AB Developers Signs a Contract with CL Corp

question 3

Multiple Choice

AB Developers signs a contract with CL Corp., agreeing to build a $20 million office for the corporation. The construction contract was substantially performed. There were, however, a few minor breaches of the contract by AB Developers that made CL Corp. incur damages worth $10,000. Which of the following is most likely to be true in this scenario? ​

• A)Since there was a breach of contract, CL Corp. may not pay any compensation to AB Developers.
• B)CL Corp. needs to pay the full price under the contract since the work was substantially performed.
• C)CL Corp. needs to pay the full price under the contract less the damages suffered by it.
• D)AB Developers needs to pay nominal damages to CL Corp. for breach of contract.

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Definitions:

Utility Function

A mathematical representation of how a set of goods and services are ranked according to their utility, or satisfaction, to the consumer.

Preferences

The individual choices or tastes regarding various bundles of goods, shaping demand and consumption patterns in economics.

Indifference Curves

Graphical representations in microeconomics, illustrating combinations of goods or services among which a consumer is indifferent, meaning they have no preference for one combination over the other.

Utility Function

A mathematical representation in economics that shows the relationship between the overall utility a consumer derives from different bundles of goods.