When a Breach of Contract Has Occurred the Purpose of Damages

question 8

Multiple Choice

When a breach of contract has occurred the purpose of damages is to

• A) compensate the wronged party for the loss incurred.
• B) make the case an example to the rest of the community that this type of behaviour will not be tolerated.
• C) provide a deterrent for the breaking of moral and legal obligations.
• D) punish the one who has committed the breach by making him pay compensation.
• E) have the damages reflect the severity of the breach.

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Definitions:

Bond Yield

The return an investor realizes on a bond, calculated by the coupon payments relative to the market price of the bond.

Face Value

The nominal or dollar value stated on a financial instrument, such as a bond or stock, representing its worth at issuance or maturity.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.