CIPS Exam L5M3 Topic 2 Question 33 Discussion

Actual exam question for CIPS's L5M3 exam

Question #: 33
Topic #: 2

Restitution damages are often calculated before contracts are signed and are clearly stated within a contract. Which of the following statements is not true?

Arestitution damages means you are unable to claim for future losses

Brestitution damages may leave the breaching party in a worse position than they were in before the contract began

Crestitution damages are calculated based on how much the breaching party gained, ra-ther than how much the innocent party lost

Drestitution damages cannot be mitigated by the actions of the innocent party

Show Suggested Answer

Suggested Answer: D

'restitution damages cannot be mitigated by the actions of the innocent party' is the untrue state-ment out of these four. The general principle of Restitution Damages is that the innocent party is expected to be proactive in mitigating the consequences of any breach and should not allow costs to spiral out of control. See p. 124

by Cletus at Jul 14, 2024, 12:02 PM

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Ryann

14 days ago

Hmm, option C sounds like the way to go. It's all about how much the breacher gained, not how much the innocent party lost. Seems fair enough.

upvoted 0 times

Annett

4 days ago

User 1: I agree, option C does seem fair. It's about making the breaching party give back what they gained.

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Leah

17 days ago

I think B) restitution damages may leave the breaching party in a worse position than they were in before the contract began is the incorrect statement.

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Terrilyn

17 days ago

I'm pretty sure option B is the correct answer here. Restitution is about putting the parties back in their original positions, not punishing the breaching party.

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Jeniffer

6 days ago

I think you're right, option B seems to be the most accurate.

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Emerson

21 days ago

I'm not sure, but I think C) restitution damages are calculated based on how much the breaching party gained, rather than how much the innocent party lost makes sense.

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