Chapter 16: Contract Remedies and Torts Associated with Contracts
Multiple Choice


1.  

Which of the following types of damages are NOT available in contract cases?

Monetary damages
Equitable remedies
Pecuniary damages
Tort damages


2.  

Cecil has a contract for $2000 to paint Buck's house so that Buck can place the house on the market. He realizes that he will not be able to paint Buck's house before Buck sells the house. He calls Buck and tells him he cannot perform the contract. Which statement is NOT true about this contract?

Buck may declare this an anticipatory breach.
Buck's obligations under the contract are terminated.
Buck may sue Cecil for any damages, but he must wait until the contract is formally breached (e.g., the time in the contract has expired).
Cecil may sue for damages.


3.  

April has offered $300 for Mark's bicycle and Mark has accepted. Mark has tendered performance by offering to bring the bike over to April's apartment immediately and to turn the bike over immediately. Which statement is true?

Mark has substantially performed the contract.
Mark has only partially performed until he has given April the bike
April is now in breach.
If April does not tender $300 immediately, she will be in breach of contract.


4.  

Which of the following is NOT one of the three levels of performance of a contract?

Complete or strict performance
Technical performance.
Substantial performance
Interior performance or material breach.


5.  

Which of the following is NOT a type of monetary damages available under contractual breach?

Compensatory damages
Equitable relief
Liquidated damages
Consequential damages


6.  

If Dr. Adams, a physician, stops to render aid to a patient at the scene of an automobile accident, he may seek the reasonable value of his services through which remedy?

Specific performance
Reformation
Injunction
Quasi contract.


7.  

Phillip was an inventor who had just invented a new electronic measure for calibrating ovens. One of his former friends in a hardware store where he used to work was talking to the CEO of a company that was thinking of buying the license to gadget's patent. He mentioned it to Bob, who said, "Well, it's nice to see old Phil finally got one right. He was always such a loose cannon, ya know. He was always claiming that he invented these wonderful things and come to find out someone else had invented them or they just didn't work." Not long after that, the manufacturing company cancelled its negotiations regarding the gadget. Can Phil sue Bob for contractual interference?

No, because there was no firm contract to begin with.
Yes, because the conversation the CEO had with Bob led to the end of negotiations for a contract.
No, because the contract was for a license to his patent not the sale of a good.
Yes, because this was outrageous conduct.


8.  

April contracted with Jason to buy his 1945 Chevy as an antique car. Burke, upon hearing that Jason was selling the car, told him not to sell it to April because he had heard her bragging that she would just resell it for parts. The car was very dear to Jason. He refused to sell it to April and instead sold it to Burke. Which is the best action for damages April could file?

She could sue Jason and ask for specific performance.
She could sue Burke and ask for punitive damages.
She could file an action against Burke for the tortious interference with contract.
All of the above.


9.  

A contract which includes a damages clause specifying in advance the amount of damages payable upon a breach of contract is:

a contract with a liquidated damages clause
a contract containing a consequential damages clause.
a contract containing a nominal damages clause.
a contract containing a punitive damages clause.


10.  

Jane's employer fired her even though she had six months left on her contract. If she sues what compensatory damages may she ask for?

She can ask for lost wages or salary as compensatory damages.
She can ask for the cost of finding a new job as consequential damages.
She can ask for any costs like the difference in the salary they paid her and the salary they will pay a new employee if it is more than she made.
Both b. and c.


11.  

Sandy sued Martin on a contract he breached. There are no real damages, but Sandy wanted to sue Martin on principles. What kind of damages might result?

Consequential damages.
Compensatory damages.
Punitive damages.
Nominal damages.


12.  

Keith lost $4000 on the transaction when Manny refused to sell him the antique car he had contracted to buy from Manny for $4000. Keith had a buyer who was willing to pay him $2000 more than the contract price. Manny had no way of knowing this when he cancelled the contract. What kind of contract damages can Keith ask for?

Punitive damages.
Consequential damages
Compensatory damages
Liquidated damages.


13.  

Celeste, one of the best horn players in the nation, agreed to perform a French horn concert in Salt Lake City. The contract said she would provide three performances of the same music. The contract contained a clause for liquidated damages that she will pay if she misses one or all of the dates for the concert. The damages are set at $5000 per concert. The income produced by the concerts should exceed a total of $2000. Is this an enforceable liquidated damages clause?

No. This is a penalty. It is not enforceable.
Yes. The damages are undeterminable and the amount is reasonable under the circumstances. This is enforceable.
No. The damages may be determined exactly; therefore liquidated damages are not enforceable. This is not enforceable.
Yes. These are not liquidated damages but really consequential damages. This is enforceable, but not as liquidated damage.


14.  

Which of the following is NOT an equitable remedy?

Specific performance
Injunction
Punitive damages
Quasi-contract


15.  

Sam has bought his uncle's antique player piano from his aunt for $15,000. Unfortunately, she does not want to part with it and refuses to perform her end of the bargain by delivering it to him. What is his remedy for breach of contract?

He may ask for punitive damages.
He may ask for specific performance.
He may get an injunction.
He may seek quasi-contract damages.


16.  

Which element is NOT required for the tort of intentional interference with contractual relations?

A valid enforceable contract between the contracting parties.
Third-party knowledge of this contract.
An intention to cause the contracting parties harm.
Third-party inducement to breach the contract.


17.  

Damages designed to provide the recovery of money that the plaintiff has actually spent or the benefit of the bargain in the course of the unsuccessful contractual dealings is:

Liquidated damages allow the plaintiff to recover the benefit of the bargain.
Punitive damages allow the plaintiff to recover the benefit of the bargain.
Consequential damages allow the plaintiff to recover the benefit of the bargain.
Compensatory damages allow the plaintiff to recover the benefit of the bargain.


18.  

Marta convinced Susie to list her home with Marta's company. She promised Susie that she would show the property vigorously and procure a sale that month. Instead, she did not show the property once and actively discouraged people from visiting it to view it because her commission was smaller on this house than others listed with the company. Finally, three months later, after the house had sat on the market with little or no interest, a buyer made an offer that was $10,000 less than the price of the house. Susie was forced to accept. It was not until much later that she discovered Marta's failure to follow through. She now wants to sue Marta. What is the action that will help her the most?

Her best action is to rescind the contract and sell the house herself, thus keeping the commission.
Her best action is to ask for an injunction.
Her best action would be to sue for breach of contract.
Her best action would be the tort, breach of the implied covenant of good faith and fair dealing.


19.  

Peter has completed 90% of his painting contract with John's Café. He has not finished the kitchen and he painted the bathrooms the wrong color. Which of these statements is not true about his performance.

This is a case of substantial performance in which there has been a minor breach of the contract.
This is material breach and the contract must be voided.
John's can deduct the price of repairing the defect from the contract price and remit the balance to Peter.
John may ask Peter to repaint the bathrooms and finish the kitchen in a timely manner.


20.  

In case of material breach, which of the following statements is NOT true?

Material breach of a contract occurs when a party renders inferior performance of his or her contractual obligations that impairs or destroys the essence of the contract.
There is no clear line between substantial performance and material breach and the court must make a decision on a case by case basis.
The non-breaching party must still perform completely or he will have breached the contract.
The non-breaching party may rescind the contract and seek restitution of any compensation paid under the contract to the breaching party.


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