1 . Which one of these is NOT a legitimate rationale for making damages the primary remedy for breach of contract?

A. It would be economically inefficient to tie up property that is the subject of a lawsuit until the lawsuit is completed.

B. Most contracts were initially seen as commercial arrangements between business people.

C. Historically, courts had no authority to order defendants to do anything except pay money.

D. Plaintiffs are always after money.

2 . In the context of contract law, damages are

A. The physical injuries suffered to a person or property as a result of a breach of contract.

B. The money payable by the defendant for an intentional breach of contract.

C. The collective name for the judicial remedies available for breach of contract.

D. An award of money that is intended to cure a breach of contract.

3 . Expectation damages are equal to

A. The value of the benefit expected minus the costs that would have been expended by the plaintiff to complete the contract.

B. The value of the benefit expected minus the costs of the lawsuit.

C. The best-case scenario for the plaintiff if the contract had been completed.

D. Backward-looking compensation for money that has already been expended by the plaintiff.

4 . In a breach of contract case, will the courts allow a claim for emotional distress?

A. Yes, provided mental security was part of what was contracted for.

B. Yes, without limitation.

C. No, because emotional distress is too difficult to quantify.

D. No, because emotional distress is too remote.

5 . In determining whether liability should be imposed against a defendant, a court is considering whether a reasonable person would have known that the plaintiff's loss might result from the breach of a contract. The judge is most likely applying

A. The intangible loss test.

B. The mitigation test.

C. The remoteness test.

D. The mutuality test.

6 . Dieter entered an agreement with Bernice on December 15th to buy her 1000 shares of ABC Social Media Inc. on January 8th for $27 per share, the exact stock market price for the shares on the day the deal was made. Dieter believed that rumours of some creative initiatives by the company would increase the value of the shares significantly in the short term. Even though the share price had not changed at all by January 8th, Bernice refused to transfer the shares to Dieter on that date as agreed. Dieter held on to the cheque with which he intended to pay for Bernice's shares. In this situation, would it be worthwhile for Dieter to sue Bernice?

A. No, because there is a good possibility that the value of social media stocks will fall before the matter gets to court.

B. No, because if the court uses expectation damage principles Dieter would not get anything if he sued.

C. Yes, because a court would award specific performance and force Bernice to turn over the shares.

D. Yes, because the speculative profit Dieter thought he would make would be reflected in a court's award of expectation damages.

7 . A key difference between reliance damages and expectation damages is that

A. Courts usually award reliance damages but seldom award expectation damages.

B. Reliance damages are imposed to punish a defendant, while expectation damages are a reward for a plaintiff.

C. A plaintiff needs "clean hands" to qualify for reliance damages, while for expectation damages this is not required.

D. Reliance damages are backward-looking, while expectation damages are forward-looking.

8 . Which of the following principles correctly describes a successful plaintiff's right to damages, if both expectation damages and reliance damages are possible?

A. A plaintiff who is eligible for reliance damages is not permitted to claim expectation damages.

B. The plaintiff may generally claim reliance damages or expectation damages, but not both.

C. The plaintiff must claim both expectation damages and reliance damages.

D. A plaintiff who is eligible for expectation damages is not permitted to claim reliance damages

9 . When Bert sold his bait and tackle shop to Henry, it included a term stipulating that Bert would not open a competitive business in the small resort community where the shop was located for a period of eighteen months. As a result, Henry was shocked when Bert and his son opened a new bait shop right across the road a month later, just as the peak fishing season was set to begin. Henry tried to make his business the preferred destination through the fishing season with sales and advertising, but it was obvious that he had lost substantial income to Bert. Bert had loyal customers among the seasonal residents and tourists. In this situation, Henry

A. Is restricted to reliance damages.

B. Should sue Bert and ask the court for an account of profits from Bert.

C. Has missed the limitation period and so has lost his right to sue.

D. Can expect to be awarded nominal damages.

10 . A court may be asked to compensate a plaintiff by way of an account for profits when

A. The claimant is required to bear responsibility for having made a poor deal.

B. A court ordered the defendant to not do something prohibited by the contract.

C. A genuine attempt to estimate the value of the loss has been completed.

D. The defendant breached a contract to gain a substantial benefit for the defendant.

11 . What term is used to describe a symbolic damage award meant to acknowledge the plaintiff suffered a wrong when the defendant broke a promise?

