Q. If a party to a contract fails to perform their obligations, what is the first step the other party should take?
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A.
Sue for damages
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B.
Notify the breaching party
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C.
Terminate the contract
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D.
Seek specific performance
Solution
The first step is typically to notify the breaching party of the breach, allowing them an opportunity to remedy the situation.
Correct Answer:
B
— Notify the breaching party
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Q. In the event of a breach, what is the duty of the non-breaching party?
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A.
To mitigate damages
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B.
To ignore the breach
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C.
To terminate the contract immediately
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D.
To seek punitive damages
Solution
The non-breaching party has a duty to mitigate damages, meaning they must take reasonable steps to reduce their losses.
Correct Answer:
A
— To mitigate damages
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Q. What is 'specific performance' in contract law?
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A.
A type of damages awarded for breach
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B.
A court order to fulfill the terms of the contract
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C.
A negotiation tactic
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D.
A method of contract termination
Solution
Specific performance is a legal remedy where the court orders the breaching party to perform their contractual obligations.
Correct Answer:
B
— A court order to fulfill the terms of the contract
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Q. What is required for a contract to be considered performed?
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A.
Both parties must agree to the terms
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B.
All parties must fulfill their obligations
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C.
Only one party must fulfill their obligations
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D.
The contract must be in writing
Solution
A contract is considered performed when all parties fulfill their obligations as outlined in the agreement.
Correct Answer:
B
— All parties must fulfill their obligations
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Q. What is the legal term for a minor breach of contract?
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A.
Material breach
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B.
Partial breach
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C.
Fundamental breach
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D.
Minor breach
Solution
A minor breach is often referred to as a 'minor breach' or 'partial breach', which does not excuse the non-breaching party from their obligations.
Correct Answer:
D
— Minor breach
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Q. What type of damages are intended to put the injured party in the position they would have been in had the contract been performed?
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A.
Consequential damages
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B.
Punitive damages
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C.
Compensatory damages
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D.
Nominal damages
Solution
Compensatory damages are designed to compensate the injured party for losses directly resulting from the breach.
Correct Answer:
C
— Compensatory damages
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Q. Which of the following is a valid defense against a breach of contract claim?
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A.
Impossibility of performance
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B.
Lack of consideration
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C.
Mutual mistake
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D.
All of the above
Solution
All of the listed options can serve as valid defenses against a breach of contract claim.
Correct Answer:
D
— All of the above
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Q. Which of the following is NOT a remedy for breach of contract?
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A.
Damages
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B.
Specific performance
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C.
Rescission
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D.
Negotiation
Solution
Negotiation is not a legal remedy for breach of contract; it is a method of resolving disputes.
Correct Answer:
D
— Negotiation
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