Contract Breach and Remedies Flashcards

What distinguishes a material breach from a minor breach in contract law?

Answer: A material breach defeats the purpose of the contract and excuses the other party's performance; a minor breach does not

A material breach goes to the essence of the contract, excusing the other party from performing and entitling them to sue for total breach; a minor breach allows only partial damages.

A seller delivers goods that fail to conform to the contract. Under UCC Article 2, what is the buyer's right upon inspection?

Answer: The buyer has the right to reject the goods if they fail to conform in any respect

Under the UCC perfect tender rule (§2-601), the buyer may reject goods that fail to conform to the contract in any respect, even a minor one.

Restitution as a remedy for breach of contract is designed to:

Answer: Restore the non-breaching party to their pre-contract position by recovering the benefit conferred on the breaching party

Restitution prevents unjust enrichment by requiring the breaching party to return any benefit they received from the non-breaching party.

Under the Hadley v. Baxendale rule, consequential damages are recoverable only if:

Answer: They were foreseeable by the breaching party at the time of contracting as a probable result of breach

The Hadley rule limits consequential damages to those that were foreseeable to the breaching party at the time of contract formation as a likely consequence of breach.

A construction contractor abandons a project halfway through. What damages may the owner recover?

Answer: The cost to complete the project minus the unpaid contract balance, plus consequential damages

When a contractor breaches mid-performance, the owner may recover the reasonable cost to complete the work minus the balance owed under the contract.

Which of the following is NOT a type of compensatory damages in contract law?

Answer: Punitive damages

Punitive damages are generally not available in contract cases; compensatory damages include expectation, reliance, and consequential damages.

An employee is wrongfully terminated with six months left on her employment contract at $5,000/month. She finds comparable work after two months paying $4,000/month. What is her likely recovery?

Answer: $10,000 (two months at $5,000) plus $6,000 difference for four months

She recovers $10,000 for the two unemployed months, then $1,000/month difference for the remaining four months ($4,000), totaling $14,000, reflecting her mitigation duty.