Breach of contract and remedies MCQs

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1. What is a breach of contract?
(A) Transfer of rights
(B) Modification of a contract
(C) Renewal of a contract
(D) Failure to perform contractual obligations

2. Which remedy aims to place the injured party in the position they would have been in if the contract was performed?
(A) Nominal damages
(B) Restitution
(C) Punitive damages
(D) Compensatory damages

3. When a court orders a party to perform the exact terms of the contract, it is called:
(A) Rescission
(B) Punitive damages
(C) Specific performance
(D) Waiver

4. Which remedy cancels the contract and releases both parties from obligations?
(A) Indemnity
(B) Rescission
(C) Warranty
(D) Penalty

5. A minor breach that does not affect the overall purpose of the contract is called:
(A) Material breach
(B) Anticipatory breach
(C) Express breach
(D) Partial breach

6. A major breach that destroys the purpose of the contract is known as:
(A) Material breach
(B) Nominal breach
(C) Anticipatory breach
(D) Minor breach

7. When a party declares in advance that they will not perform, it is called:
(A) Cancellation
(B) Actual breach
(C) Monetary breach
(D) Anticipatory breach

8. Which damages are awarded when the plaintiff has suffered no real financial loss?
(A) Nominal damages
(B) Punitive damages
(C) Compensatory damages
(D) Liquidated damages

9. Damages specified in the contract for future breach are called:
(A) Punitive damages
(B) Ordinary damages
(C) Liquidated damages
(D) Special damages

10. Which remedy aims to return benefits unfairly received by the breaching party?
(A) Penalty
(B) Rescission
(C) Restitution
(D) Waiver

11. Punitive damages are typically awarded to:
(A) Compensate for minor loss
(B) Punish wrongful conduct
(C) Enforce warranties
(D) Encourage performance

12. When a party stops performing without any notice, it is called:
(A) Partial breach
(B) Actual breach
(C) Rescission
(D) Anticipatory breach

13. Special damages are awarded for:
(A) Minor inconveniences
(B) Losses that cannot be measured
(C) Punishing the breaching party
(D) Foreseeable losses beyond normal damages

14. The non-breaching party must take steps to reduce their losses. This is known as:
(A) Hearsay rule
(B) Specific performance
(C) Mitigation of damages
(D) Waiver principle

15. A remedy available only when monetary damages are inadequate is:
(A) Punitive damages
(B) Rescission
(C) Arbitration
(D) Specific performance

16. Failure to mitigate damages may result in:
(A) Reduced compensation
(B) Increased compensation
(C) Automatic rescission
(D) Punitive damages

17. A term in a contract limiting the amount payable for breach is:
(A) Arbitration clause
(B) Exclusion clause
(C) Indemnity clause
(D) Limitation of liability clause

18. Which remedy restores both parties to their original position before the contract?
(A) Rescission
(B) Restitution
(C) Warranty
(D) Settlement

19. A breach caused by failure to perform on time when time is essential is called:
(A) Preventive breach
(B) Nominal breach
(C) Implied breach
(D) Fundamental breach

20. Which damages compensate for losses naturally arising from the breach?
(A) Liquidated damages
(B) Special damages
(C) Direct damages
(D) Nominal damages

21. A court may not award punitive damages in contract cases unless:
(A) The breach was accidental
(B) The breach was anticipated
(C) The breach involved fraud or malicious conduct
(D) The contract is silent

22. When only one party fails to perform, the injured party may:
(A) Continue performance
(B) Cancel the contract
(C) All of the above
(D) Sue for damages

23. Losses that the breaching party could not have reasonably predicted are:
(A) Unrecoverable damages
(B) Direct damages
(C) Special damages
(D) Liquidated damages

24. A monetary award intended to return a party to their expected financial position is:
(A) Expectation damages
(B) Nominal damages
(C) Restitution damages
(D) Penalty damages

25. When a contract term is breached but the overall purpose remains achievable, it is:
(A) Actual breach
(B) Material breach
(C) Anticipatory breach
(D) Partial breach