Cow's Milk Creamery, Inc., needs a certain part for its pasteurizing equipment to continue its operations and orders one for $3,000 from Dairy Supplies Company. Cow's Milk tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000. Dairy Supplies ships the part late. Cow's Milk can recover
A) $13,000.
B) $10,000.
C) $3,000.
D) $0.

Question

Cow's Milk Creamery, Inc., needs a certain part for its pasteurizing equipment to continue its operations and orders one for $3,000 from Dairy Supplies Company. Cow's Milk tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000. Dairy Supplies ships the part late. Cow's Milk can recover
A) ​$13,000.
B) ​$10,000.
C) ​$3,000.
D) ​$0.

Quizplus · Accepted Answer

Cow's Milk can recover the damages up to the amount it would have earned if the part arrived on time, which is $10,000. However, they cannot recover the cost of the part itself as it was still delivered, albeit late. Therefore, the correct choice is B, as it is the only option that represents the maximum damages that Cow's Milk can recover.