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23 terms

Business Law Chapter 18

Breach of Contract and Remedies
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Incidental Damages
Expenses that are caused directly by a breach of contract (incurred to obtain performance from another source
Consequential Damages
Foreseeable damages that result from a party's breach of contract
Nominal Damages
When no actual damage or financial loss results from a breach of contract, and only a technical injury is invovled
Mitigation of Damages
The innocent, injured party is held to a duty to reduce the damages that they suffer
Restitution
When rescinding a contract, each party must return the goods, property, or funds previously conveyed
Specific Performance
Performance of the act promised in the contract
Reformation
Equitable remedy used when the parties have imperfectly expressed their agreement in writing, allows the court to rewrite the contract to reflect the parties true interactions
Waiver
Right to require satisfactory and full performance
Punitive damages are recoverable in contract law for an intentional breach of contract.
false
Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. In some states, Sunny would have to
make reasonable efforts to relet the premises to mitigate damages.
Damages are designed to punish a breaching party and deter others from similar conduct.
false
A contract may include a clause stating that no damages can be recovered for a certain type of breach
true
Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch. Hollis breaches the contract. Grady's normal remedy is
specific performance.
Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000. Eastside fails to go through with the deal on the agreed date, when the market price of the land is $17,000. DA may recover
2,000
SFX Paintball Games, Inc., and Truck & Trailer Delivery Corporation sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is
a liquidated damages clause.
Clear Creek Corporation enters into a contract with Brightside Management Associates to manage and maintain Clear Creek's apartment complex. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is
a limitation-of-liability clause.
Fidelio Corporation enters into a contract with Equi Insurance, Inc., to obtain health insurance for Fidelio employees. Equi breaches the contract. If Fidelio is awarded compensatory damages, the purpose would be to
provide Fidelio with funds for its loss of the bargain.
Most parties settle their lawsuits for damages or other remedies prior to trial.
true
Vacation Vistas, Inc., agrees to sell certain acreage to Umiko, who intends to develop a destination resort. Vacation Vistas repudiates the deal. Umiko sues Vacation Vistas and recovers damages. She can now obtain
nothing more
Office Accounting, Inc., hires Perry to repair a computer on site for $400, but Perry does not show up as agreed. Office Accounting hires Raul to do the job for $350. Office Accounting may recover from Perry
nominal damages
Ordinarily, the remedy for a seller's breach of a contract for a sale of real estate is damages.
false
Consumer Credit Union pays Derby $10,000 to design an ad campaign. The next day, Derby tells the credit union that he has accepted a job in Boston and cannot design the campaign. As compensatory damages, the credit union can recover
10,000
Refined Commodities, Inc., agrees to deliver ten tons of sheet metal to Select Builders Corporation. The agreement states that delivery is to be within "3" days, although the parties intend "30" days. Refined cannot convince Select to amend the contract. Refined should seek
reformation