TX Bar Contracts 2

Question 1

A buyer under a contract for the sale of goods notified the seller two weeks before the delivery date that he would not accept the goods. What doctrine applies, and what may the seller do immediately?

Accepted Answer

Anticipatory repudiation; the seller may treat the contract as breached and sue for damages immediately

Answer

Impossibility; the seller is discharged from performance

Answer

Substantial performance; the seller must deliver and then sue

Answer

Accord and satisfaction; the parties must negotiate a substitute

Question 2

Under the common law, which factor is LEAST relevant when determining whether a breach is material?

Accepted Answer

The color of ink used to sign the contract

Answer

The extent to which the breaching party will suffer forfeiture

Answer

The likelihood that the breaching party will cure

Answer

The extent to which the non-breaching party received the expected benefit

Question 3

A contractor breaches a construction contract. The owner's expectation damages are calculated to put the owner in the position she would have been in had the contract been performed. Which measure of damages best describes this?

Accepted Answer

Expectation damages

Answer

Reliance damages

Answer

Restitution damages

Answer

Nominal damages

Question 4

After a seller breaches a contract, the buyer fails to make any effort to find substitute goods even though comparable goods were available at the same price nearby. What is the legal consequence?

Accepted Answer

The buyer's damages will be reduced by the amount that could have been saved through reasonable mitigation

Answer

The buyer may recover full damages with no reduction

Answer

The buyer may recover punitive damages for the seller's willful breach

Answer

The contract is void and no damages are available

Question 5

A contract between two commercial parties contains a liquidated damages clause specifying $5,000 for any breach. At the time the contract was formed, actual damages were difficult to estimate and $5,000 appeared to be a reasonable forecast. At trial, actual damages are proven to be only $500. Under Texas law, is the liquidated damages clause enforceable?

Accepted Answer

Yes, because the clause was a reasonable estimate at the time of contracting and actual damages were difficult to ascertain

Answer

No, because actual damages were far less than the stipulated amount

Answer

No, because liquidated damages clauses are per se unenforceable in Texas

Answer

Yes, but only if the plaintiff also proves actual damages

Question 6

A homeowner hires a painter who substantially completes the job but uses a slightly different shade of white paint than specified, reducing the home's value by $200. The homeowner refuses to pay the $10,000 contract price. Under the substantial performance doctrine, what is the painter entitled to recover?

Accepted Answer

The contract price minus the cost to remedy the defect or the diminution in value

Answer

Nothing, because the painter did not strictly comply with the contract

Answer

The full $10,000 with no deduction

Answer

$200 in nominal damages only

Question 7

A buyer breaches a contract for the sale of land. The seller resells the land at $20,000 less than the contract price. Which remedy best describes the seller's recovery?

Accepted Answer

The difference between the contract price and the resale price as expectation damages

Answer

Restitution of the seller's out-of-pocket expenditures

Answer

Punitive damages for intentional breach

Answer

Specific performance compelling the buyer to purchase