East Mississippi Community College

ECON 2123

Chapter 20-BREACH OF CONTRACT AND REMEDIES

TRUE/FALSE

1)When one party breaks the contract, the contract is said to be breached.

2. When a party expressly declares before the time for performance arrives that the contract will not be performed, such a declaration is called an anticipatory repudiation.

3. An anticipatory repudiation must be clear, absolute, and unequivocal.

4. A waiver of a breach may be either express or implied.

5. If there is a breach of contract, the law requires that the other party terminate the contract and bring a lawsuit.

6. Whether there has been a waiver is a question of fact.

7. When a party waives compliance with one provision of a contract, the other party may thereafter ignore other provisions of that contract.

8. A reservation of rights is an assertion by a party to a contract that even though a tendered performance is accepted, the right to damages for the nonconformity to the contract is reserved.

9. An acceptance with a reservation of right must be in writing.

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 performance is due.

11. The measure of monetary damages when there has been a breach of contract is the sum of money that

will place the injured party in the same position that would have been attained if the contract had been performed.

12. Damages representing annoyance ordinarily may not be recovered in a breach-of-contract action.

13. The normal remedy for breach of contract where the plaintiff has suffered a loss is compensatory damages.

14. An injured party that does not suffer an actual loss from the breach of a contract is entitled to nominal damages.

15. Damages in excess of actual loss, imposed for the purpose of punishing or making an example of the defendant, are known as compensatory damages.

16. Punitive damages are generally recoverable in contract actions.

17. Consequential damages are those that necessarily flow from the breach.

18. Consequential damages may not be recovered, even if they were within the contemplation of the parties at the time of contracting.

19. Only direct losses from a breach of contract may be recovered by an injured party.

20. If one party to a contract breaks the contract, the other party generally is under a duty to stop any further performance to avoid sustaining greater damages.

21. A party must mitigate damages at all costs.

22. When one party commits a non-material breach of contract, the other party may rescind the contract.