Question

Cow’s Milk Farms needs a certain part for its pasteurizing equipment and enters into a contract to purchase the part from Dairy Supplies Inc., for $3000, with delivery promised on Monday. Cow’s Milk also notifies Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000 in business. If Dairy Supplies ships the part late, and it is not received until Wednesday, Cow’s Milk can likely recover:

a. $3,000 in compensatory damages.
b. $10,000 in consequential damages.
c. $13,000 in compensatory and consequential damages.
d. Less than $3000, because Dairy substantially performed under the contract.

Answer 1

b. $10,000 in consequential damages

Step-by-step explanation:

Cow’s Milk can likely recover $10,000 in consequential damages because they had enters into a contract agreement with Dairy Supplies Inc in order to purchase the part from Dairy Supplies Inc for $3000, with the promise to deliver on Monday by Diary Supplies due to that Cow’s Milk went ahead to also notifies Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000 in business.

Therefore in a case where Dairy Supplies ships the part late, and it is not received until Wednesday that means Cow’s Milk Farms will recover back their $10,000 from Diary Supplies for consequential damages .