PSI Virginia Real Estate Practice Exam

Which of the following statements is true regarding breach of contract?

1. It always results in criminal charges

2. It can lead to a legally enforceable suit for damages

3. It is impossible to resolve without litigation

4. All breaches are considered minor

The correct answer is: It can lead to a legally enforceable suit for damages

The statement that a breach of contract can lead to a legally enforceable suit for damages is accurate because when one party fails to fulfill their contractual obligations, the other party has the right to seek compensation for any losses incurred as a result of that breach. Contract law is primarily concerned with enforcing agreements and providing remedies for violations. The injured party may pursue various forms of damages, including compensatory damages, consequential damages, or even specific performance in some cases, depending on the nature of the breach. Understanding that not all breaches of contract lead to criminal charges, the legal ramifications of a breach are generally civil rather than criminal. Additionally, breaches can often be resolved through negotiation or settlement rather than formal litigation, allowing parties to come to an agreement without going to court. Lastly, while some breaches may be considered minor, others can be significant or even material, greatly affecting the parties involved. Therefore, the idea that all breaches are minor does not hold true in the legal context of contract enforcement.