TJ_Comp 20_TB_Ch20

TJ_Comp 20_TB_Ch20 - Chapter 20BREACH OF CONTRACT AND...

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Chapter 20—BREACH OF CONTRACT AND REMEDIES TRUE/FALSE 1. When one party breaks the contract, the contract is said to be breached. ANS: T MSC: AACSB Analytic 2. When a party expressly declares that performance on a contract will not be made when required, such a declaration is called an anticipatory repudiation. ANS: T MSC: AACSB Analytic 3. An anticipatory repudiation must be clear, absolute, and unequivocal. ANS: T MSC: AACSB Analytic 4. A waiver of a breach may be either express or implied. ANS: T MSC: AACSB Analytic 5. If there is a breach of contract, the law requires that the other party terminate the contract and bring a lawsuit. ANS: F MSC: AACSB Analytic 6. Whether there has been a waiver is a question of law for the court to determine. ANS: F MSC: AACSB Analytic 7. When a party waives compliance with one provision of a contract, the other party may thereafter ig- nore other provisions of that contract. ANS: F MSC: AACSB Analytic 8. Repeated breaches and waivers may be construed as a modification of the contract. ANS: T MSC: AACSB Analytic 9. An acceptance with a reservation of right must be in writing. ANS: F MSC: AACSB Analytic 10. A party injured by the other party's anticipatory repudiation of a contract has the right to bring suit at the time of the repudiation, and before the date on which that performance is due. ANS: T MSC: AACSB Analytic 11. Damages recoverable in a breach-of-contract action are designed to place the injured party in the same position that would have been attained if the contract had been performed. ANS: T MSC: AACSB Analytic
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12. Damages representing annoyance ordinarily may not be recovered in a breach-of-contract action. ANS: T MSC: AACSB Analytic 13. The normal remedy for breach of contract where the plaintiff has suffered a loss is compensatory dam- ages. ANS: T MSC: AACSB Analytic 14. An injured party that does not suffer an actual loss from the breach of a contract is entitled to nominal damages. ANS: T MSC: AACSB Analytic 15. For damages to be recovered for breach of contract, the exact amount of the loss must be established with mathematical certainty. ANS: F MSC: AACSB Analytic 16. Punitive damages generally are recoverable in contract actions. ANS: F MSC: AACSB Analytic 17. Consequential damages are those that necessarily flow from the breach. ANS: F MSC: AACSB Analytic 18. Consequential damages may not be recovered, even if they were within the contemplation of the parties at the time of contracting. ANS: F MSC: AACSB Analytic 19. Only direct losses from a breach of contract may be recovered by an injured party. ANS: F MSC: AACSB Analytic 20. If one party to a contract breaks the contract, the other party generally is under the duty to stop any fur- ther performance to avoid sustaining greater damages. ANS: T MSC: AACSB Analytic 21. A party must mitigate damages at all costs.
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