Farmer Gibson Ordered an Irrigation Pump from Sinclair Farm Supply

question 43

Multiple Choice

Farmer Gibson ordered an irrigation pump from Sinclair Farm Supply where he has an open account. When they attempted to deliver, he refused to accept, claiming he could get a better deal elsewhere. Legally, Gibson could be charged for all damages that naturally flow from this breach. Assuming Sinclair made free deliveries and it had more pumps than customers, the damages would include

• A) only the expected profits on this item.
• B) expected profits, delivery charge, and a restocking charge.
• C) transportation as well as a restocking charge.
• D) the damages associated with Gibson not being able to properly irrigate his land.
• E) only two way transportation to Gibson's farm.

---

Definitions:

Price Risk

The risk of a change in the market price of securities affecting an investor's portfolio value.

Bushels

A unit of volume that is used in the United States for measuring agricultural commodities, such as grains.

Payoff Profile

The graphical representation of the potential financial outcomes of an investment or trade at various prices of the underlying asset.

Financial Asset

Any asset that is cash, an equity instrument of another entity, a contractual right to receive cash or another financial asset, or a contractual right to exchange financial instruments under favorable conditions.