First Principles of Business Law
Quiz: Remedies for breach of contract

Question 14

 

 

 

A, a grower of tomatoes, contracts to supply more tomatoes than he is likely to be able to grow himself.  He intends to buy surplus tomatoes cheaply from other growers, but in fact the price of tomatoes increases steeply.  A therefore defaults on a contract to supply B, who manufactures canned tomato soup.  If B cannot manufacture soup, he will lose the profits he normally makes.  In these circumstances, which of the following statements is correct?

(a) In the event of a breach of contract that may cause loss, the defaulting party is obliged to do everything that is reasonably possible to minimise the loss.

(b) In the event of a breach of contract that may cause loss, the non-defaulting party is obliged to do everything that is reasonably possible to minimise the loss.

(c) In the event of a breach of contract that may cause loss, no risks should be taken in trying to avoid the loss because additional expenditure that does not reduce the loss cannot be recovered.

 

 

 

 

 

 

 

 

 

 

  

 

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