Crucial Exams

Multistate Bar Examination Practice Question

A manufacturer contracted to sell a custom-built machine to a buyer for $50,000, with delivery scheduled for June 1. The manufacturer knew the buyer needed the machine to fulfill a specific, highly profitable contract with a third party starting June 2. The manufacturer breached by failing to deliver the machine. The buyer could not obtain a substitute and, as a result, lost the profits from the third-party contract. In an action for breach, what is the most likely scope of damages the buyer can recover?

  • Damages that were reasonably foreseeable to the manufacturer at the time of contracting, including the lost profits from the third-party contract.

  • Punitive damages to punish the manufacturer for its failure to deliver the machine as promised.

  • All losses actually sustained by the buyer as a result of the breach, regardless of whether they were foreseeable to the manufacturer.

  • Only the difference between the contract price and the market price of a similar machine, because lost profits are generally too speculative to be recovered.

Multistate Bar Examination
Contracts
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