Q. In which situation might a court order specific performance as a remedy?
A.
When the contract is for the sale of goods
B.
When the subject matter of the contract is unique
C.
When the parties agree to it
D.
When the breach is minor
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Solution
A court might order specific performance when the subject matter of the contract is unique, such as in real estate transactions.
Correct Answer:
B
— When the subject matter of the contract is unique
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Q. What is the difference between liquidated damages and punitive damages?
A.
Liquidated damages are predetermined, while punitive damages are meant to punish
B.
Liquidated damages are awarded for emotional distress, while punitive damages are for economic loss
C.
Liquidated damages are only available in tort cases, while punitive damages are available in contract cases
D.
There is no difference
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Solution
Liquidated damages are predetermined amounts specified in the contract, while punitive damages are meant to punish the breaching party.
Correct Answer:
A
— Liquidated damages are predetermined, while punitive damages are meant to punish
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Q. What is the effect of a waiver of breach in a contract?
A.
It permanently eliminates the right to enforce the contract
B.
It allows the breaching party to avoid all liability
C.
It prevents the non-breaching party from claiming future breaches
D.
It has no effect on the contract
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Solution
A waiver of breach prevents the non-breaching party from claiming future breaches of the same type.
Correct Answer:
C
— It prevents the non-breaching party from claiming future breaches
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Q. What is the legal term for the cancellation of a contract due to a breach?
A.
Rescission
B.
Restitution
C.
Reformation
D.
Ratification
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Solution
Rescission is the legal term for the cancellation of a contract due to a breach.
Correct Answer:
A
— Rescission
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Q. What is the primary purpose of remedies for breach of contract?
A.
To punish the breaching party
B.
To restore the non-breaching party to the position they would have been in if the contract had been performed
C.
To terminate the contract
D.
To create a new contract
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Solution
The primary purpose of remedies for breach of contract is to restore the non-breaching party to the position they would have been in if the contract had been performed.
Correct Answer:
B
— To restore the non-breaching party to the position they would have been in if the contract had been performed
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Q. What type of damages are awarded to compensate for actual losses suffered due to a breach?
A.
Punitive damages
B.
Nominal damages
C.
Compensatory damages
D.
Liquidated damages
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Solution
Compensatory damages are awarded to compensate for actual losses suffered due to a breach.
Correct Answer:
C
— Compensatory damages
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Q. Which of the following is a requirement for a party to recover damages for breach of contract?
A.
The damages must be foreseeable
B.
The damages must be punitive
C.
The damages must be nominal
D.
The damages must be agreed upon in advance
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Solution
To recover damages for breach of contract, the damages must be foreseeable at the time the contract was made.
Correct Answer:
A
— The damages must be foreseeable
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Q. Which of the following is NOT a common remedy for breach of contract?
A.
Damages
B.
Specific performance
C.
Rescission
D.
Injunction
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Solution
Injunctions are typically used in tort law and are not a common remedy for breach of contract.
Correct Answer:
D
— Injunction
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Q. Which of the following is true regarding the duty to mitigate damages?
A.
The non-breaching party has no obligation to mitigate damages
B.
The non-breaching party must take reasonable steps to reduce their losses
C.
The breaching party must mitigate damages
D.
Mitigation is only required in tort cases
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Solution
The non-breaching party has a duty to take reasonable steps to mitigate their damages after a breach occurs.
Correct Answer:
B
— The non-breaching party must take reasonable steps to reduce their losses
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Q. Which remedy allows a non-breaching party to recover the value of benefits conferred to the breaching party?
A.
Compensatory damages
B.
Restitution
C.
Specific performance
D.
Nominal damages
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Solution
Restitution allows a non-breaching party to recover the value of benefits conferred to the breaching party.
Correct Answer:
B
— Restitution
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