Danny LaBarbera Made a Contract to Buy a Vintage Car

question 85

Multiple Choice

Danny LaBarbera made a contract to buy a vintage car from Dupree Bolton for $20,000. He had already arranged to resell the car to a collector for $30,000. Dupree backed out of the deal, and Danny was unable to find a replacement. Danny sues Dupree. What are his damages?

• A)$10,000. This will place Danny in the same position as if the contract had been fulfilled.
• B)$20,000. This will satisfy Danny's expectation interest.
• C)$30,000. This is what Danny expected to receive from his collector
• D)Zero. Danny is no worse off than he was before the breach, since he didn't pay Dupree any of the $20,000.
• E)$5,000. Danny was obliged to mitigate his damages.

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Definitions:

Unit Variable Cost

The cost associated with producing additional units which may include materials, labor, and other variable costs.

Contribution Margin Per Unit

The selling price per unit minus the variable cost per unit, representing the portion of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.

Unit Selling Price

The price at which one unit of a product or service is sold to the customer.