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 relatively obsolete;its market price is only $600 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)$40,000,the difference between market price and contract price.
D)$90,000,the lost profit plus the difference between market price and contract price.

Question

Quizplus · Accepted Answer

If getting the difference between the contract price and the market price would not put the seller in as good a financial position as the seller would have been in if the contract had been performed,the seller may choose an alternative measure of damages based on the lost profit and overhead that the seller would have made if the sale had gone through.

Ace Computers (AC)is a Manufacturer