Bar Exam Bar Exam Remedies

Question 1

In a breach of contract action, expectation damages are designed to:

Accepted Answer

Place the plaintiff in the position they would have been in had the contract been fully performed

Answer

Reimburse the plaintiff only for out-of-pocket expenditures made in reliance on the contract

Answer

Punish the defendant for willfully breaching the contract

Answer

Return both parties to their pre-contract positions

Question 2

Consequential (special) damages in a contract action are recoverable under the rule of Hadley v. Baxendale only if they were:

Accepted Answer

Foreseeable as a probable result of breach at the time the contract was formed

Answer

Actually foreseen by the breaching party at the moment of breach

Answer

Directly and naturally caused by the breach without any intervening cause

Answer

Expressly identified and described in the contract itself

Question 3

The non-breaching party's duty to mitigate damages requires:

Accepted Answer

The non-breaching party to take reasonable steps to reduce losses after the breach

Answer

Both parties to attempt negotiation before seeking judicial relief

Answer

The breaching party to minimize harm to the non-breaching party before the breach occurs

Answer

The court to reduce the damage award by 50% if the plaintiff acted unreasonably

Question 4

Reliance damages in a contract action are designed to restore the plaintiff to their:

Accepted Answer

Pre-contract position by reimbursing costs incurred in reasonable reliance on the contract

Answer

Expected position had the contract been fully performed, including lost profit

Answer

Position as a creditor with a secured interest in the defendant's assets

Answer

Market-equivalent position based on the fair value of the contract

Question 5

A liquidated damages clause in a contract is enforceable when:

Accepted Answer

The amount is a reasonable pre-estimate of anticipated harm and actual damages are difficult to calculate

Answer

Both contracting parties are sophisticated businesses represented by counsel

Answer

The specified amount penalizes the breacher to deter future breach

Answer

The clause is included in a written contract for a sale of goods over $500

Question 6

Punitive damages in a tort action are generally available when the defendant:

Accepted Answer

Acted with malice, fraud, oppression, or conscious disregard of the plaintiff's rights

Answer

Was negligent and caused substantial economic harm to the plaintiff

Answer

Is a large corporation whose negligence caused widespread harm to consumers

Answer

Caused both economic and non-economic losses to the plaintiff