On May 1,George contractually agreed to purchase a painting from Laura for $50 000.On that date,George prepaid half of the purchase price and promised to pay the other half upon delivery.Laura promised to deliver the painting to George on June 1.In anticipation of receiving the painting,George spent $10 000 building a special display case in his home.On May 15,the artist who created the painting died and the value of the painting immediately increased to $75 000.Laura therefore refused to deliver the painting to George.George is entitled to receive

Question

Quizplus · Accepted Answer

George is entitled to expectation damages which is the difference between the contract price and the market value of the painting at the time of the breach. Therefore, George is entitled to $50,000 - $10,000 = $40,000 in damages. However, since the value of the painting increased to $75,000, he is entitled to the higher amount of $75,000 - $25,000 (the amount he has already paid) = $50,000 in expectation damages. Therefore, choice C is the correct answer.

On May 1,George Contractually Agreed to Purchase a Painting from Laura