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In: Economics

A business concern hosted a lunch for a large group of potential clients. They hired a...

A business concern hosted a lunch for a large group of potential clients. They hired a caterer for $400, paid in advance. On the day of the lunch, the caterer did not show up on time because of a combination of a problem in their kitchen, a mechanical problem with a truck, poor decisions by employees, and bad traffic. The business was forced to order pizzas and soft drinks for $250 to feed their guests. The business sued the caterer for damages, arguing that the lack of a high quality lunch at the event led many potential clients to have a bad impression of the company, which would cost the company business down the road.

a. Is specific performance a reasonable remedy in this case? Explain.

b. What major problem would face the court if it wanted to impose expectation damages in this case?

c. If it could be determined that the business lost profits of $700 as a result of serving pizza instead of the catered lunch, calculate the level of expectation damages, reliance damages, and restitution damages in this case.

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Expert Solution

Rahul Sunny answered 2 years ago
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