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Exam 12: Contractual Remedies

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Question 21

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Imran contractually agreed to sell a widget to Juanita for a total price of $200 000.Juanita paid $50 000 immediately and promised to pay the remainder upon delivery.However,Imran refused to ever deliver a widget.Between the time that the contract was created and the time of breach,the value of the widget dropped from $200 000 to $100 000.Juanita nevertheless is entitled to get back her payment of $50 000.

A) True
B) False

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Question 22

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What are nominal damages? Why is it sometimes dangerous to sue for breach of contract and claim nominal damages?

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Nominal damages are awarded in very smal...

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Question 23

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Dina entered into a contract with George.She agreed to decorate his office and he agreed to pay her $10 000.She spent $3000 performing her obligations under the agreement.He has paid her $2000,but refuses to pay any more.Under the concept of reliance damages,George must now pay $8000 to Dina.

Manny contractually agreed with Akio Inc to present a series of ten lectures to that company's employees.The total price of $5000 was to be paid after the last lecture.The work turned out to be far more complicated and far more expensive than Manny first expected.He nevertheless carried on with the agreement because he did not want to damage his reputation for reliability and professionalism.Manny spent $12 000 preparing and delivering five lectures.It would have cost the same amount to prepare and deliver the remaining lectures.At that point,however,Akio breached the contract and prevented Manny from completing the contract.Which of the following statements is TRUE?

Eleni agreed to act as an investment adviser for Gnuhigh Ltd.After completing her first project for Gnuhigh,she asked for payment of $10 000,as calculated under the terms of the parties' agreement.Gnuhigh refused to pay.In support of its position,it pointed to the Financial Industry Standards Act,which says that a contract for investment advice is unenforceable unless it is registered with a government official.The agreement between Eleni and Gnuhigh is not registered.Eleni is most likely entitled to receive

Yuri enters into a contact for the purchase of an antique table for $300.He has a buyer willing to pay $2000 for the same table.Yuri pays before receiving the table.The seller breaches the contract when he realizes the table is worth more.Yuri can recover

Mountain City Construction Company (MCCC) contractually agreed to build a recreational complex for Valley City.The City agreed to pay $2 million upon completion of the project.Shortly after starting the project,MCCC realized that it had entered into a very bad bargain.It would have to provide $4 million in services and materials in order to build the recreational complex.It decided to nevertheless fulfill its obligations.After MCCC had finished 75 per cent of the project,at a total cost of $3 million,a new mayor was elected.True to the new mayor's campaign promise,the City immediately locked MCCC out of the work site.The City then hired Valley City Construction Incorporated (VCCI) to complete the recreational complex at a cost of $1 million.The City refuses to pay anything to MCCC.MCCC therefore has discharged the contract and taken its case to court.A judge most likely would award

On October 15,Madeleine contractually agreed to sell a widget to Hugh.The total price was $20 000.Hugh paid $4000 immediately and promised to pay the remainder upon delivery.Madeleine delivered the widget to Hugh on November 2,as required by the contract.He refused to accept it,however,because its market value had dropped from $20 000 to $10 000.Madeleine is entitled to receive $6000 in expectation damages.

An intangible loss

Which of the following statements is TRUE?

On September 1,Mira agreed to sell a shipment of beans to Marco for a total price of $20 000.He paid the price immediately and the contract required her to make delivery on December 1.She failed to do so.By that time,the market value of the beans had increased to $27 000.Although Marco could have arranged to receive a shipment of beans from another supplier almost immediately,he actually waited three weeks before entering into such a contract with Hector.By that time,the market value of the beans had increased to $30 000.Marco is entitled to expectation damages of $30 000 as long as a reasonable person could have predicted the full price increase on December 1.

"The idea of compensation usually means that the plaintiff is entitled to get back something that it previously enjoyed,but that it lost because of the defendant's bad conduct.Although they are considered compensatory,expectation damages do not work in exactly the same way." Explain the meaning of that statement.Provide a justification for awarding expectation damages to the victim of a breach of contract.

A distinction is often drawn between cost of cure damages and loss of value damages.Which of those possibilities is closer to the remedy of specific performance? Explain your answer.

In the context of contractual damages,there is only one measure of relief.

As a general rule,punitive damages will not be awarded for a breach of contract unless

Millennium Properties enter into a contract to purchase land from Oxford Management.Because Millennium wants to avoid the risk of a timely and complicated lawsuit in the case of a breach of contract,they input a clause stating the following,"If either party breaches their side of the agreement,the innocent party is entitled to $650,000." Following this,Oxford breaches the agreement and it costs Millennium $1.2 million.What action can Millennium take?

The monetary value of expectation damages may be affected by

On May 1,George contractually agreed to purchase a painting from Laura for $50 000.On that date,George prepaid half of the purchase price and promised to pay the other half upon delivery.Laura promised to deliver the painting to George on June 1.In anticipation of receiving the painting,George spent $10 000 building a special display case in his home.On May 15,the artist who created the painting died and the value of the painting immediately increased to $75 000.Laura therefore refused to deliver the painting to George.George is entitled to receive

Shinji contractually agreed to record a concert for Keith.The concert was to occur on November 8 and Keith was to pay a price of $10 000 on the same day.On October 15,Shinji informed Keith that he would not be able to record the concert.On November 2,Keith entered into a contract with his good friend,Manfred.Under the terms of that agreement,Manfred was required to record the concert on November 8 and Keith was required to pay $25 000.The evidence indicates that Keith could have easily hired someone other than Manfred for $17 000.Which of the following statements is TRUE? A court would probably order Shinji to pay Keith

Susan contractually agreed to sell a particular computer to Davor for $5000.Although Davor paid the money,Susan refuses to actually give him the computer.A court will likely award monetary damages,rather than specific performance,to Davor because