b special foreseeable damages that compensate for a loss that does not directly

B special foreseeable damages that compensate for a

This preview shows page 317 - 320 out of 368 pages.

b. special, foreseeable damages that compensate for a loss that does not directly or immediately result from a breach of contract. c. damages that compensate a party for actual losses.
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d. damages that punish a breaching party. ANS: a. Incorrect. These are nominal, not consequential, damages. b. Correct. Such special damages are called consequential damages. c. Incorrect. These are compensatory damages. d. Incorrect. These are punitive damages. 9. Liquidated damages may be defined as: a. damages to compensate a small technical harm. b. an unspecified dollar amount payable in case of breach of contract. c. a punishment for a default on a contractual term. d. a specific dollar amount to be paid in the event of a future default or breach of contract. ANS: a. Incorrect. This would be nominal damages. b. Incorrect. Liquidated damages involve a specific dollar amount. c. Incorrect. This kind of punishment is a penalty, not liquidated damages. d. Correct. Liquidated damages involve a specific dollar amount to be paid in the event of a future default or breach. 10. Suppose that Jennifer agrees to tutor Sal’s children during the summer. After one week, Jennifer decides that she can’t handle the children and refuses to tutor them any longer. If Sal sues Jennifer for specific performance, a court would likely: a. refuse to order specific performance of the contract because it is a contract for personal services. b. grant Sal’s request, because Jennifer breached her contract. c. grant Sal’s request, but only if Sal could not find another tutor. d. require Jennifer to mitigate her damages. ANS: a. Correct. Courts refuse to enforce such contracts because to do so amounts to a type of involuntary servitude, which is contrary to the public policy expressed in the Thirteenth Amendment to the Constitution. b. Incorrect. Courts refuse to enforce such contracts because to do so amounts to a type of involuntary servitude, which is contrary to the public policy expressed in the Thirteenth Amendment to the Constitution. c. Incorrect. Even in this situation, a court would refuse to enforce the contract because to do so amounts to a type of involuntary servitude, which is contrary to the public policy expressed in the Thirteenth Amendment to the Constitution.
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d. Incorrect. Sal has requested the equitable remedy of specific performance, not damages. e. Aidan and Oscar form a contract under which Oscar is to perform gardening services for Aidan for one year. For six months, Oscar performs the services, and Aidan pays him. Aidan's mother, Mary, becomes ill and is unable to care for her garden. The three agree that Oscar will no longer care for Aidan's garden but instead will care for Mary's garden for the remainder of the year. The new contract - b. is a novation. f. Anticipatory repudiation can occur when: - c. Sharp fluctuations in market prices make it extremely difficult to perform as promised.
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