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Exam 18: Contract Remedies

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Question 31

True/False

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At its discretion, a court of equity may grant an injunction against breach of a contractual duty when damages for a breach would be inadequate.

A) True
B) False

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Question 32

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

A) the contract is disaffirmed.
B) there are delays in exercising the power.
C) the party lacks contractual capacity.
D) the rights of third parties are terminated.

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

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Question 33

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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:

Eve agrees to sell her boutique to Shelley for $150,000. Shelley spends $60,000 on inventory and fixtures for the store, but then Eve repudiates the contract. Shelley is able to sell the inventory and fixtures for $45,000. Since Shelley cannot establish her lost profits with reasonable certainty, discuss what damages she should seek for Eve's breach of contract.

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?

When will a court enforce a liquidated damage clause? When will a court refuse to enforce one?

Courts of equity generally will not grant specific performance of contracts for personal services.

a. When is specific performance available to enforce a contract? b. Under what circumstances will a court grant specific performance to enforce a contract involving personal services? c. What remedy did the court award in the Madison Square Garden case? Explain why the court chose this remedy.

The usual remedy for breach of contract is:

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:

A party with the power to avoid a contract may lose that power by being subordinated to the intervening rights of third parties.

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

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

Incidental damages are those that arise directly out of the breach.

If no performance is rendered at all under a contract, then the damages will be the loss of value of the promised performance.

A deceived party may seek a remedy under tort law, contract law, and restitution,  and may be compensated under more than one of these remedies.

Explain consequential damages. Give an example.

Jimmy made a contract to sell his townhouse to Thomas for $180,000. Two days later Jimmy changed his mind after discovering that he could have sold the property to another buyer for an additional $30,000. Thomas sues and asks the court to have the property conveyed to him at the price of $180,000. Thomas is seeking:

A small breach of contract damage amount fixed without regard to the amount of loss is known as:

Bonnie has an employment contract with QualNeed Corporation which includes a clause requiring exclusive personal services.  If Bonnie takes on contract work with QualNeed's primary competitor, she is not breaching her agreement, as long as her status remains as an independent contractor with the competitor.