K0856123

Bus Law I
Chapter 10 Review

5. Office Supply Store had a material breach in their contract with Office Work Company.

Because of their inability to deliver the promised goods, Office Work Company is entitled to

compensatory damages. The right to sue is provided by UCC § 2-712, because the non-

breaching party (Office Work Co.) is allowed to buy conforming goods from another supplier.

Expectation damages would allow Office Work Company to get paid the difference between the

$3 staplers promised and the costs of the replacement staplers. If the replacement staplers cost

Office Work Company $3.20 per stapler, they could earn the difference back of $.20 per stapler

from Office Supply Store. In the second scenario, they could be entitled to the difference of

$.50 per stapler and $.10 per stapler in shipping costs as well. In the last scenario, Office Work

Company could sue for restitution damages in order to get their money back for the original

promised staples. Because the replacement staplers cost less, they wouldn’t be likely to earn

much more than the original cost of the order. Restitution damages will return Office Work

Company to their position before the contract was created.

7. Ben Driven Motor Company can sue Speedy Delivery because Speedy did not perform after

Ben Driven completed performance. Ben Driven Motors completed performance by giving the

vans over to Speedy Delivery, and now they are entitled to performance (payment) from

Speedy Delivery. Under UCC § 2-709, Ben Driven can sue Speedy Delivery for breach of contract

because they were not paid. Additionally, Farola Bank may sue Speedy Delivery because Farola

is an intended beneficiary of the contract. The payment was supposed to be made directly to
Farola Bank, intending the bank to benefit from the contract between Ben and Speedy. Lastly, it

is likely that Farola Bank could sue Ben Driven Motors for not making their payments in general,

not due to the contract between Ben and Speedy falling through. Farola could sue Ben Motors

based on the contract they made when Ben Driven Motors borrowed the money. This would be

similar to the rights provided by UCC § 2-709 because Farola Bank completed performance by

lending Ben the money. Because Ben has not paid, they have a right to sue.