1|Page
Business Law: Chapter 1 study guide 2025
Substantial performance constitutes a minor breach of
the contract. T/F - .....ANSWER ...✔✔ True
Which of the following is true about the recovery of
punitive damages in connection with contracts? -
.....ANSWER ...✔✔ They can be covered for tortious
conduct in connection with a contract, but generally not
for the breach of a contract.
Pat Painter contracts to paint Harry Homeowner's home
for $6,000. Pat would supply all materials at a cost to
Pat of $1,000. Harry breaches by refusing to let Pat
paint the house, which Pat found out before spending
any money on the materials. Pat is able to find another
job that nets a profit of $4,200 during that same time
that Harry's house was to be painted. How much can Pat
recover from Harry in damages? - .....ANSWER ...✔✔
$800
A minor breach is most directly associated with: -
.....ANSWER ...✔✔ substantial performance
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What is tender of performance in connection with a
contract? - .....ANSWER ...✔✔ an unconditional offer
by a contracting party to perform his or her obligations
under a contract
When a court orders specific performance, it: -
.....ANSWER ...✔✔ orders a party to a contract to do
exactly what was called for in the contract
Damages that are fixed in the contract for the amount to
be awarded in the event of a breach are known as: -
.....ANSWER ...✔✔ liquidated damages
Rescission and restitution are designed to give the
parties the benefit of the bargain. T/F - .....ANSWER
...✔✔ False
When there is an anticipatory breach, the nonbreaching
party's obligations under the contract are discharged
immediately. T/F - .....ANSWER ...✔✔ True
A material breach allows the other party to rescind a
contract. T/F - .....ANSWER ...✔✔ True
,3|Page
When rescinding a contract, the parties must make
restitution of the consideration they received under the
contract. T/F - .....ANSWER ...✔✔ True
In the Super Valu Stores, Inc. v. Peterson case, the court
refused to grant damages for lost profits, because the
store involved had not been built. T/F - .....ANSWER
...✔✔ False
A recovery in quasi-contract is based on the fair value
of the goods or services provided. T/F - .....ANSWER
...✔✔ True
Liquidated damages will be invalidated if they are
unreasonably large or small. T/F - .....ANSWER ...✔✔
False
Which is the most basic or common remedy available for
the breach of a contract? - .....ANSWER ...✔✔
compensatory damages
The UCC governs damages for a breach of a sales
contract involving goods. - .....ANSWER ...✔✔ True
, 4|Page
If an employee breaches an employment contract, the
employer can recover the costs incurred to replace the
employee, plus any increase in salary paid to the new
employee in excess of what would have been paid to
the old employee. - .....ANSWER ...✔✔ True
When an employer breaches an employment contract,
what obligation does the employee have in seeking
substitute employment? - .....ANSWER ...✔✔ The
employee is obligated to accept substitute employment
only if it is comparable employment.
What does the term "mitigation" refer to in connection
with damages? - .....ANSWER ...✔✔ the duty of a
nonbreaching party to make reasonable efforts to
reduce damages
The general requirements for a liquidated damages
clause to be enforceable are which of the following? -
.....ANSWER ...✔✔ Actual damages are difficult to
determine and the liquidated damages amount is
reasonable.
Under Article 2A of the UCC, a consumer lease is
defined as: - .....ANSWER ...✔✔ a lease involving
Business Law: Chapter 1 study guide 2025
Substantial performance constitutes a minor breach of
the contract. T/F - .....ANSWER ...✔✔ True
Which of the following is true about the recovery of
punitive damages in connection with contracts? -
.....ANSWER ...✔✔ They can be covered for tortious
conduct in connection with a contract, but generally not
for the breach of a contract.
Pat Painter contracts to paint Harry Homeowner's home
for $6,000. Pat would supply all materials at a cost to
Pat of $1,000. Harry breaches by refusing to let Pat
paint the house, which Pat found out before spending
any money on the materials. Pat is able to find another
job that nets a profit of $4,200 during that same time
that Harry's house was to be painted. How much can Pat
recover from Harry in damages? - .....ANSWER ...✔✔
$800
A minor breach is most directly associated with: -
.....ANSWER ...✔✔ substantial performance
,2|Page
What is tender of performance in connection with a
contract? - .....ANSWER ...✔✔ an unconditional offer
by a contracting party to perform his or her obligations
under a contract
When a court orders specific performance, it: -
.....ANSWER ...✔✔ orders a party to a contract to do
exactly what was called for in the contract
Damages that are fixed in the contract for the amount to
be awarded in the event of a breach are known as: -
.....ANSWER ...✔✔ liquidated damages
Rescission and restitution are designed to give the
parties the benefit of the bargain. T/F - .....ANSWER
...✔✔ False
When there is an anticipatory breach, the nonbreaching
party's obligations under the contract are discharged
immediately. T/F - .....ANSWER ...✔✔ True
A material breach allows the other party to rescind a
contract. T/F - .....ANSWER ...✔✔ True
,3|Page
When rescinding a contract, the parties must make
restitution of the consideration they received under the
contract. T/F - .....ANSWER ...✔✔ True
In the Super Valu Stores, Inc. v. Peterson case, the court
refused to grant damages for lost profits, because the
store involved had not been built. T/F - .....ANSWER
...✔✔ False
A recovery in quasi-contract is based on the fair value
of the goods or services provided. T/F - .....ANSWER
...✔✔ True
Liquidated damages will be invalidated if they are
unreasonably large or small. T/F - .....ANSWER ...✔✔
False
Which is the most basic or common remedy available for
the breach of a contract? - .....ANSWER ...✔✔
compensatory damages
The UCC governs damages for a breach of a sales
contract involving goods. - .....ANSWER ...✔✔ True
, 4|Page
If an employee breaches an employment contract, the
employer can recover the costs incurred to replace the
employee, plus any increase in salary paid to the new
employee in excess of what would have been paid to
the old employee. - .....ANSWER ...✔✔ True
When an employer breaches an employment contract,
what obligation does the employee have in seeking
substitute employment? - .....ANSWER ...✔✔ The
employee is obligated to accept substitute employment
only if it is comparable employment.
What does the term "mitigation" refer to in connection
with damages? - .....ANSWER ...✔✔ the duty of a
nonbreaching party to make reasonable efforts to
reduce damages
The general requirements for a liquidated damages
clause to be enforceable are which of the following? -
.....ANSWER ...✔✔ Actual damages are difficult to
determine and the liquidated damages amount is
reasonable.
Under Article 2A of the UCC, a consumer lease is
defined as: - .....ANSWER ...✔✔ a lease involving
