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Exam 17: Breach and Remedies

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Question 31

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Complete Boring Corporation ships its only pump to Drills & Bits, Inc., the manufacturer, for repair. Complete Boring hires Everywhere Shipping, Inc., to take the pump to Drills & Bits and to return it to Complete Boring as soon as the repair is complete. Complete Boring is forced to suspend operations without a pump, but Everywhere Shipping does not know this. Complete Boring expects to be without the pump for five days and to lose profits of $5,000. When the pump is not returned by the end of the fifth day, Complete Boring rents a pump at a cost of $100 per day. Everywhere Shipping delays five more days before returning the pump. Complete Boring files a suit against Everywhere Shipping, asking for compensatory, consequential, and punitive damages. Will Complete Boring recover?

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Yes and no. Complete Boring will succeed...

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Question 32

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Bagels Bakery enters into a contract with Cineplex for discounted tickets for Bagels's employees. When Cineplex does not provide the tickets, Bagels enters into a contract with DigiMovies for the same service at a lower price. In a suit for breach, Bagels might be awarded nominal damages to

A) establish, as a matter of principle, that Cineplex acted wrongfully.
B) provide Bagels with funds for a foreseeable loss beyond the contract.
C) provide Bagels with funds for its loss of the bargain.
D) punish Cineplex and set an example to deter others from similar acts.

E) A) and B)
F) C) and D)

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Question 33

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Faiz enters into a contract to buy 350 acres from Grain Farm to cultivate hops and open a brewery. Faiz fails to make the purchase. Grain Farm's remedy is most likely

Ochre holds one ton of perishable fruit in storage for Produce Corporation. If Produce does not pay for the storage, under the doctrine of mitigation of damages, Ochre is held to a duty to

Sabo contracts to work exclusively for Thermal Company during July for $5,000. On June 30, Thermal cancels the contract. Sabo finds a similar job for the month of July but earns only $3,000. Sabo files a suit against Thermal. As compensatory damages, Sabo can recover

A court will grant specific performance as a remedy only when the legal remedy is adequate.

If a surgeon breaches a contract by refusing to perform an operation, a court will normally compel performance through an award of specific performance.

A contract between Speculative Investment Company and Trusts & Bonds Inc. excludes liability as a result of fraud. This exclusion is enforceable

On the breach of a contract for a sale of land when the seller has sold the property to someone else, an award of specific performance is unavailable.

A restrictive covenant imposed as part of a sale of an ongoing business will be enforced even if the restrictions are unreasonable.

Foundation Construction Company agrees to lay a foundation for Garth, but fails to finish the job. Garth hires Housing Projects Inc. to complete the work. In a suit for breach, Garth may recover from Foundation

Berry Farm hires Chun to repair its irrigation system on site by a certain date for $2,500, but Chun fails to perform. Berry Farm hires Diego to do the job for $2,000. In a suit for breach, Berry Farm may recover from Chun

In most situations, when a breach of contract occurs, the injured party is held to a duty to mitigate, or reduce, the damages that he or she suffers.

A contract clause that provides the only remedy for breach is repair, replacement, or refund of the purchase price is invalid and unenforceable.

Sometimes, when a buyer breaches a contract for a sale of goods and the seller has not yet produced the goods, the seller can recover the lost profits.

There is a remedy available for nearly every breach of contract.

When a breach is material and willful, an innocent party seeking to rescind it must show that the contracting parties cannot be restored to the status quo.

To induce the sale of an auto parts business, Carmel fraudulently represents the worth of the inventory to Drew, who offers an inflated price. They enter into a contract to close the deal. On closer inspection, the buyer learns the true value of the goods. Drew can

When a contract mistakenly specifies a crane instead of a forklift, a court could reform the contract to reflect the parties' original intent as to the equipment.

Sparkling Jewelers breaches its lease with Town Mall and vacates the premises six months before the end of the term. In some states, the mall would be required to