Purchase a course multi-pack for yourself or a friend and save up to 50%!
5-COURSE MULTI-PACK $180
10-COURSE MULTI-PACK $300
Accelerated 1-year bachelor's program
Question 1
Ben and Jerry enter into a contract with Moo Juice under which Moo Juice will deliver ten thousand gallons of milk to Ben and Jerry on May 1st and Ben and Jerry will pay $1 per gallon for the milk. On the morning of May 1st, the market price of milk is $3 per gallon. Moo Juice refuses to deliver the milk to Ben and Jerry for $1 per gallon. If Ben and Jerry sue Moo Juice for breach and ask for expectation damages, they will probably:
Correct
Incorrect!
Correct
Incorrect!
Correct Expectation damages are usually applied when compensating a victim of a breached contract and they are awarded in order to place the harmed party in the position he would have been in had the breach not occurred. In this case, expectation damages will be measured by taking the market price of the milk, $3 per gallon, and subtracting it from the contract price, $1 per gallon. Therefore, given the market price of milk, Ben and Jerry would have had $30,000 worth of milk had Moo Juice not breached. Taking the $30,000 value of the milk and subtracting the $10,000 that Ben and Jerry would have paid for the milk, expectation damages will come to $20,000. Therefore, C is the correct answer.
Incorrect! Expectation damages are usually applied when compensating a victim of a breached contract and they are awarded in order to place the harmed party in the position he would have been in had the breach not occurred. In this case, expectation damages will be measured by taking the market price of the milk, $3 per gallon, and subtracting it from the contract price, $1 per gallon. Therefore, given the market price of milk, Ben and Jerry would have had $30,000 worth of milk had Moo Juice not breached. Taking the $30,000 value of the milk and subtracting the $10,000 that Ben and Jerry would have paid for the milk, expectation damages will come to $20,000. Therefore, C is the correct answer.
Correct
Incorrect!
Question 2
Ben and Jerry order a revolutionary new industrial ice cream making machine from Thermachines Inc. Ben and Jerry are counting on this machine to increase their production. The machine is supposed to arrive at Ben and Jerry's plant on May 1st but does not arrive until May 15th. As a result, Ben and Jerry are unable to fill some of their orders and they end up losing $25,000 in profits. Ben and Jerry sue Thermachines for damages arising from the breach (the machine coming late) and for special damages stemming from their loss of profits. Assuming that Thermachines did not know and had no reason to know that the lost profits would result from their breach, Ben and Jerry can recover for:
Correct
Incorrect!
Correct Special damages are damages that result due to the injured party's individual circumstances. It is these damages that are limited under Hadley. Accordingly, the injured party can recover for these special damages only if, at the time the contract was made, the breaching party either knew or should have known that these damages would probably result from his breach. That being the case, if Thermachines either knew or should have known of Ben and Jerry's special circumstances in requiring the ice cream maker and of Ben and Jerry's inability to buy a similar machine somewhere else so that Ben and Jerry would lose considerable business if the machine was not delivered on time, Ben and Jerry can recover its lost profits as special damages. However, if Thermachines neither knew nor should have known of Ben and Jerry's special circumstances, Thermachines will only be liable for the general damages stemming from the breach. Here, Thermachines did not know of the special circumstances that existed. That being the case, Ben and Jerry can recover for the breach but not for the special damages and B is the correct answer.
Incorrect! Special damages are damages that result due to the injured party's individual circumstances. It is these damages that are limited under Hadley. Accordingly, the injured party can recover for these special damages only if, at the time the contract was made, the breaching party either knew or should have known that these damages would probably result from his breach. That being the case, if Thermachines either knew or should have known of Ben and Jerry's special circumstances in requiring the ice cream maker and of Ben and Jerry's inability to buy a similar machine somewhere else so that Ben and Jerry would lose considerable business if the machine was not delivered on time, Ben and Jerry can recover its lost profits as special damages. However, if Thermachines neither knew nor should have known of Ben and Jerry's special circumstances, Thermachines will only be liable for the general damages stemming from the breach. Here, Thermachines did not know of the special circumstances that existed. That being the case, Ben and Jerry can recover for the breach but not for the special damages and B is the correct answer.
Correct
Incorrect!
Correct
Incorrect!
