©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
ENGR 413 Chapters 7-12 Exam Questions
With Correct Answers
When does a breach of contract occur? - answer✔When one of the parties fails to meet its
obligations under the contract.
What is the most common remedy for breach of contract? - answer✔Damages
Who intercedes when parties are unable to come to an agreement? - answer✔Arbitrator
What happens when parties disagree over a contract? - answer✔the party who is later determined
to have been wrong will be liable if they breached the contract based on their wrong
understanding of it
Owners often ask contractors to provide this to address AFL breaches - answer✔Performance
Bond
Why may a party intentionally breach a contract? - answer✔Anticipated financial losses: the
consequences for doing so will be less severe than for completing it
Define Damages - answer✔Compensation
Define Specific Performance - answer✔a court order requiring completion of the contract
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Define Injunction - answer✔a court order requiring a named party not do something
Define Declaratory Order - answer✔statement by the court of the rights and obligations of the
parties
How are damages calculated? - answer✔Damages are calculated as the compensation required to
put the innocent party in the financial position, they would have been in but for the breach of
contract.
Define Mitigation - answer✔the innocent party must take reasonable steps to minimize the loss
suffered
Define Causation - answer✔the innocent party can only recover losses that were caused by the
breach of contract
Define Remoteness - answer✔only damages that are reasonably proximate to the breach can be
recovered
Define Consequential Damages - answer✔cover indirect losses, such as business interruption
losses
Define Liquidated Damages - answer✔compensation agreed to by the parties at the time of
contract formation
What are some key aspects of liquidated damages? - answer✔Must be a genuine pre-estimate of
damages and if excessive will likely be unenforceable
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Define Bonus Clause - answer✔additional payment for performance that exceeds minimum
requirements
What is Diminution of Value? - answer✔where the cost of rectification will be excessive
compared to the benefit rectification will bring
What is an example of Diminution of Value? - answer✔A car after a collision is worth less than
before the accident.
What is a fundamental breach of contract? - answer✔It deprives the innocent party of all or
substantially all of the benefit of the contract
What are options for the innocent party in a breach of contract? - answer✔Continue contract and
sue or terminate contract and sue
What is a simple breach of contract? - answer✔Less significant than a fundamental breach. Does
not entitle the innocent party to put an end to the contract. Does entitle the innocent party to sue
for damages
What happens when the innocent party terminates a contract over a simple breach? - answer✔If
the innocent party terminates the contract because of a simple breach, that will be a fundamental
breach by the "innocent" party
Define Repudiation - answer✔When one party, by words or actions, makes it known that it does
not intend to perform its fundamental obligations under the contract
12/3/2024 11:27AM
ENGR 413 Chapters 7-12 Exam Questions
With Correct Answers
When does a breach of contract occur? - answer✔When one of the parties fails to meet its
obligations under the contract.
What is the most common remedy for breach of contract? - answer✔Damages
Who intercedes when parties are unable to come to an agreement? - answer✔Arbitrator
What happens when parties disagree over a contract? - answer✔the party who is later determined
to have been wrong will be liable if they breached the contract based on their wrong
understanding of it
Owners often ask contractors to provide this to address AFL breaches - answer✔Performance
Bond
Why may a party intentionally breach a contract? - answer✔Anticipated financial losses: the
consequences for doing so will be less severe than for completing it
Define Damages - answer✔Compensation
Define Specific Performance - answer✔a court order requiring completion of the contract
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Define Injunction - answer✔a court order requiring a named party not do something
Define Declaratory Order - answer✔statement by the court of the rights and obligations of the
parties
How are damages calculated? - answer✔Damages are calculated as the compensation required to
put the innocent party in the financial position, they would have been in but for the breach of
contract.
Define Mitigation - answer✔the innocent party must take reasonable steps to minimize the loss
suffered
Define Causation - answer✔the innocent party can only recover losses that were caused by the
breach of contract
Define Remoteness - answer✔only damages that are reasonably proximate to the breach can be
recovered
Define Consequential Damages - answer✔cover indirect losses, such as business interruption
losses
Define Liquidated Damages - answer✔compensation agreed to by the parties at the time of
contract formation
What are some key aspects of liquidated damages? - answer✔Must be a genuine pre-estimate of
damages and if excessive will likely be unenforceable
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Define Bonus Clause - answer✔additional payment for performance that exceeds minimum
requirements
What is Diminution of Value? - answer✔where the cost of rectification will be excessive
compared to the benefit rectification will bring
What is an example of Diminution of Value? - answer✔A car after a collision is worth less than
before the accident.
What is a fundamental breach of contract? - answer✔It deprives the innocent party of all or
substantially all of the benefit of the contract
What are options for the innocent party in a breach of contract? - answer✔Continue contract and
sue or terminate contract and sue
What is a simple breach of contract? - answer✔Less significant than a fundamental breach. Does
not entitle the innocent party to put an end to the contract. Does entitle the innocent party to sue
for damages
What happens when the innocent party terminates a contract over a simple breach? - answer✔If
the innocent party terminates the contract because of a simple breach, that will be a fundamental
breach by the "innocent" party
Define Repudiation - answer✔When one party, by words or actions, makes it known that it does
not intend to perform its fundamental obligations under the contract
