Question 1

Busby contracts to build a house for Connell. Busby finishes approximately half of the house and quits. Connell files suit against Busby. Which remedy is not available?

Accepted Answer

Specific performance is not an available remedy in this situation because the contract is incomplete and therefore cannot be specifically enforced. Specific performance is only available for contracts that are fully formed and capable of being specifically enforced. The other remedies listed may still be available to Connell, depending on the specific circumstances and terms of the contract.

Question 2

What principle did the court apply in the case of Madison Square Garden Corp., Ill. v. Carnera ?

Accepted Answer

The court applied the principle that when damages are not adequate, an injunction may be used to enforce a negative covenant regarding exclusive services that are unique and extraordinary. This allowed Madison Square Garden to obtain an injunction prohibiting Carnera from acting as a professional boxer for anyone other than Madison Square Garden.

Question 3

Barbara, an antique dealer, intentionally misrepresents the value of an antique chest of drawers, as $6,000 when she has reason to know the value is considerably less. Margaret agrees to buy it for $5,500. It is worth $2,500. In a state that uses the "out-of-pocket" rule, Margaret's damage award would be:

Accepted Answer

The "out-of-pocket" rule states that the damages awarded are the difference between the amount paid and the actual value of the item. In this case, Margaret paid $5,500 but the actual value was $2,500. Therefore, her damages are $3,000 ($5,500 - $2,500).

Question 4

Contract damages that put the injured party in as good a position as if the other party had performed are:

Accepted Answer

Compensatory damages are intended to compensate the injured party as if the other party had fully performed the contract. The damages are intended to put the injured party in the same position they would have been in if the contract had been performed as agreed upon.

Question 5

In which of the following situations will a court grant specific performance?

Accepted Answer

Specific performance is a court-ordered remedy that requires a party to perform a contractual obligation according to the terms of the agreement. This remedy is usually granted in situations where monetary damages are inadequate to compensate the injured party. In the case of breach of contract for the sale of real property, specific performance may be granted since every piece of real property is unique. Similarly, where goods are unique or rare, specific performance may be granted as well. However, in contracts for personal services, courts generally do not order specific performance as it would not be feasible to compel someone to provide services against their will.

Question 6

Bob's brother, Steve, planned to visit over Labor Day weekend. Together they planned to build a deck in Bob's backyard. Bob ordered the lumber, concrete, nails, and other supplies to be delivered on Friday. He also arranged to rent a saw for the weekend (Sat., Sun., and Mon.) at a cost of $20 a day. When he went to pick up the saw, the store had already rented it. He drove all over town trying to borrow another but could only get one for Sunday, Monday, and Tuesday at a cost of $50 per day. Because they couldn't work on Saturday without a saw, Bob had to hire Mac at a cost of $80 to work with him on Tuesday and, of course, Bob had to take off from work. Calculate the damages to which Bob is entitled. Why? Explain.

Accepted Answer

The answer of Bob's brother, Steve, planned to visit over...

Question 7

Scott, a minor, sells his digital camera to Megan, who then sells it to Sherry. Under these circumstances:

Accepted Answer

If Sherry is a good faith purchaser for value and she buys the camera before Scott elects to rescind, no rescission is permitted under the rules of the Uniform Commercial Code. This is known as the good faith purchaser defense. Megan, however, did not have title to the camera since Scott, being a minor, could avoid the contract at any time. Therefore, Megan gave Sherry a voidable title, which means that Sherry's title is valid against Megan but not against Scott. However, since Sherry is a good faith purchaser for value, she can keep the camera and Scott has no recourse against her.

Question 8

Damages for reliance include expenses for:

Accepted Answer

Damages for reliance are meant to put the non-breaching party in the position they would have been in if the contract had never been formed. This includes expenses that the non-breaching party incurred in preparing to perform the contract. Lost profits would be covered under expectation damages and injury to the person would fall under consequential damages. Punishment of the breaching party would be covered under punitive damages, which are not typically awarded in contract cases.

Question 9

In the case of Hadley v. Baxendale , the plaintiff was seeking damages for:

Accepted Answer

The plaintiff in Hadley v. Baxendale was seeking damages for lost profits resulting from the defendant's failure to deliver a broken steam engine crankshaft for repair in a timely manner. The court ultimately held that the defendant could only be liable for damages that were foreseeable at the time the contract was made, and that lost profits were not foreseeable in this case.

Question 10

Howard needs a truck to pull a 2,000-pound trailer. Gordon tells Howard, "My truck will pull a 2,000 pound trailer with ease." Relying on Gordon's statement, Howard buys the truck, but it will not pull a 2,000-pound trailer. If Gordon did not intend to deceive and Howard sues for nonfraudulent misrepresentation, he can ask for:

Accepted Answer

Nonfraudulent misrepresentation occurs when a party provides false information without the intent to deceive. In this case, Gordon provided false information about the truck's capacity, and Howard relied on it to make a purchase. Howard can recover out-of-pocket damages, which are the difference between the amount paid for the truck and its actual value. He can also recover consequential damages if he suffered additional financial losses as a result of the truck's inability to pull the trailer. Therefore, option B is the best choice.

