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Dear Tutor,
I dont understand this question. Why is the value of damage 500$?
500$ is the amount of opportunity cost. 1000$ is cost of sales. For me, 1000+500 is the value of damage.Gur is in breach of his contract to buy a consignment of goods from Yac. The goods cost Yac $1,000 to make and the selling price to Gur was $2,000. Yac had an offer to sell the goods to Hef instead for $1,500 but decided to refuse the opportunity.
What is the value of damages that Yac will be entitled to under the UN Convention on Contracts for the International Sale of Goods?A $500
B $1,000
C $1,500
D $2,000Answer: B.
Yac is entitled to claim damages of the selling price of $2,000, this is the cost of the goods under the contract plus his profit. However, he failed to mitigate his loss by selling the goods to Hef, and therefore his damages will be reduced by the amount that the loss should have been mitigated by ($1,500).Thank you in advance for your help
No, he cannot claim the difference between selling price and cost of sales ($1,000 – that figure represents profit) and then claim an opportunity cost on top of that
So your reasoning for $1,500 is incorrect
However, I’m sitting here hoping that you have selected the wrong answer because, in my thinking, the damages should be restricted to $500
Where a party suffers from the breach of another in a contract for the sale of goods, the injured party is (obviously) entitled to claim damages
But a basic principle in this type of scenario is that the injured party should take reasonable steps to mitigate their loss (restrict it to a minimum)
Yac could have (and should have) accepted the offer from Hef. By doing so, Yac’s loss arising from Gur’s breach would have been reduced to $500 and, for me, that should be the correct answer
If he had sold to Hef and made a gain of $500 and then successfully sued Gur and won damages of $500, Yac’s overall profit would have been $1,000
OK?
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