Peter owned a catering company. He was looking for a celebrity chef to prepare m

Question

Peter owned a catering company. He was looking for a celebrity chef to prepare meals at a large convention. He had searched for months but could find only one available chef, Chef David. He decided to hire Chef David, who agreed to provide one day of services for $1,000. Peter knew that his catering company would generate $5,000 in profits from catering the convention. One week before the convention, before Peter had spent any money preparing for the convention, Chef David canceled, saying he had received a better offer. Peter was unable to cater the event. Which of the following statements is true?

Peter has expectation damages of $5,000.

Peter has opportunity cost damages of $0.

Peter has reliance damages of $0.

All of the above are true.

Both B and C are true.

Peter has expectation damages of $5,000.

Peter has opportunity cost damages of $0.

Peter has reliance damages of $0.

All of the above are true.

Both B and C are true.

Explanation / Answer

Ans is D

Since David could have worked for Peter who would have given him $1000

Thus opportunity cost of David=$1000

But opportunity cost of damage to David will be zero

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