Blue Rorschach Inc. has an immediate requirement for 80 laptops and contracts with Zenzo Electronics for 80 Dell laptops at $550 each. However, Zenzo Electronics breaches the contract and fails to deliver the laptops. Blue Rorschach then immediately contracts Dell Computers, buys 100 laptops at $600 per laptop and then sues Zenzo Electronics for the breach of contract. What is the amount of legal damages that Blue Rorschach can recover from Zenzo because of the breach of contract?
A) $4,400
B) $5,000
C) $4,000
D) $44,000

Question

Quizplus · Accepted Answer

The amount of legal damages that Blue Rorschach can recover from Zenzo Electronics due to the breach of contract is the difference between the contract price and the market price of the goods at the time and place of delivery. In this case, the contract price was $550 per laptop, but Blue Rorschach had to buy 100 laptops at $600 each from Dell Computers after Zenzo's breach. Therefore, the difference in price is $50 per laptop ($600 - $550 = $50). Since Blue Rorschach required 80 laptops, the total damages would be 80 x $50 = $4,000. Thus, the correct answer is C.