Practice Quiz

CLEP Business Law

Category - Contracts

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Which of the following is NOT a limitation on the damages a non-breaching party may receive under common law?
  1. The non-breaching party cannot receive damages for loss that he or she could have avoided through reasonable efforts.
  2. The non-breaching party cannot recover for losses that are not reasonably foreseeable.
  3. The non-breaching party cannot recover for losses that cannot be established with reasonable certainty.
  4. The non-breaching party cannot receive compensation for damages that would put him in a better position than he or she would have been in if there were no breach.
  5. The non-breaching party can only receive compensation that puts him or her in a better position than he or she would have been if there were no breach.
Explanation
Answer: E. That the non-breaching party can only receive compensation that puts him or her in a better position than he or she would have been if there was no breach is not a limitation on the damages a non-breaching party may receive under common law. Damages are meant to make the non-breaching party whole, not to put the non-breaching party in a better position than he or she would have been in had the contract been performed. However, damages must be reasonably foreseeable and certain, and the non-breaching party must have made an effort to mitigate them.
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