Crucial Exams

Multistate Bar Examination Practice Question

A homeowner discussed renovations with a contractor. The homeowner verbally agreed that the contractor should replace the roof for $25,000 and start immediately. Relying on this agreement, the contractor purchased materials and rented equipment, spending $7,000. Before work began, the homeowner decided to cancel the project, citing financial troubles. The contractor sues the homeowner seeking restitution or reliance damages for the costs incurred. Which of the following is the best solution for addressing the contractor's claim?

  • The contractor is entitled to $7,000 in reliance damages, representing the costs incurred due to reliance on the homeowner's promise.

  • The contractor is entitled to $25,000 in expectation damages, representing the profit they would have made under the contract.

  • The contractor is not entitled to any damages because the agreement was not in writing and does not constitute an enforceable contract.

  • The contractor may recover restitution for the homeowner’s unjust enrichment, but since the homeowner has received no benefit, no damages can be awarded.

Multistate Bar Examination
Contracts
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