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21. If the mother and the son join as plaintiffs and sue the tutor for breach of contract, how much, if anything, are they entitled to recover?
A mother whose adult son was a law school graduate contracted with a tutor to give the son a bar exam preparation course. «If my son passes the bar exam,» the mother explained to the tutor, «he has been promised a job with a law firm that will pay $55,000 a year.» The tutor agreed to do the work for $5,000, although the going rate was $6,000. Before the instruction was to begin and before any payment was made, the tutor repudiated the contract. Although the mother or the son reasonably could have employed, for $6,000, an equally qualified instructor to replace the tutor, neither did so. The son failed the bar exam, and the law firm refused to employ him. It can be shown that had the son received the tutor's instruction, he would have passed the bar exam.
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A is correct. Here the mother and the son failed to do anything to ensure that he would pass the bar. That was a failure to mitigate damage from the tutor's breach. The facts state that if the son had used another tutor, it would have cost $6,000, not $5,000. This is a damage that could not, by the facts, been avoided at all. So they may recover the $1,000 from the tutor as expectation damages.
Therefore, since neither the mother nor the son mitigated the damages caused by the breach by hiring another tutor, they can only recover the difference between the contract price, and the price it would have cost to replace the service that was lost.
B is incorrect. Even though these damages might have been foreseeable, the losses were not CAUSED by the breach, since they could have been avoided had the plaintiff made reasonable efforts to mitigate damages. The fact that the damages were foreseeable is irrelevant to this question since it is really asking about the mitigation of damages.
C is incorrect. Where two parties contract for a service that both parties intend to directly benefit a designated third party, both the third-party beneficiary and the promisee may sue upon the promisor's breach. Here, the woman and the tutor both intended that the tutor's services benefit the woman's son. So when the tutor breached, either the woman or her son (or both) may sue for damages.
D is incorrect. Failure to take reasonable steps to mitigate damages defeats only the claim for consequential damages, and does not deprive the mother and son of the opportunity to claim damages measured by the difference between contract and market price.