Before buying a house, Dean and Donna Testa hired Ground Systems, Inc. (GSI), to

Question

Before buying a house, Dean and Donna Testa hired Ground Systems, Inc. (GSI), to inspect the sewage and water disposal system. GSI reported a split system with a watertight septic tank, a wastewater tank, a distribution box, and a leach field. The Testas bought the house. Later, Dean noticed that the system was not as GSI described—there was no distribution box or leach field, and there was only one tank, which was not watertight. The Testas arranged for the installation of a new system and sold the house. Assuming that GSI is liable for a breach of contract, what is the measure of damages?

1. If the GSI report on the septic system was complete and accurate, but GSI made a minor error in describing the location of the tank, the Testas may recover (compensatory/ consequential/ punitive/ nominal) damages.

Explanation / Answer

1.

Correct Answer:

Compensatory damage, Consequential damage

The compensatory damage will be issued, because there is a case of negligence from the end of GSI. Consequential damages, can also be issued as GSI has not fulfilled the contractual agreement.

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