Blue Scales, Inc. entered into a contract to purchase 20,000 units of raw materials from Scorpio, Inc. If Scorpio fails to deliver on its obligations, which of the following statements is true?

Question

Quizplus · Accepted Answer

In a breach of contract situation, the innocent party is entitled to recover damages that would put them in the same position as if the contract had been performed. Therefore, Blue Scales can recover the price difference in purchasing from another supplier plus any reasonable expenses incurred in finding a replacement supplier. Additionally, court costs may also be recovered. However, profits lost by Blue Scales or speculative damages cannot be recovered as they are too uncertain or speculative. Scorpio is not obligated to pay any amount it has already received from Blue Scales.