In Awarding Damages for Breach of Contract

question 22

Multiple Choice

In awarding damages for breach of contract

• A) the plaintiff should be, to the extent possible, placed in the same position as he was prior to the agreement being made.
• B) the defendant should be, to the extent possible, punished for the breach in order to deter him from repeating this course of behaviour.
• C) the plaintiff should be, to the extent possible, placed in the same position as he would have been if the contract had been performed.
• D) the defendant should only be required to pay what he can reasonably afford.
• E) the plaintiff should only be entitled to compensation for specific and calculable costs and expenses.

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Definitions:

Lockup Transaction

Agreements restricting company insiders from selling their shares for a set period after an initial public offering to prevent a sudden oversupply of stock.

Synergies

Synergies are the additional value created by the combination of two companies, expected to result in cost savings or increased revenues beyond what the individual entities could achieve alone.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Investment Opportunities

Options available for entities or individuals to invest capital with the expectation of a positive return.