Meatpackers, Inc., enters into a contract with Nevada Ranch for the delivery of a certain number of beef cattle on a set schedule. The ranch delays the first delivery for five days, aware that Meatpackers loses a certain percentage of profit each day. An award to Meatpackers of consequential damages would

Question Options:

a. establish, as a matter of principle, that the seller acted wrongfully.

b. punish the seller and deter others from similar acts.

c. provide the buyer with funds for a foreseeable loss beyond the contract.

d. provide the buyer with funds for its loss of the bargain.

Answer: An award to Meatpackers of consequential damages would provide Meatpackerswith funds for a foreseeable loss beyond the contract.

Meatpackers loses a certain percentage of profit each day as a result of the delay. The ideal thing to do is provide Meatpackers with an award for consequential damages which in turn would provide Meatpackerswith funds for a foreseeable loss beyond the contract.

Provide the buyer with funds for a foreseeable loss beyond the contract

Explanation:

Consequential damages in contracts is different from incidental or actual damages because it causes a loss that impacts the business of the other party beyond the contract horizon, when the opposite party fails to fulfill his side of the contractual obligations.

In the scenario, Nevada's failure to deliver within agreed contractual timing is not just delaying the time of Meatpackers but as a consequence, is also causing them loss in money terms which will impact their business beyond the contract horizon.

Hence an award of consequential damages to Meatpackers will provide the buyer with funds for a foreseeable loss beyond the contract.