Servebest contracted to sell Emessee two hundred thousand pounds of 50 percent lean beef trimmings for $105,000. Upon a substantial fall in the market price
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Servebest contracted to sell Emessee two hundred thousand pounds of 50 percent lean beef trimmings for $105,000. Upon a substantial fall in the market price, Emessee refused to pay the contract price and informed Servebest that the contract was canceled. Servebest sues Emessee for breach of contract, including (a) damages for the difference between the contract price and the resale price of the trimmings and (b) incidental damages. Decision? |
Explanation
The difference between these values have to be a reasonable amount to claim from the buyer, Company E. Company E has breached the contract and as a result, Company S has faced the loss of fall in market price for the product, which is going to yield lower profits or loss when compared to the contract.
Company E has to pay for the loss occurred. Incidental damages can also be claimed since the buyer has breached the contract.
Verified Answer
The decision is going to be favorable for Company S. Company S has the right to claim the incidental damages occurred due to the breach of contract by Company E.
Company S can recover the amount of the damages from the difference between the resale value and the market price along, with the interest on the amount.
