Mae sold the wheat for $4.60 per bushel, the market price, and later sued Lloyd for the difference of $400. Lloyd claims he was not notified by Mae of the resale and, hence, is not liable. Is Lloyd correct? Why or why not?

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Mae sold the wheat for $4.60 per bushel, the market price, and later sued Lloyd for the difference of $400. Lloyd claims he was not notified by Mae of the resale and, hence, is not liable. Is Lloyd correct? Why or why not?

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Mae contracted to sell one thousand bushels of wheat to Lloyd at $5 per bushel. Just before Mae was to deliver the wheat, Lloyd notified her that he would not receive or accept the wheat. Mae sold the wheat for $4.60 per bushel, the market price, and later sued Lloyd for the difference of $400. Lloyd claims he was not notified by Mae of the resale and, hence, is not liable. Is Lloyd correct? Why or why not?

Explanation & AnswerSolution by a verified expert

Explanation

Sale of Goods Contract provides certain remedies to seller in case of breach of contract by the buyer. These remedies include recovery of damages in case of non-acceptance of goods by the buyer.
In this case, Person L has not accepted the goods without giving a proper reason. This makes Person L liable to compensate Person M for the damages incurred. Compensation amount includes the difference between the agreed contractual price and the market price at the contractual time and place, plus any incidental damages and less saved expenses because of the breach.
The seller does not hold any responsibility about informing the buyer about resale of goods in the case of breach of contract by the buyer.

Verified Answer

Person L cannot be considered to be right in this situation because Person L unreasonably rejected the goods, which can be considered a breach of the Sale of Goods Contract. As a result, the decision can be taken in the favor of Person M.

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