Marcella pays $12,000 down on a houseboat which Hugh had agreed to sell to her for $64,000.Marcella then repudiates the contract.Hugh sells the houseboat to Lloyd in good faith for $60,000.Marcella may recover from Hugh:

Question

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Marcella repudiated the contract, but Hugh was still obligated to mitigate his damages by finding a new buyer for the houseboat. In this case, he sold it to Lloyd in good faith for a lower price of $60,000. The damages that Hugh sustained because of Marcella's breach were $4,000 ($64,000 - $60,000). Therefore, Marcella is entitled to recover her down payment of $12,000, less the damages suffered by Hugh, which is $4,000. Thus, she may recover $8,000 in restitution.

Marcella Pays $12,000 Down on a Houseboat Which Hugh Had