Asked by Bryce Takeyama on Jul 19, 2024
Verified
Ace Computers (AC) is a manufacturer.It entered into a contract with a retailer,Reliable Computer (RC) for the sale of 100 new XYZ model computers at $1,000 each,for delivery in six months.AC would thus make a profit of $50,000.Six months later however,the XYZ model has become almost obsolete;its market price is only $100 at that time.RC refuses to accept or pay for those computers.If AC sues,how much should it be entitled to in damages? (Ignore any incidental expenses or cost savings to AC. )
A) Nothing;when the XYZ model became almost obsolete,this excused RC from the contract.
B) $50,000,the profit AC would have made had RC not breached the contract.
C) $90,000,the difference between market price and contract price.
D) $140,000,the lost profit plus the difference between market price and contract price.
Obsolete
Refers to something that is out-of-date or no longer in use, typically because it has been superseded by newer, more efficient alternatives.
- Estimate the financial impact and apply corrective actions in cases of contract infractions involving merchandise sales.
Verified Answer
AA
Amnih AbdelrahmanJul 26, 2024
Final Answer :
C
Explanation :
The seller may recover as damages the difference between the contract price and the market price at the time and place the goods were to be delivered to the buyer.
Learning Objectives
- Estimate the financial impact and apply corrective actions in cases of contract infractions involving merchandise sales.