Lars Jepsen, a Fisherman from Tofino, Regularly Sells His Catch

question 87

Multiple Choice

Lars Jepsen, a fisherman from Tofino, regularly sells his catch to packing plants in Steveston. His shipment had already left dock last Monday, but he didn't contract for its sale until yesterday. He sold this shipment for $10,000 to B.C. Packers. Jepsen still owes Sam $3000, part of his commission for having sold one of his waterfront properties. This morning he assigned to Sam, in writing, $3000 of the $10,000 owed under the contract with B.C. Packers. Unknown to Jepsen or B.C. Packers, at the time they made the contract, his transporter had gone down in a storm and all the cargo was lost. Jepsen had no insurance for loss of his boat. Which of the following is correct with respect to his legal position?

• A) This is an example of a frustrated contract.
• B) This is an example of a breach of contract by Jepson with B.C. Packers.
• C) This is an example of a mistake causing the contract between Jepson and B.C. Packers to be void.
• D) Because of the frustration, Sam has no claim against either Jepson or B.C. Packers.
• E) Despite the frustration, Sam can collect the $3000 from B.C. Packers.

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Definitions:

Zero Marginal Cost

Zero marginal cost describes a situation where producing one additional unit of a good or service does not increase the total cost of production.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, which are incurred regardless of the quantity produced.

Patent

A legal right granted by a government to an inventor, giving the holder exclusive rights to use, sell, and manufacture the invention for a certain period of time.

Zero Marginal Cost

A situation where producing one additional unit of a good or service does not increase the total cost of production.