Winemaker Wendy, a producer of high-end organic Merlot, cont…
Winemaker Wendy, a producer of high-end organic Merlot, contracts to provide Boutique Wine Shop owner Marcus with 1,000 bottles of wine for $30 per bottle. Wendy’s cost of production is $12 per bottle. After signing the contract, Marcus spends $4,000 on custom display racks and custom labels to showcase this specific wine. He plans to retail the wine for $50 a bottle. A short time later, Wendy gets a better offer from a cruise line that offers her $60 per bottle for the 1,000 bottles. Wendy accepts the new offer and breaches her contract with Marcus. Marcus is able to fully replace the 1,000 bottles by purchasing similar quality wine from another vineyard at $45 per bottle. However, his $4,000 investment in the custom display racks and labels is completely worthless. Marcus has not made any payments to Wendy. Expectation damages are:
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