In a Breach of Contract Case, Compensatory Damages Are Damages

question 21

Multiple Choice

In a breach of contract case, compensatory damages are damages that:

• A) allow the party suffering the breach to recover costs incurred by relying on the promise of the other party
• B) allow the party suffering the breach to recover lost profits
• C) allow the party suffering the breach to gain economically by imposing "affirmative punishment" on the breaching party
• D) exceed what the party suffering the breach lost due to the breach
• E) none of the other choices are correct

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Definitions:

Interest Revenue

Income earned from lending money or depositing funds in interest-bearing accounts.

Investor Ownership

The possession of equity in a company, represented by stocks, by investors.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without controlling or jointly controlling the entity.

Short-Term Investment

An investment expected to be converted into cash, sold, or exchanged within a short time frame, typically within a year.