Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a similar job with Tech Talk, Inc., which would have paid $3,500. Rita files a suit against SMC. As compensatory damages, Rita can recover
A) $4,500.
B) $3,500.
C) $1,000.
D) $0.

Question

Quizplus · Accepted Answer

Rita can only recover the amount of money she lost as a result of SMC's breach of contract. Since she declined a similar job with Tech Talk, Inc. that would have paid $3,500, her compensatory damages would be the difference between what she would have earned with SMC ($4,500) and what she could have earned with Tech Talk, Inc. ($3,500), which is $1,000. Therefore, Rita can recover $1,000 in compensatory damages.

Rita Contracts to Work for Social Media Corporation (SMC) During