Question 1 (1 point)

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Owner contracts to have Painter paint Owner's house in a color combination that will highlight its Victorian architecture. Owner is very specific about the colors to be used, which parts of the house will be painted which colors, and the use of Brand A paint with a 15-year guarantee. When the painting was nearly done, Owner discovered that Painter had used Brand B paint. At trial, Painter shows that Owner's colors were used, that the parts of the house were painted with the colors Owner required, and that Brand B paint had a 15-year guarantee. The result at trial:

Question 1 options:

a)	Owner will prevail, as this represents a material breach; Owner's damages will be the cost of repainting the house with Brand A paint.

b)	Owner will prevail, as this represents a minor breach; Owner's damages will be the cost of repainting the house with Brand A paint.

c)	Owner will prevail, as this represents a minor breach; Owner's damages will be nominal or nothing.

d)	Painter will prevail; because Owner's damages will be nominal or nothing, Painter is not in breach.

Question 2 (1 point)

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The theory of damages for completed performance is based on:

Question 2 options:

a)	the non-breaching party having earned the fair value of the performance rendered.

b)	the non-breaching party having earned the agreed price.

c)	punishing the breaching party.

d)	preventing unjust enrichment.

Question 3 (1 point)

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Rental provides tables, chairs, tablecloths, and centerpieces twice a year for School's dances. The day before one of the dances, School tells Rental not to bring the tables, etc., because the dance has been cancelled. Rental's damages will factor in: I. the costs Rental incurred for the non-reusable centerpieces. II. the price School would have paid to Rental. III. the employee wages Rental will not have to pay for delivering, setting up, and taking down the tables, etc. IV. the free advertising that Rental would have received from having its logo visible at School during the dance.

Question 3 options:

a)

I and II.

b)	I, II, and III.

c)	II, III, and IV.

d)	I, II, III, and IV.

Question 4 (1 point)

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Developer agrees to buy land from Seller for $200,000, on the condition that Developer can get a mortgage from Bank, and makes a $20,000 down payment. Developer has the land surveyed (at a cost of $1,000) and pays $500 in application fees to Bank. Developer hires an appraiser for $500 (required by Bank for the mortgage), who determines the land is worth $400,000. Seller repudiates the contract and refunds Developer's down payment. If Developer sues Seller for damages for breach, Developer will recover:

Question 4 options:

a)	the cost of the application and the survey.

b)	the cost of the appraisal and the survey.

c)	the cost of the application, the appraisal and the survey.

d)	nothing, as the lost profits from Developer's future development of the land are speculative.

Question 5 (1 point)

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Factory contracts with Supplier to purchase and install a large piece of machinery. The contract contains this provision "buyer is responsible for ensuring foundations are adequate to support machinery." After upgrading the foundation, Factory receives notice that Supplier has discontinued the model Factory ordered and is cancelling the order. Factory is able to secure substitute machinery from another vendor at 125% of the cost of, and 30 days later than, the order cancelled by Supplier. Factory will be able to recover: I. the cost to upgrade the foundation. II. the additional cost of the substitute machinery. III. foreseeable losses from orders cancelled due to the delay in installing the machine. IV. costs avoided due to the delay in installing the machine.

Question 5 options:

a)

I and II.

b)	I, II, and IV.

c)	I, II, and III.

d)	I, II, III, and IV.

Question 6 (1 point)

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Carrier was hired to deliver the custom-made sets and unique scenery and costumes for the hit Broadway musical "Van Buren!" on each stop on Traveling Company's 10-city tour. Due to mechanical problems, Carrier delivered late, forcing Traveling Company to cancel opening night in Chicago. Carrier will be:

Question 6 options:

a)	liable for consequential damages.

b)	liable for consequential damages, which were foreseeable because Carrier knew the performance dates and the consequences of non-delivery were obvious.

c)	not liable for consequential damages, which were not foreseeable.

d)	not liable for consequential damages, as Traveling Company had a duty to mitigate damages by seeking alternative sets, scenery, and costumes.

Question 7 (1 point)

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Carmaker hired Fabricator to manufacture parts with a specially-designed version of Carmaker's logo for a limited edition model of Carmaker's best-selling vehicle. After Fabricator had begun production and about 30% of the parts had been delivered to Carmaker, when pre-orders for the limited edition did not meet Carmaker's projected demand, Carmaker cancelled the contract with Fabricator. With no other market for the parts, Fabricator cannot mitigate damages by finishing manufacturing the parts and seeking a substitute buyer. In a suit for damages, Fabricator will recover:

Question 7 options:

a)	the lost profits from the contract.

b)	the full contract price.

c)	the lost profits from the contract, measured as the contract price less the cost of manufacturing the parts.

d)	the unpaid balance of the contract price, measured as the contract price less any payments made by Carmaker.

Question 8 (1 point)

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Driver contracts with Dealer to buy a new car, selecting the car's color and accessories from the manufacturer's available range of options. Before the car is delivered, Driver loses his job and calls Dealer to let Dealer know that he can no longer afford the car and to cancel the order. Dealer:

Question 8 options:

a)	can sell the car to another buyer, and recover the difference between the contract price and the market price.

b)	can sell the car to another buyer at a discount, because Driver selected the car's color and accessories, and recover the difference between the contract price and the market price.

c)	is a lost volume seller and can recover lost volume profits from the cancelled sale.

d)	is not a lost volume seller and cannot recover lost volume profits from the cancelled sale.

Question 9 (1 point)

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Florist contracts with Wholesaler for an extra shipment of flowers for a wedding. When Wholesaler's refrigerated truck arrives at Florist, Florist tells Wholesaler that the wedding is off and that the flowers are not needed. Heading back from Florist with the load of flowers, Wholesaler's refrigerated truck breaks down. Wholesaler hires Trucker's refrigerated truck to transport the flowers to Wholesaler's warehouse. When Wholesaler sues Florist for breach, Wholesaler:

Question 9 options:

a)	will not be able to recover the extra cost for hiring Trucker.

b)	will not be able to recover the extra cost for hiring Trucker, because Wholesaler assumed the risk that the truck might break down.

c)	will be able to recover the extra cost for hiring Trucker.

d)	will be able to recover the extra cost for hiring Trucker, if the extra cost is reasonable under the circumstances.

Question 10 (1 point)

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Florist contracts with Wholesaler for an extra shipment of particular flowers for a wedding. The day before the wedding, Wholesaler calls Florist and cancels the order. The only source that can provide the particular flowers needed on short notice charges Florist 200% more than Wholesaler. In a breach of contract action against Wholesaler, Florist:

Question 10 options:

a)	will not be able to recover the extra cost of substitute goods, because there is nothing indicating that Florist paid any part of the amount due under the contract with Wholesaler.

b)	will not be able to recover the extra cost of substitute goods, because they cost more than the original contract price.

c)	will be able to recover the extra cost of substitute goods, if Florist can show that the additional cost was reasonable under the circumstances.

d)	will be able to recover the extra cost of substitute goods, because Wholesaler's breach was willful.