Fernando enters into negotiations with John to deliver machines that John needs
ID: 2403036 • Letter: F
Question
Fernando enters into negotiations with John to deliver machines that John needs to produce goods. During the negotiations, John tells Fernando he needs the machines by a date certain because he has signed contracts with other stores to deliver goods to them one week after Fernando’s machines arrive. (It only takes a day to produce the goods needed for each store). A contract is signed, and Fernando inexplicably misses the deadline to deliver the machines. As a result, John breaches his contract with the stores because he can’t deliver the goods on time. What damages, if any, should be awarded to John and why?
Explanation / Answer
In a contract for the sale of goods, the usual measure of compensatory damages is the difference between the contract price and the market price plus any incidental damages caused by the breach.
Suppose John sells the goods for $ 10 produced by the machine delivered by Fernando and John sells 100,000 units. The cost of the machines to John is $ 50,000
The damages that should be awarded to John = 100,000 x $ 10 - $ 50,000
The value of damages = $ 950,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.