Chapter 12 Multiple Choice Questions

. Regarding the remedy of damages, which one of the following statements is untrue?

Where the defendant maliciously breaches a contract, the court will increase the award of damages to take into account his reprehensible behaviour.

Generally, a claimant cannot recover damages for losses sustained to a third party.

The claimant cannot recover more than he actually lost.

Contractual damages are not designed to punish the defendant.

. What is expectation loss?

Expectation loss is a measure of damages designed to compensate the claimant for the benefits that he would have expected to gain had the defendant not breached the contract.

Expectation loss is a measure of damages designed to compensate the claimant for expenses incurred in expectation of the contract proceeding as planned.

Expectation loss refers to the maximum amount that a party to a contract will expect to pay should he breach the contract.

Expectation loss refers to the maximum amount that liability for breach of contract can be limited to via the use of an exclusion clause.

. Which one of the following is not a form of non-pecuniary loss?

Loss of profits.

Physical injury or inconvenience.

Mental distress and disappointment.

Loss of reputation

. In relation to causation, which one of the following statements is untrue?

If the claimant's loss is caused partly by the defendant's breach of contract and partly by the intervening act of a third party, the defendant will not be liable for the claimant's loss.

Party in breach of contract will not be liable to pay damages where the non-breaching party's loss was not caused by the breach of contract, but by an intervening act or event.

Damages for breach of contract will only be awarded where the breach was the effective or dominant cause of the non-breaching party's loss.

If the claimant's loss is caused partly by the defendant's breach of contract and partly by an intervening act or natural event, then, provided that the two causes are cooperating and contributed equally to the loss, the defendant will still be liable for the loss.

. In relation to remoteness, which one of the following statements is untrue?

A claimant cannot claim for a loss, the extent of which is greater than could be expected.

The non-breaching party can claim for losses that arise naturally from the breach and which are in the reasonable contemplation of both parties at the time they made the contract.

A party that has committed a breach of contract is not liable for every loss that his breach causes.

The non-breaching party can claim for losses that do not arise naturally from the breach, providing that they are in the reasonable contemplation of both parties based on the facts know.

. Which one of the following statements best describes the likely consequence of the non-breaching party failing to mitigate his loss?

The non-breaching party will be unable to recover those losses that he could have avoided by taking reasonable steps.

As the non-breaching party is under a duty to mitigate his loss, he will not be able to recover any damages.

The non-breaching party will only be permitted to recover nominal damages.

The non-breaching party will only be able to recover his pecuniary losses.

. What are liquidated damages?

A pre-estimate of the amount of damages to be awarded in the event of a breach of contract occurring.

Damages that are quantified by the courts following a breach.

A pre-estimated amount that a party will need to pay should he breach the contract. The amount is set excessively high in order to encourage performance and deter breach.

Damages that are negotiated and agreed upon by the parties following a breach.

. In which one of the following instances will the court be prepared to order specific performance?

Where the term breached is only a warranty.

Where the contract would require constant court supervision.

Where damages are adequate.

Where the contract is one for personal services.

. What is a prohibitory injunction?

An order of the court requiring the defendant to refrain from the performance of a certain act.

An order of the court requiring the defendant to perform a positive act.

An order of the court requiring the defendant to remedy a breach of contract that he has committed.

An order of the court requiring the defendant to pay damages for his breach of contract.

. Regarding the limitation period of a breach of contract action, which one of the following statements is untrue?

If the action for breach of contract is based upon the fraud of the defendant, then the limitation period begins to run only when the claimant first sustained loss.

If the claimant is a minor when the cause of action arises, then the limitation period will not begin to run until he reaches the age of 18 or dies.

Actions concerning a simple contract cannot be brought after six years, beginning with the date on which the cause of action arose.

The limitation periods contained in the Limitation Act 1980 in relation to breach of contract actions do not apply to claims for equitable relief.

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