_____ arise(s) when the nonbreaching party, a supplier of goods or services, enters a second contract when the buyer repudiates.
A) A negative covenant
B) An injunction
C) Liquidated damages
D) Consequential loss
E) Lost volume

Question

Quizplus · Accepted Answer

This situation is known as the "lost volume" scenario. The supplier would have made a sale to the original buyer if they had not breached the contract, and therefore, the supplier has lost a potential sale due to the breach. The supplier may enter into a second contract with another buyer, which results in a "double recovery" of damages - the lost profit from the original buyer and the profit from the new buyer. This concept is based on the idea that the supplier would have had the capacity to produce or acquire the goods or services for both buyers.

_____ Arise(s) When the Nonbreaching Party, a Supplier of Goods