A. Expectation damages.

B. Aggravated damages.

C. Liquidated damages.

D. Nominal damages.

12 . Punitive damage awards

A. Are rare because the Supreme Court of Canada has set strict criteria for their use.

B. Are used by the courts for the same purpose as nominal damages.

C. Are available only when there is a penalty clause in a contract.

D. Are used in tort cases, but not in contract cases.

13 . One disadvantage of the use of liquidated damage clauses is that

A. They are enforceable, while penalty clauses are not.

B. They often eliminate the need for a lawsuit.

C. There is no need for a judge to try to assess the actual loss.

D. The innocent party is only able to recover the amount specified in the clause, even if the actual loss is greater

14 . If the court is hearing a matter involving breach of a contract that contained a liquidated damages clause, then

A. The liquidated damages will be awarded only if more than the actual loss suffered.

B. The contract contains an estimated value of the loss caused by the breach.

C. The claim will be denied because courts deal with actual losses, not estimated losses.

D. The liquidated damages will be awarded only if less than the actual loss suffered.

15 . Patrick and Minh were employees of a company that installed ventilation systems. When they started, both had signed an employment contract. The contract included a non-competition clause, for two years within the same city if they left their employment, and also a clause promising not to solicit their employer's customers if they left. Patrick and Minh did in fact leave to set up their own ventilation installation company in the same city, and they started calling the customers they knew from their previous job. What remedy is their employer likely to seek to enforce the non-competition and non-solicitation clauses?

A. A criminal charge for breach of confidentiality.

B. Specific performance.

C. Rescission.

D. An injunction.

16 . Mutuality as an element of a specific performance remedy means that

A. If it can be awarded to a party, it can also be awarded against that party.

B. If there is a damages award, then specific performance can also be ordered.

C. Both parties agree that specific performance is the appropriate remedy.

D. It can be awarded if there is a contract clause stating that specific performance is an available remedy.

17 . Exclusion clauses

A. Cannot be enforced unless the contracting party had independent legal advice.

B. Are always effective as long as the contracting party has had an opportunity to read it.

C. Can limit liability only if a contract is still in force.

D. Can limit liability even if a contract has been discharged for breach.

18 . Which one of the following statements about exclusion clauses is FALSE?

A. Exclusion clauses should generally be brought to the customer's attention.

B. Exclusion clauses will generally be interpreted to protect the business that wrote it.

C. Exclusion clauses may be set aside if they are significantly unfair.

D. Exclusion clauses serve the useful role of allocating risk among parties to a contract.

19 . Tom has gone to small claims court to seek restitution for unjust enrichment, which means he is asking the court to have the defendant

A. Give him back what was received from him.

B. Give him what was gained by another's wrongdoing.

C. Give him back what he lost.

D. Give him what he expected to get.

20 . Smith and Jones LLP was Anastasia's landlord for years. She lives in an apartment located above their law offices. Smith and Jones LLP recently sold the building to Purvis Property Management Limited and notified Anastasia that PPML would be her new landlord. Out of habit, Anastasia mistakenly dropped this month's rent cheque off in the Smith and Jones LLP office and the cheque was cashed by the office administrator. In this circumstance

A. The law firm could retain the money because they had done all they could to provide proper notification to Anastasia.

B. Anastasia won't have to do anything. PPML could sue Smith and Jones LLP directly to recover the rent.

C. Anastasia's actions would justify PPML in terminating her tenancy.

D. Anastasia could recover the money from the law firm because it would be unjust enrichment for them to keep it and restitution is the remedy.