CIPS Exam L5M3 Topic 1 Question 31 Discussion

Actual exam question for CIPS's L5M3 exam

Question #: 31
Topic #: 1

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 Candra at Jul 03, 2024, 04:48 AM

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Bulah

5 months ago

I agree with Bettina, the rationale behind B makes sense in the context of restitution damages.

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Bettina

5 months 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 correct answer.

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Gail

5 months ago

I disagree, I believe the correct answer is D) restitution damages cannot be mitigated by the actions of the innocent party.

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Salina

5 months ago

Restitution damages, huh? Sounds like the breaching party is really getting 'restituted' - if that's Chanan a word.

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Keneth

4 months ago

C) restitution damages are calculated based on how much the breaching party gained, rather than how much the innocent party lost

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Daron

4 months ago

A) restitution damages means you are unable to claim for future losses

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Dan

5 months ago

I think the answer is A) restitution damages means you are unable to claim for future losses.

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Chana

5 months ago

Wait, we're supposed to choose the statement that's not true? Talk about a trick question! I'll go with A just to be safe.

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Joana

5 months ago

Hmm, I'm torn between B and C. Though I suppose if the breaching party ends up worse off, that's kind of the point of restitution.

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Carisa

4 months ago

D) restitution damages cannot be mitigated by the actions of the innocent party

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Tran

4 months ago

C) restitution damages are calculated based on how much the breaching party gained, rather than how much the innocent party lost

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Cristal

5 months ago

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

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Carol

5 months ago

A) restitution damages means you are unable to claim for future losses

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Vernell

5 months ago

I'm going with D. Restitution is supposed to put the breaching party back where they started, so mitigating actions shouldn't matter.

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Amira

5 months ago

C looks like the correct answer to me. Restitution is all about the breaching party's gains, not the innocent party's losses.

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Lavera

5 months ago

Yeah, restitution damages focus on how much the breaching party benefited, not how much the innocent party lost.

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Jade

5 months ago

I think C is the correct answer too. It's all about the breaching party's gains.

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Tresa

6 months ago

Option A seems a bit off. Restitution damages definitely allow for future loss claims, otherwise what's the point?

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Jani

5 months ago

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

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Merissa

5 months ago

A) restitution damages means you are unable to claim for future losses

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