(a) That's wrong. This question involves remedies for breach of contract; and in particular, a claim for damages.

The damages that can be claimed for breach of contract are compensatory. They have the objective of putting the plaintiff in the financial position they would have been in had the contract been properly performed. See Radford v de Froberville.

In the present case, FoodCo appears to have suffered loss because of being unable to bottle the jam in the jars supplied by Glassco. If it had been bottled, the jam would have fetched $10,000. Being unbottled, it could only fetch $2,000.

A plaintiff is required to do whatever is reasonable to minimise (mitigate) the losses caused by the breach, so FoodCo should accept the biscuit maker's offer of $2,000.

To work out the damages claimable, it is necessary to compare FoodCo's position after the breach with what its position would have been if there had been no breach. If the jam had been sold bottled, FoodCo would have spent $5,000 making the jam, and would have received $10,000 reselling it. Because the jam could not be bottled, FoodCo spent $5,000 making the jam and sold it for only $2,000. To put FoodCo in the position they would have been had the contract been performed requires damages of $8,000. Accordingly (c) is the best answer.

Answers (a) and (b) overstate the damages that can be claimed.