The injury suffered by a nonbreaching party due to the breach of a contract may be remedied by payment of compensatory damages.

True

The measure of damages for breach of a construction contract depends on which party breaches and when.

True

Expenses that are caused directly by a breach of contract such as those incurred to obtain performance from another source are incidental damages.

True

Consequential damages are foreseeable damages that arise from a party's breach of a contract.

True

A party seeking to recover in quasi contract must show that he or she has been unjustly enriched.

False

A breach of contract may entitle the innocent party to rescind the contract.

True

A contract may include a clause stating that no damages can be recovered for a certain type of breach.

True

Creekside Property Corporation enters into a contract with Downstream Management Associates to manage and maintain Creekside's apartment complex. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is

a limitation-of-liability clause.

Home Delivery Corporation and Interstate Transport, Inc., sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is

a liquidated damages clause.

Dino hires Eve to perform at Dino's Club, but Eve later breaches the agreement to accept a higher-paying job at First Star Arena. Dino files a suit against Eve. The court will most likely

award damages to Dino.

Medical Centre enters into a contract with Local Motion Fitness Club for discounted memberships for the Centre's employees. If the Club breaches the contract and the Centre enters into a contract with KO Sports for the same service at a lower price, the Centre might be awarded nominal damages to

establish, as a matter of principle, that the Club acted wrongfully.

Hybrid Corporation enters into a contract with Insure Service, Inc. (ISI), to obtain health insurance for Hybrid employees. If ISI breaches the contract and Hybrid is awarded compensatory damages, the purpose would be to

provide Hybrid with funds for its loss of the bargain.

Fashion Retail Center enters into a contract with Great Promotions, Inc., to provide Fashion with a plan to retool its merchandising strategy. If Great Promotions breaches the contract, Fashion has a duty to

reduce the damages that Fashion might otherwise suffer.

Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager for two years. If Rig breaches the contract, Scott has a duty to

reduce the damages that Scott might otherwise suffer.

Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment. When Ira sends her the rest of the price, Jane refuses to ship Ira the collection. Ira should seek

specific performance.

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

the difference between the wages at the two jobs plus $100.

Mona contracts to repair a computer for NuData, Inc. (NDI). Mona knows that without the computer, NDI will lose a sale. Mona does not perform as promised. NDI files a suit against Mona. As consequential damages, NDI can recover

the loss of profit from the lost sale.