Which of the Following Is True with Regard to Remedies

question 169

Multiple Choice

Which of the following is true with regard to remedies for breach of contract?

• A) The victim of a breach can recover damages that he could have avoided if he had tried to mitigate his loss.
• B) If the seller has committed a fundamental breach of the contract, an exemption clause absolves the seller from liability.
• C) A person who breaches a contract is liable for all the foreseeable loss that directly and naturally flows from the breach.
• D) Damages are awarded by the court to a person who has suffered loss because of a breach of an essential term of the contract, but are not awarded for a breach of a non-essential term (e.g., a warranty).
• E) Non est factum is an equitable remedy forcing a person to comply with the terms of the contract.

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Definitions:

Work In Process

This refers to the goods that are in the middle of the manufacturing process but are not yet complete.

Process Cost System

An accounting method used to track production costs for continuous production processes, allocating costs to units of product.

Shampoo Manufacturer

A company that specializes in producing shampoo products, from formulation and blending to packaging and distribution.

Conversion Costs

Costs incurred in the process of converting raw materials into finished goods, primarily comprising direct labor and manufacturing overhead.