33. Which of the following statements best describes the businesswoman's rights after being fired?

B is correct. The company's unjustified termination of the businesswoman's employment constituted a breach of contract entitling the businesswoman to recover monetary damages. A wrongfully discharged employee is expected to mitigate damages by making reasonable efforts to seek comparable employment. However, if no comparable employment is reasonably available and the businesswoman does not take another job, the businesswoman is entitled to recover the promised salary for the remainder of the two years.

A is incorrect. The company's unjustified termination of the businesswoman's employment constituted a breach of contract entitling the businesswoman to recover monetary damages. However, a wrongfully discharged employee is expected to mitigate damages by making reasonable efforts to seek comparable employment. In this case, to avoid a reduction in her damages, the businesswoman is required to do more than remain ready to work. Her recovery will be reduced by the compensation she earned or could have earned if she had made reasonable efforts to secure comparable employment.

C is incorrect. The company's unjustified termination of the businesswoman's employment was probably not a material breach of contract. It represented only a small part of a large contract and can easily be remedied by an award of damages. But even if the breach was material, a court would likely employ the concept of divisibility to preclude the businesswoman from rescinding the contract of sale. As stated in Restatement (Second) of Contracts § 240, a contract is divisible where «the performances to be exchanged under an exchange of promises can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents.» Here, the agreed equivalents would be the sale of the business and the corresponding $25 million purchase price, and the businesswoman's promise to work for the company and the corresponding yearly salary of $150,000. Applying this concept, the businesswoman would be able to recover damages for the company's breach of its promise to employ her, but she would not be permitted to rescind the contract of sale.

D is incorrect. The company's unjustified termination of the businesswoman's employment constituted a breach of contract entitling the businesswoman to recover monetary damages. The general rule is that employers cannot obtain specific performance requiring an employee who has breached a personal services contract to work for the employer. It is also true generally that courts refuse to grant specific performance of an employment contract against a breaching employer. Consequently, the businesswoman's recovery will consist of the unpaid salary under the contract, reduced by the compensation she earned or could have earned if she had made reasonable efforts to secure comparable employment.