Question

A Buyer (Best Buy) and Seller (Dell Computers) of computers entered into a contract whereby the Seller promised to deliver 5,000 laptop computers of a certain model, at $500 each, by February 10, 2016, to the Buyer’s warehouse, in time for a big promotional sale which the Buyer was planning for the President’s Day holiday. The Seller was only able to deliver 3,000 units, due to a labor strike. To “cover” the other 2,000 units, and make sure the Buyer had enough quantity of laptops in time for the big sale, the Buyer had to buy 2,000 units of a comparable model from another manufacturer, for a price of $700 each (a total additional cost of $400,000). a. It is unfortunate that Seller was unable to fully perform, but under contract law, Seller is not responsible for the additional costs Buyer had to pay for the other units. b. Buyer will have a valid claim against the Seller for the $400,000 in additional costs that Buyer had to pay due to Seller’s breach of contract.

Answer 1

The correct answer is option b.Buyer will have a valid claim against the seller for the $ 400000 in additional costs that Buyer had to pay due to Seller's breach of contract.

It is evident from the case facts that there is breach of contract by the Seller due to an unforeseeable event or a special event i.e the labor strike.However,the Buyer incurred additional costs (2000*200) for procuring similar laptops to meet their demand requirement from another Seller.Hence,the buyer will have a valid claim and is entitled for special damages under the contract law.