Then he bought corn at a greatly increased price on the market in order to fulfill commitments to his purchasers. To what damages, if any, is the grain dealer entitled? Explain.
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A farmer made a contract in April to sell to a grain dealer forty thousand bushels of corn to be delivered in October. On June 3, the farmer unequivocally informed the grain dealer that he was not going to plant any corn, that he would not fulfill the contract, and that if the buyer had commitments to resell the corn, he should make other arrangements. The grain dealer waited in vain until October for performance of the repudiated contract. Then he bought corn at a greatly increased price on the market in order to fulfill commitments to his purchasers. To what damages, if any, is the grain dealer entitled? Explain. |
Explanation
The farmer has repudiated the contract. So, the buyer has the right to claim the change in prevailing market price, at the time the buyer knows about the breach.
The actual damages occurred to the buyer is greater than the remedy since the buyer had to buy the corn at very high price in the month of October to supply to its merchants.
Verified Answer
The seller has breached the sale contract. So, the buyer can claim the cover for the damages. The seller has repudiated the contract. This gives the buyer the right to claim for the cover.
The buyer has the right to claim the change in price quoted in the contract and the market price, which is going to prevail on June 3. When the buyer has opted for the cover as remedy, the buyer is not eligible to claim the consequential damages for the same case.
