First Principles of Business Law
Remedies for breach of contract

3. An award of damages

3.4. The purpose of damages for breach of contract

 

 

 

Read the facts and the question and then choose the best answer.

A, a dealer in raw materials, agrees to supply 10 tonnes of tin to B, a cannery owner, for $3,500 per tonne. It is a condition of the contract that payment be made in full within 30 days of delivery. A delivers the tin to B but B fails to pay within the agreed time. The price of tin has risen since the sale to B and at the time of the breach is $4,000 per tonne. A sues B for breach of contract, claiming $40,000, being the current value of the 10 tonnes of tin she would still have if she had not sold it to B.  Is A entitled to claim $40,000 as damages for B's breach of contract?

(a) Yes, the damages for breach of contract are calculated to put the plaintiff in the position they would have been in had they not entered into the contract. This means A would still have had her tin, worth $40,000.

(b) No, the damages for breach of contract are calculated to put the plaintiff in the position they would have been in had the contract been properly performed. This means that A would have received the agreed price of $35,000 for the tin.

 

 

 

 

 

 

 

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