Meatpackers, Inc., enters into a contract with Nevada Ranch for the delivery of a certain number of beef cattle on a set schedule. The ranch delays the first delivery for five days, aware that Meatpackers loses a certain percentage of profit each day. An award to Meatpackers of consequential damages would
A) establish, as a matter of principle, that the seller acted wrongfully.
B) provide the buyer with funds for a foreseeable loss beyond the contract.
C) provide the buyer with funds for its loss of the bargain.
D) punish the seller and deter others from similar acts.

Question

Meatpackers, Inc., enters into a contract with Nevada Ranch for the delivery of a certain number of beef cattle on a set schedule. The ranch delays the first delivery for five days, aware that Meatpackers loses a certain percentage of profit each day. An award to Meatpackers of consequential damages would
A) ​establish, as a matter of principle, that the seller acted wrongfully.
B) ​provide the buyer with funds for a foreseeable loss beyond the contract.
C) ​provide the buyer with funds for its loss of the bargain.
D) ​punish the seller and deter others from similar acts.

Quizplus · Accepted Answer

Consequential damages are awarded to the non-breaching party for a foreseeable loss beyond the contract. In this case, Meatpackers would be entitled to consequential damages for the loss of profit resulting from the delayed delivery, as it was a foreseeable consequence of the breach. The purpose of consequential damages is to compensate the non-breaching party for additional losses resulting from the breach, rather than punishing the breaching party or deterring future breaches.