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:
A) nothing, since she was the one who repudiated the contract.
B) her $12,000 down payment since Hugh's contract with Lloyd created a novation and discharged any duty Marcella had to pay anything toward the houseboat.
C) $8,000 in restitution, which represents Marcella's $12,000 down payment less the $4,000 in damages Hugh sustained because of Marcella's breach.
D) only a nominal amount.

Question

Quizplus · Accepted Answer

Marcella may recover $8,000 in restitution, which is her initial $12,000 down payment minus the $4,000 loss Hugh incurred by selling the houseboat for $60,000 instead of the agreed $64,000 with Marcella. This calculation compensates Hugh for his loss due to Marcella's breach while returning the remainder of Marcella's down payment.

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