Mike Contracted to Buy Rita's House in a Written Contract

question 23

Multiple Choice

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10,000 to be forfeited in the event of Mike's failing to go through with the deal. This deposit was an honest estimate of the damages Rita would suffer. On these facts, which of the following is true?

• A) If Mike breaches the contract, he will have to pay Rita all the damages that directly and naturally flow from the breach.
• B) If Mike breaches the contract, he would have to pay $10,000 even if Rita's actual loss was $40,000.
• C) A clause in a contract that provides for the forfeiture of a deposit is called an exemption clause.
• D) If Mike breaches the contract, he would not have to pay $10,000 even if Rita suffered a substantial loss.
• E) If the contract price agreed upon was $150,000 and Rita, after Mike breaches the contract, sells the house in one week for $138,000, she will still be able to recoup all her losses.

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Definitions:

Men and Women

Refers to the two primary categories of gender identity in humans, each with its own societal roles and biological characteristics.

Eye Contact

The act of looking directly into another person's eyes, which is important in communication for establishing trust and engagement.

Honesty

The quality of being truthful, transparent, and free from deceit or fraud in one's actions and statements.

Culture

A collective framework of symbols, beliefs, attitudes, values, expectations, and standards for conduct.