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Mann_BLRB 9_TB_Ch18

Business Law and the Regulation of Business

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Chapter 18—Contract Remedies TRUE/FALSE 1. Sean breaches an agreement in his employment contract with Inmett Corporation by also working for Inmett's major competitor. Sean's promise to Inmett of his exclusive personal services may be enforced by injunction. ANS: T MSC: AACSB Analytic 2. To fully compensate a plaintiff for losses suffered for a breach of contract, punitive damages are al- ways awarded. ANS: F MSC: AACSB Analytic 3. A liquidated damage clause that represents a reasonable approximation of the damages where the actu- al amount would be very difficult to determine will usually be upheld. ANS: T MSC: AACSB Analytic 4. Equitable remedies result in money awards to the plaintiff. ANS: F MSC: AACSB Analytic 5. Consequential damages include lost profits and injury to person or property. ANS: T MSC: AACSB Analytic 6. Equitable remedies are available any time the plaintiff chooses them over money damages. ANS: F MSC: AACSB Analytic 7. Restitution requires a return of value to the aggrieved party. ANS: T MSC: AACSB Analytic 8. The costs or losses an injured party avoids by not having to perform are not figured in the computation of damages. ANS: F MSC: AACSB Analytic 9. The remedy for misrepresentation is specific performance of the contract. ANS: F MSC: AACSB Analytic 10. Where a contract is unenforceable because of the statute of frauds, a party may recover the benefits conferred on the other party in reliance on the contract. ANS: T MSC: AACSB Analytic 11. 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.
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ANS: F MSC: AACSB Analytic 12. Punitive damages are not always awarded as a deterrent in breach of contract cases. ANS: T MSC: AACSB Analytic 13. Incidental damages include lost profits and injury to person or property resulting from defective per- formance. ANS: F MSC: AACSB Analytic 14. The majority of states allow the injured party who has been induced to enter into a contract by fraud to recover only "out-of-pocket" damages equal to the difference between the value of what she has re- ceived and the value of what she has given for it. ANS: F MSC: AACSB Analytic 15. Where a party has been induced by fraud to enter a contract, the Restatement of Torts permits the in- jured party to recover out-of-pocket damages but expressly excludes recovery of benefit-of-the-bargain damages. ANS: F MSC: AACSB Analytic 16. Specific performance is an equitable remedy. ANS: T MSC: AACSB Analytic 17. Courts of equity will grant specific performance of contracts for personal services. ANS: F MSC: AACSB Analytic 18. Under the rule in Hadley v. Baxendale , only damages foreseeable at the time of entering into the con- tract can be recovered. ANS: T MSC: AACSB Analytic 19. Specific performance is the usual remedy for breach of contract.
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