Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a job of a different type and rank 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 in shares of SMC stock.
D) $0.

Question

Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a job of a different type and rank 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 in shares of SMC stock.
D) ​$0.

Quizplus · Accepted Answer

Rita can recover $4,500 as compensatory damages because this is the amount she would have earned under the contract with SMC before it was unjustly canceled by SMC. The law aims to put the injured party in the position they would have been in if the contract had been performed.

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