Question

1. Land Developer agrees to buy an acre of land from Property Owner for $20,000. Following payment of the purchase price by Land Developer, Property Owner breaches the contract and refuses to convey the land on the scheduled closing date (after learning that the market price of the land had risen 50% - from $20,000 to $30,000 - between the date of the sale and the scheduled closing date). Assuming that the equitable remedy of specific performance is not available, Land Developer may elect to file suit seeking (i) refund of the purchase price and (ii) compensatory damages. What would be the amount of Land Developer’s ‘benefit of the bargain’ compensatory damages?

a. $20,000.

b. $30,000.

c. $10,000.

d. $0.

2. Paintball Products and Trucking Company enter into an agreement that provides for deliveries of Paintball products by Trucking Company to various shooting/warfare gaming locations on certain fixed dates and times. The agreement contains a provision stating that in the event of a delivery default, Trucking Company will pay Paintball Products a fixed compensation of $1,500 for each day of shipping delay given the fact that actual economic losses for such delivery default would be impossible to calculate. This is most likely a

a.         liquidated damages clause.

b.         mitigation of damages clause.

c.          nominal damages clause.

d.         punitive damages clause.

Answer 1