Dubocovich Had Contracted to Supply a Health-Food Store with Jars

question 111

Multiple Choice

Dubocovich had contracted to supply a health-food store with jars of melatonin, a hormone reported in the media as a miracle potion. After they contracted, but before delivery, the government banned the sale of melatonin so that it could be properly tested under government auspices. Dubocovich told the owner of the store, Mr. Wei, that he wouldn't be delivering the melatonin because of the government ban. The demand for the melatonin was high. Mr. Wei was very upset with Dubocovich for failing to honour his contractual obligations. Furthermore, he had given Dubocovich $5000 in advance, which Dubocovich needed and used to pay the freight costs in bringing the drug to his warehouse. Wei sued Dubocovich for breach of contract. Which of the following is correct with respect to the legal position of the parties?

• A) Wei will be successful in his breach of contract action.
• B) This is an example of a frustrated contract and Wei will lose, since the loss will remain where it has fallen.
• C) Wei will be able to get back his $5000 minus a portion of any costs Dubocovich incurred in preparing to perform the contract.
• D) When a contract is frustrated in this way, the frustrating party is responsible for any losses incurred by the other party.
• E) The contract is illegal and void.

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Definitions:

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Earnings Per Share

A company's profit divided by the outstanding shares of its common stock, showing the portion of a company's profit allocated to each share of stock.

Stock Dividends

A form of dividend payment made by a corporation to its shareholders in additional shares rather than cash, affecting the company's stock price and equity structure.

Stock Exchange Requirements

Stock exchange requirements refer to the set of rules and standards that companies must meet and maintain to have their shares listed and traded on a particular stock exchange.