Contracts and Sales Multistate Bar Practice Exam

What is a typical remedy for parties upon a failed condition of a contract?

1. Specific performance of the contract

2. Recover under unjust enrichment

3. Rescind the contract entirely

4. Payment of punitive damages

The correct answer is: Recover under unjust enrichment

In the scenario concerning a failed condition of a contract, recovering under unjust enrichment is typically considered a viable remedy. Unjust enrichment occurs when one party benefits at the expense of another in circumstances that the law recognizes as unjust. If a condition fails, and as a result, one party has received a benefit without fulfilling the contract obligations, the other party may seek compensation to prevent that unfair advantage. For example, if one party delivers goods and the other party does not pay due to a failed condition, the party that delivered the goods can assert unjust enrichment to recover the value of the goods provided, even if the contractual obligations were not fully met due to the condition's failure. This remedy aims to restore fairness rather than to enforce the original contract. The other options, while they describe potential remedies in different contexts, are not typically the primary remedy for a failed condition. Specific performance is usually reserved for situations where monetary damages are insufficient. Rescinding the contract could apply if the failure of the condition renders the contract voidable, but it does not necessarily allow for recovery of benefits that may have been conferred. Punitive damages are generally not applicable in contract cases, as they are meant to punish wrongdoing rather than to address breaches of contract.