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:

Budget Constraint

Refers to the limitations on the consumption choices of individuals based on their income and the prices of goods and services.

Choice Set

A set of all possible options available to a consumer from which he or she can make a selection.

Area

In a geographical or economic context, can refer to a specified region or domain under consideration for its characteristics or resources.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.