Contract to buy an automobile

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Reference no: EM131304675

Mrs. Wilson enters into a contract to buy an automobile for $20,000 from Z Co., a dealer. Mrs. Wilson subsequently backs out of the contract. Z Co. then sells the vehicle to Mr. Thompson for $19,000. Z Co. sues Mrs. Wilson for breach of contract. During the trial, an accountant reports that the "cost" of the vehicle to Z Co. was $16,000. However, on cross-examination this witness testifies that of the $16,000, $2,000 are fixed costs, i.e. costs which must be paid by the dealer regardless of how many vehicles it sells.

What is the amount of damages that Z Co. should recover from Mrs. Wilson?

Suppose alternatively that:

(A) The evidence shows clearly that Mr. Thompson would have bought another similar vehicle from Z Co. if the vehicle which Mrs. Wilson agreed to buy had not been available.

(B) The vehicle was a one-of-a-kind gull wing Mercedes. If Z Co. had not had this car available, Mr. Thompson would not have purchased anything.

Reference no: EM131304675

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