Widgets are manufactured by very few companies and they are often difficult to locate.On January 1,Alpha Corp contractually agreed to sell a widget to Beta Inc.Beta paid the total purchase price of $30 000 immediately.The contract required Alpha to deliver the widget on April 1.On March 25,Alpha contacted Beta and announced that it would not be able to deliver the widget.By that time,the cost of a widget had increased to $50 000.On March 28,Beta paid $2000 to an independent firm to locate an alternative widget supplier.That firm suggested Gamma Ltd.On March 30,Beta paid $50 000 to Gamma Ltd to deliver a widget by April 1.A court would probably order Alpha to pay Beta

Question

Quizplus · Accepted Answer

Alpha Corp breached the contract by not delivering the widget as promised. Beta Inc had to incur additional expenses to locate an alternative supplier and pay a higher price to Gamma Ltd for the widget. Therefore, Alpha Corp is liable for the damages caused to Beta Inc.

The damages in this case include the additional cost incurred by Beta Inc to locate an alternative supplier ($2000) and the difference in the contract price ($30,000) and the price paid to Gamma Ltd ($50,000), which is $20,000.

Therefore, Alpha Corp should pay Beta Inc a total of $22,000 ($20,000+$2,000) in damages.

The correct option is B.

Widgets Are Manufactured by Very Few Companies and They Are