Fact Pattern 7-1 Prudence Offered to Sell Her Car to Danny for $3,000

question 7

Multiple Choice

Fact Pattern 7-1
Prudence offered to sell her car to Danny for $3,000. Danny was not sure what to do, so he asked Prudence if she would hold the offer open for him for one week for $50. Prudence said sure, and the parties signed a contract to the effect that Prudence would hold the car. A few hours, Bobby unexpectedly offered Prudence $3,500 for the car, and Prudence sold it to him on the spot. Danny decided to buy the car, but when he came by to pick it up the next day, it was gone. Prudence gave Danny his $50 back telling him that was her only obligation and that if he had any complaints, he could take it up with Bobby. Danny found a similar car the next week for $3,500 and purchased it.
-Refer to fact pattern 7-1. What damages,if any,could Danny likely collect against Prudence in litigation over the car?

• A) None
• B) Reliance damages consisting of $500
• C) Incidental damages consisting of $50
• D) Compensatory damages consisting of $500

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Definitions:

Units Started

The total number of units of product that a company begins processing over a certain period of time, marking the start of the production process.

Ending Work in Process

The value of products still in production at the end of an accounting period, including all related costs incurred up to that point.

Processing Department

A specific department within a manufacturing facility where a particular stage of production is carried out.

Cost Per Equivalent Unit

A calculation used in process costing that determines the cost to produce a single equivalent unit, considering both completed and partially completed goods.