Introductory Business Law CLEP Prep Practice Exam

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Prepare for the CLEP Business Law Exam with flashcards and multiple-choice questions. Each question comes with hints and explanations to help you succeed. Master the content and pass your exam!

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What type of damages is awarded to compensate a non-breaching party for loss or injury suffered due to breach of contract?

Restitution Damages
Rescission Damages
Compensatory Damages
Punitive Damages

The correct answer is: Compensatory Damages

Compensatory damages are awarded in a breach of contract case to compensate the non-breaching party for any loss or injury they have suffered. This includes damages for any direct or foreseeable losses that result from the breach. Therefore, options A, B, and D are incorrect because they do not specifically pertain to compensatory damages and may not fully compensate the non-breaching party for their losses. Restitution damages refer to returning any property or funds that were exchanged as part of the contract, rescission damages refer to cancelling the contract and returning both parties to their pre-contract positions, and punitive damages are awarded to punish the breaching party for their actions. These types of damages are not necessarily intended to fully compensate the non-breaching party for their losses. Therefore, C is the correct answer as it directly pertains to the type of damages awarded for loss or injury suffered due to breach of contract