Which of the Following Is False with Regard to Remedies

question 74

Multiple Choice

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

• A) If the court holds that the liquidated damages clause in the contract is an honest attempt to estimate damages, the amount stated will be forfeited to the victim of the breach, even if he suffered no loss in fact.
• B) A person who disobeys a court order, e.g., an order for specific performance, can be cited for contempt of court.
• C) Damages are awarded by the court to a person who has suffered loss because of a breach of a condition of the contract, but are not awarded for a breach of a warranty.
• D) As a general rule, a person who breaches a contract is liable for all of the foreseeable loss that directly and naturally flows from the breach.
• E) The victim of a breach cannot recover damages that he could have avoided if he had tried to mitigate his loss.

---

Definitions:

Depreciation Expense

The allocated cost of an asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Comparative Balance Sheet

A financial statement displaying the balance of assets, liabilities, and equity for two or more time periods side by side, facilitating trend analysis and financial comparison over time.

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of the entity, as reported in the cash flow statement.

Fiscal Year

A twelve-month period used for accounting purposes and financial reporting by an organization, which may not align with the calendar year.