Question

Omkara, a furniture manufacturer, contracts with foam gnome for $50,000 worth of foam, which omkara will use for making ten sofas she has agreed to make for dukeâs furniture. a day before gnome is going to ship the foam to omkara, a flood destroys its entire inventory. gnome tells omkara it cannot send her the foam in time, but tells her that firmfoam can supply her with an identical shipment for $65,000. this increase in price will wipe out twenty percent of omkaraâs profit from her contract with dukeâs. omkara wants to get out of both contracts. can she

Answer 1

In this situation, it would be a breach of contract if Gnome would require Omkara to pay a higher price than the agreed price. They have already contracted the price and they both agreed to it. Omkara can enforce her right to the contract claiming that she will only pay the $50000 because it is what they have agreed upon.