User Account

All Pages

Breach of contract - remedy to injured partyyou are an

Assignment Help Financial Accounting
Reference no: EM13355981

Breach of contract - remedy to injured party.

You are an associate in the law firm of Moose and Squirrel LLC. One of the firm's clients, Natasha Transport ("Natasha"), recently sent the firm an audit letter. The letter asks the firm to provide information to Natasha's auditor concerning a possible claim involving a contract between Natasha and Baddenoff Corporation ("Baddenoff."). Captain Peachfuzz, the firm's billing partner for Natasha, negotiated the Baddenoff contract nine months ago. Captain Peachfuzz has asked you to advise him on the audit response.

The contract requires Natasha to transport valuable art to New York City for auction. Natasha's most recent shipment was hit by a train and the art was totally destroyed. Natasha did not insure the shipment as required by the contract. Natasha has not yet reported the accident to Baddenoff, so Baddenoff is unaware of the possible breach.

The exact value of the art is uncertain. Captain Peachfuzz believes the loss to Baddenoff could be from $1.1 million to $3.4 million, or even more. However, the contract provides for liquidated damages of $850,000 per shipment in the event of an uninsured loss. If Baddenoff brings a claim, the law of the State of Vida will apply. Vida courts almost always enforce liquidated damages clauses, especially when the injured party's actual damages exceed the specified liquidated damages.

Captain Peachfuzz thinks there is a possible interpretation of the contract that would only require insurance against theft, not accident. If this interpretation is accepted, Natasha would not be in breach and would not be liable. When you asked Captain Peachfuzz about the claim, he said, "The other side has a good case. Our argument is a plausible interpretation of the contract, but we're not likely to win on that argument." Captain Peachfuzz is pretty sure Natasha will sue when it finds out about the accident.

Discuss what information Captain Peachfuzz may provide to the auditor about Baddenoff possible claim against Natasha. (Assume that the amount involved is material to Natasha.)

Reference no: EM13355981

Questions Cloud

Power industry select the suitable costing system and : power industry select the suitable costing system and narrate the reasons for the same.northwest power produces
Selection of cost accounting system suitable to our : selection of cost accounting system suitable to our manufacturing process.there are two distinct types of cost
Evaluation of decision on outsourcing using sales mix : evaluation of decision on outsourcing using sales mix decision.sunny hazel the manager of cyber web services must
Calculation of unit sales volume where income equals : calculation of unit sales volume where income equals costs.delong inc. has fixed operating costs of 470000 variable
Breach of contract - remedy to injured partyyou are an : breach of contract - remedy to injured party.you are an associate in the law firm of moose and squirrel llc. one of the
Nbspcalculate various variances from the given datathe : nbspcalculate various variances from the given data.the standards for one case of liquid weed killer aredirect
Calculation of cost of goods sold using job costing : calculation of cost of goods sold using job costing system.nbspmoldingassemblymanufacturing overhead
Calculation of overheads for the monththe following are the : calculation of overheads for the month.the following are the account balances for the dilone company for the month of
Compute the cost of job order costing systemglass : compute the cost of job order costing systemglass industries uses a job-order costing system. the molding department

Reviews

Write a Review

Financial Accounting Questions & Answers

  Evaluate the amount of depreciation

Disclosure of depreciation expense in income statement - Evaluate the amount of depreciation that should be reflected on the income statement for 2006 and 2007.

  Findingnbsp the equivalent units for materials and

findingnbsp the equivalent units for materials and conversion.bell computers ltd. located in liverpool england

  Explain the significance of the acquisition date

Briefly explain the significance of the acquisition date and the date of exchange and outline how the consideration (in a business acquisition) is calculated when the acquisition of the target company is carried out in stages.

  Problem 1 - nancy company has budgeted sales of 750000 with

problem 1 - nancy company has budgeted sales of 750000 with the subsequent budgeted costsdirect materials 210000direct

  Determine present value that harding can borrow fund

Make one lump-sum payment of $1,560,000 two years from date of purchase. Determine present value, assuming that Harding can borrow funds at an 4% interest rate.

  Prepare the general journal entries for the transactions

Prepare the general journal entries for the transactions and complete a horizontal analysis. Compute the percentage to the nearest tenth of a percent.

  Are members of management ethically bound

Are members of Management ethically bound to perform unethically? I

  What factors should turner manager and her supervisor

The expansion will cost two million dollars, and is expected to increase operating earnings to $2,100,000. What factors should Turner’s manager and her supervisor, the VP of operations, consider in deciding whether to go forward with the expansio..

  What about between big and little companies

Do you think that users of financial statements would be aided if there were a distinction between financial reporting standards for public vs. non public companies? What about between big and little companies?

  Illustrate what is the total direct material cost variance

The standard materials cost to produce one unit of Product M is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. Illustrate what is the total ..

  What situation should the company lower price of its windows

Materials and labor are the only variable costs. Under what situation should the company lower the price of its windows?

  Prepare the entry to close the firm income summary account

Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $410,400 net income to the partners under each of the following separate assumptions:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd