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Exam 18: Contract Remedies

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Question 21

Multiple Choice

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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 department 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:

A) get her money back since Harry's representation was fraudulent.
B) not get her money back since she should have investigated the facts about the ring more carefully.
C) get her money back since she is a good faith purchaser of merchandise.
D) not get her money back since she has affirmed the contract by taking an unduly long time to disaffirm.

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

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Question 22

Multiple Choice

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The process whereby a court "rewrites" or "corrects" a written contract to make it conform to the true intentions of the parties is:

A) injunction.
B) reformation.
C) specific performance.
D) rescission.

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

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Question 23

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

David enters into a contract to give Edward the right of first refusal to purchase 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:

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

When an injured party is required to elect remedies, which of the following would be mutually exclusive?

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

Answer the following: a. When will a court specifically enforce a contract? b. Under what circumstances will a court specifically enforce a contract involving personal services? c. What remedy did the court award in the Madison Square Garden case? Why did the court award this remedy?

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

Equitable remedies are available any time the plaintiff chooses them over money damages.

Specific performance is the usual remedy for breach of contract.

An action to recover damages for breach of contract may be maintained only if the plaintiff has sustained or can prove an injury or loss resulting from the breach.

In relation to damages, the test of foreseeability is subjective.

If the parties to a contract stipulate an amount that will be paid in the event of a breach (a liquidated damages clause), the courts will always enforce it.

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 contracted 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 rented it to someone else. He drove all over town trying to borrow another, but he 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 from the rental company. Explain.

The purpose of reliance damages is to place the injured party in a position as good as he would have held had there been no contract.

Explain consequential damages. Give an example.

A contractor and Buckingham, Inc. have a contract, which calls for the contractor to build a building with the completion of it by June 15. If the building is not completed by that date, the contract calls for the contractor to pay $100 per day in damages. The $100 per day is:

The basic remedy for misrepresentation is restitution.

UCC "Election of Remedies" rules would require the aggrieved party to choose one remedy he wants to pursue and forego the others.