5.Bob contracts to work for Central Construction Corporation (CCC) dur-ing July for $4,500. On June 30, CCC cancels the contract. Bobdeclines a similar job with Design Builders, Inc., which would havepaid $4,000. Bob files a suit against CCC. As compensatory damages,Bob can recover a.$4,500.b.$4,000.c.$500.
CHAPTER 18: BREACH OF CONTRACT AND REMEDIES 181 d.$0.ANSWER:C PAGE: 345 TYPE: N 6.Kris contracts to work exclusively for Local Company during May for$5,000. On April 30, Local cancels the contract. Kris finds another jobduring May but earns only $3,000. Kris files a suit against Local. Ascompensatory damages, Kris can recover PAGE: 345 TYPE: N 7.Earl holds 1,000 pounds of perishable fruit in storage for Fresh FoodCorporation. Fresh Food does not pay for the storage. Earl sells thefruit to Green Grocery Stores, Inc. This sale represents PAGE: 345 TYPE: = 8.Amy contracts to sell a residential duplex to Burt. The contract pro-vides that if Amy does not close the deal by September 15, she mustpay Burt one-half of the duplex’s sale price. This provision is notenforceable because it is PAGE: 345 TYPE: N 9.First Properties, Inc., negotiates with Great Management Corporationto include a liquidated damages clause in their contract. The clause isenforceable if, when the parties enter into the contract, estimatingthe potential amount of damages on a breach is
182 TEST BANK 2—UNIT THREE: CONTRACTS AND E-CONTRACTS a.a reasonable possibility.b.difficult.c.nearly impossible.d.not possible.ANSWER:A PAGE: 345 TYPE: N 10.John owned an apartment and leased it to Steve. The leaseagreement was for one year. After ten months, Steve told John thathe was moving out of the apartment immediately. When John wentto the apartment, he saw that Steve had put holes in the walls,ruined the carpets, and damaged the wiring. John was told thatrepairs would take at least two months. John sued Steve for damageto the apartment and for the rent payments for the last two monthsof the lease. Steve argues that the remaining rent owed should beoffset by John’s duty to find another tenant and mitigate hisdamages. The court would most likely rule in favor of PAGE: 345 TYPE: N
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