Question 11

A power of avoidance held by a party may be lost if:

Accepted Answer

All of the options listed can potentially cause a power of avoidance to be lost. If the party affirms the contract, they are essentially accepting the terms and giving up any right to avoid the contract. Unreasonable delays in exercising the power may be seen as a waiver of the right, suggesting that the party has accepted the contract. Additionally, if third parties become involved and have rights that would be impacted by the avoidance, the party may not be able to avoid the contract without violating the rights of those third parties.

Question 12

Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500. When Carolyn discovers that her cousin wants it too, she breaks the contract with Marianne. Marianne can ask the court to order:

Accepted Answer

The best choice is specific performance, which would require Carolyn to fulfill her end of the contract and sell the antique lace tablecloth to Marianne as they agreed. Injunctive relief would only prevent Carolyn from selling the tablecloth to her cousin, but it would not necessarily require her to sell it to Marianne. Restitution and equitable rescission would be unlikely remedies in this situation since Marianne did not suffer any financial harm, and the contract was broken before any money was exchanged.

Question 13

Lynne agrees to buy Harriette's farm for $200,000 and puts $20,000 down. Then Lynne learns she is allergic to hay and repudiates the contract. If Harriette can sell the farm in a good faith transaction for $190,000 a month later, she may:

Accepted Answer

Since Lynne repudiated the contract, Harriette can keep the down payment as liquidated damages. However, since Harriette was able to sell the farm in good faith within a month, she cannot keep the full amount of the down payment. Instead, she can keep $10,000 (which is 5% of the total purchase price) as allowed under the doctrine of partial breach.

Question 14

To accomplish the basic purposes of contract remedies, which of the following limitations have not been imposed upon monetary damages?

Accepted Answer

The limitation of restitution has not been imposed upon monetary damages. Restitution is a remedy that requires the breaching party to return any property or money that was wrongfully obtained. Monetary damages, on the other hand, are intended to compensate the non-breaching party for their losses, but do not require the breaching party to actually return any property or money.

Question 15

David enters into a contract giving Edward the right of first refusal on a tract of land owned by David. David subsequently offers the land to Fred without first offering it to Edward. An appropriate remedy for Edward to seek would be:

Accepted Answer

The right of first refusal gives Edward the contractual right to be offered the land before anyone else. By offering it to Fred without first offering it to Edward, David has breached the contract. An injunction would be an appropriate remedy to prevent David from selling the land to Fred and require him to offer it to Edward first. Liquidated damages, reformation, and punitive damages are not appropriate remedies in this situation.

Question 16

Vladimir entered into a contract to buy Daniel's collection of rare stamps. Vladimir mailed payment of $10,000 for the stamps to Daniel, but now Daniel tells Vladimir, "I'll never part with these stamps." Are the following remedies available to Vladimir?

Accepted Answer

Restitution is available because Vladimir can seek the return of his $10,000 since Daniel refuses to complete the sale. Specific performance is also available because the stamps are unique, and monetary damages may not suffice to put Vladimir in the position he would have been in had the contract been performed.

Question 17

Bartow signed a contract to coach baseball for Washington High for a period of three years. After two years he is offered and accepts an assistant coaching position at State University. Contract law will not allow Washington High to ask for:

Accepted Answer

The answer of Bartow signed a contract to coach baseball...

Question 18

In which of the following situations is restitution available as a remedy?

Accepted Answer

Restitution is a remedy designed to prevent unjust enrichment. It is available in all the situations mentioned: as an alternative remedy for a party injured by breach (A), for a party in default under certain conditions (B), and for a party who cannot enforce the contract due to the statute of frauds (C). This ensures that no party unjustly benefits at the expense of another.

Question 19

Harry said to Marge, "I have a ring once owned by Marilyn Monroe. Would you like to buy it for $500?" Marge pays for the ring, but the next day a friend tells her that Harry had recently purchased the ring at a local store. Marge enjoys wearing the ring and wears it constantly for twelve months. Finally, she goes to Harry and says, "Here is the ring you lied about. Give me my $500." Most likely Marge will:

Accepted Answer

Marge is unlikely to get her money back because she affirmed the contract by keeping and using the ring for an extended period (twelve months) before attempting to rescind the deal based on Harry's misrepresentation.

Question 20

Which of the following is correct with respect to election of remedies?

Accepted Answer

A person who seeks an injunction may also seek incidental damages for the breach, as these remedies can be complementary rather than mutually exclusive.

Quiz 18: Contract Remedies