Campus Bus Service Entered into a Contract with Smith Bus

question 46

Multiple Choice

Campus Bus Service entered into a contract with Smith Bus Company to purchase 10 buses.One week before Campus Bus was scheduled to receive the buses,a fire destroyed Smith's warehouse and the buses inside.As a result,Campus Bus had to purchase its buses at a higher cost from another manufacturer.If Campus Bus sues Smith Bus for damages for breach of contract under these circumstances,what defense,if any,does Smith Bus have? Assume Campus Bus did not bear the risk of loss of the goods under the contract.

• A)Smith Bus should not be excused from performance because it should be ready with contingency plans or options for all unforeseeable events.
• B)Smith Bus should not be excused because it did not act in good faith.
• C)Smith Bus should be excused from performance under the doctrine of commercial impracticability because the fire was an unforeseen event that made it impossible for Smith to perform its contractual obligations.
• D)Smith Bus is guilty of anticipatory repudiation.

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Definitions:

Middleman

An intermediary who facilitates transactions between buyers and sellers, potentially adding value in the distribution channel.

Arranging Trades

The process of organizing or facilitating exchanges of goods, services, or financial instruments between parties.

Top Management

The highest level of executives and decision-makers in an organization responsible for overall direction and strategy.

Middlemen

Intermediaries in the distribution process that facilitate transactions between producers and consumers by handling logistics, marketing, or sales.