Question 3
Ben and Jerry hire Eddie to manage their ice cream manufacturing plant. Eddie is an experienced plant manager and Ben and Jerry agree to pay him $250,000 per year for five years. After several months, Ben and Jerry are very happy with Eddie's work but they fire him in order to create a job for Ben's nephew. Eddie sues Ben and Jerry for breach of contract. In between the date he was fired and the date the trial started, Eddie is offered a job managing the Breyers ice cream plant for $150,000 per year. Preferring to collect damages from Ben and Jerry, Eddie turns down the Breyers job. If Eddie wins his suit, he will recover:
Correct
Incorrect!
Correct
Incorrect!
Correct In employment contract cases, where a boss wrongfully fires an employee, the employee has a duty to mitigate damages by looking for a comparable job. Here, Eddie will not be able to collect the full $250,000 from Ben and Jerry. Eddie has a duty to mitigate the damages caused by Ben and Jerry's breach and he had an opportunity to do so by going to work for Breyers. By refusing to mitigate his damages, Eddie is no longer entitled to the damages he could have avoided. Since he could have avoided $150,000 of the $250,000 in damages he suffered, he will only recover the $100,000 that he could not have avoided. Therefore, C is the correct answer.
Incorrect! In employment contract cases, where a boss wrongfully fires an employee, the employee has a duty to mitigate damages by looking for a comparable job. Here, Eddie will not be able to collect the full $250,000 from Ben and Jerry. Eddie has a duty to mitigate the damages caused by Ben and Jerry's breach and he had an opportunity to do so by going to work for Breyers. By refusing to mitigate his damages, Eddie is no longer entitled to the damages he could have avoided. Since he could have avoided $150,000 of the $250,000 in damages he suffered, he will only recover the $100,000 that he could not have avoided. Therefore, C is the correct answer.
Correct
Incorrect!
Question 4
Ben and Jerry hire Eddie to manage their ice cream manufacturing plant. Eddie is an experienced plant manager and Ben and Jerry agree to pay him $250,000 per year for five years. After several months, Ben and Jerry are very happy with Eddie's work but they fire him in order to create a job for Ben's nephew. Eddie sues Ben and Jerry for breach of contract. In between the date he was fired and the date the trial started, Eddie is offered a job working behind the counter at a Breyers ice cream store for $35,000 per year. Preferring to collect damages from Ben and Jerry, Eddie turns down the Breyers job. If Eddie wins his suit, he will recover:
Correct In employment contract cases, where a boss wrongfully fires an employee, the employee has a duty to mitigate damages by looking for a comparable job. However, the duty to mitigate for an employment contract only requires the harmed party to find a comparable job. Here, Eddie was offered a job but it was not comparable to the management job he had with Ben and Jerry. Thus, he is not required to take Breyers' offer under the duty to mitigate and he will be able to recover the complete $250,000 per year of the contract that Ben and Jerry owe him. A is the correct answer.
Incorrect! In employment contract cases, where a boss wrongfully fires an employee, the employee has a duty to mitigate damages by looking for a comparable job. However, the duty to mitigate for an employment contract only requires the harmed party to find a comparable job. Here, Eddie was offered a job but it was not comparable to the management job he had with Ben and Jerry. Thus, he is not required to take Breyers' offer under the duty to mitigate and he will be able to recover the complete $250,000 per year of the contract that Ben and Jerry owe him. A is the correct answer.
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Question 5
Ben and Jerry and Moo Juice enter into a contract under which Moo Juice will ship ten thousand gallons of milk to Ben and Jerry and Ben and Jerry will pay $1 per gallon. Three days before the shipment is due, Moo Juice informs Ben and Jerry that it will not be able to make the shipment. Ben and Jerry quickly arrange for Garelic Farms to ship them ten thousand gallons of milk at $1.50 per gallon. After Ben and Jerry receive the shipment from Garelic farms, they sue Moo Juice for damages. If Ben and Jerry win their suit against Moo Juice, they will recover:
Correct
Incorrect!
Correct
Incorrect!
Correct As far as contracts for the sale of goods are concerned, the U.C.C. requires a buyer to try to find substitute goods in the event that a seller breaches. If the buyer does not try to cover, he will not be able to recover whatever damages he could have prevented by covering. Here, Ben and Jerry covered to the best of their ability. That being the case, they will be entitled to recover the extra $5,000 they had to pay for the milk they bought and C is the correct answer.
Incorrect! As far as contracts for the sale of goods are concerned, the U.C.C. requires a buyer to try to find substitute goods in the event that a seller breaches. If the buyer does not try to cover, he will not be able to recover whatever damages he could have prevented by covering. Here, Ben and Jerry covered to the best of their ability. That being the case, they will be entitled to recover the extra $5,000 they had to pay for the milk they bought and C is the correct answer.