Full access allows:
- Solve all tests online without limits;
- Remove all advertisements on website;
- Adding questions to favorite list;
- Save learning progress;
- Save results of practice exams;
- Watching all wrong answered questions.
20. What damages should the court award to the seller?
A buyer entered into a written contract to purchase from a seller 1,000 sets of specially manufactured ball bearings of a nonstandard dimension for a price of $10 per set. The seller correctly calculated that it would cost $8 to manufacture each set. Delivery was scheduled for 60 days later. Fifty-five days later, after the seller had completed production of the 1,000 sets, the buyer abandoned the project that required the specially manufactured ball bearings and repudiated the contract with the seller. After notifying the buyer of his intention to resell, the seller sold the 1,000 sets of ball bearings to a salvage company for $2 per set. The seller then sued the buyer for damages.
Comments (0)
There are no comments at the moment. If you found an error or think question is incorrect, tell everyone about it
Only signed in users can write comments
Signin
A is incorrect. The Uniform Commercial Code controls. The seller is entitled to be put in the position it would have been in if the contract had been performed. Two dollars per set fails to accomplish that goal. This would have been a correct answer ONLY IF the seller had not yet begun manufacturing the ball bearings. The seller incurred those costs in preparing for performance, and is entitled to recover them in order to protect its expectation interest. As explained above, the proper measure of damages here is the profit the seller would have made plus an allowance for costs reasonably incurred, minus payments received for resale of the goods.
B is incorrect. The Uniform Commercial Code controls. The seller is entitled to be put in the position it would have been in if the contract had been performed. Six dollars per set fails to accomplish that goal. The difference between the cost of manufacture and the salvage price fails to take account of the lost profit the seller is entitled to recover. As explained above, the proper measure of damages here is the profit the seller would have made plus an allowance for costs reasonably incurred, minus payments received for resale of the goods ($2 per set)—here, the salvage.
D is incorrect. The Uniform Commercial Code controls. The seller is entitled to be put in the position it would have been in if the contract had been performed. As explained above, the proper measure of damages here is the profit the seller would have made plus an allowance for costs reasonably incurred, minus payments received for resale of the goods.