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Breach Of Contract Assignment: Business & Acorporation Law

Question

Task: Peter, a second-hand car dealer, purchased a car in the wholesale market for $15,000. Peter contracted to sell the car to David for $20,000, but David refused to take delivery of the car. Peter sued David for breach of contract.
Requirement:
(1) What damages can Peter claim?
(2) If Peter later sells the car to another purchaser for $18,000, what damages, if any, would Peter be entitled to?

Answer

Question 1
Issue: In the present case of Breach of Contract assignment, an issue is related to the damages that could be claimed by the injured party in case of breach of contract.

Applicable law
According to Contract Act, breach of contract is referred to as a violation of the agreed terms and conditions. Section 2 of the Competition and Consumer Act 2010 considered to prepare this Breach of Contract assignment, states about the statutory remedies for breach of contract. In Australia, the Sales of Goods Act is based on the Sales of Goods Act 1893, of the UK. As per section 31 of the Sales of Goods Act, 1954, it is the duty of buyer to accept the goods, as per terms of contract (Sales of Goods Act 1954, 2018). If in case, buyer breaches the duty, then as per section 52 of the cited Act, seller has right to maintain an action for the price (Chalkidis, Androutsopoulos, and Michos, 2017). With this aspect, the court would award consequential damages in case of breach of contract. It has been acknowledged by the Australian Court, that the main objective of expectation damages is to offer a financial alternative for performance, whether such damages are ascertained by based on loss of profit, reliance basis, or cost-of-a cure basis (Marsh, 2017).

Cases
In the legal case of Commonwealth v Amann Aviation Pty Ltd, it has been held by the court, and the plaintiff is required to prove about his/her prediction of specific outcome due to performance of the contract. Moreover, this attitude is also complied in subsequent cases such as Tabcorp Holdings Ltd v Bowen Investment Pty Ltd as well as in Clark v Macourt (Barnett, 2016). The main objective of such cases to give a sufficient amount of monetary compensation for breach of performance. In the legal case of Robinson v Harman, it has been mentioned that, where the party suffers from the loss because of breach of contract, he is, as possible as the financial amount can do it, to be sited in the related situation, by considering the damages, as it the contract had been completed (Chalkidis, and Androutsopoulos, 2017).

Implementation of law in the present case scenario
By considering the present case scenario of Breach of Contract assignment, it can be said that David has violated the agreed terms of a binding contract, which leads to a breach of contract. Further, the primary aspect of monetary compensation is to put the plaintiff in the same position, as if the contract was duly performed by the party. With this aspect, in the present case, Peter purchased the car for $15,000 and agreed to sale this car for a price of $20,000. If David performed the contract, that means if he purchased the car, then in such case, Peter earned $5000. In this situation, it is assumed that there is no alternative market or buyer is found by Peter.

Conclusion
Based on the above analysis, it has been concluded that Peter can claim $5000 in the present case scenario.

Question 2
Issue
The issue in this question of Breach of Contract assignment is related to if the plaintiff finds an alternative buyer of the goods, then in such a situation what damages can be claimed by him.

Applicable law
In several circumstances, the buyer of goods may refuse to accept the goods from a seller in a wrongful manner. According to section 41 of the Sales of Goods Act 1954, there is liability of buyer in case loss is sustained by the seller because of negligence or refusal to take delivery of goods. In such a situation, the ascertainment of damages is still substitutionary (Zhang, 2019). The seller of the goods is entitled to recover the loss of sales as a result, by considering the contracted price and deduction of the expenses which would have been occurred. Moreover, justification is built into damages by considering the basis of difference in value, specifically in the contract for the sale of goods (Andrews, 2016). As per section 53 of the Sales of Goods Act 1954, damages would be computed in the difference in value deems that an injured party would seek a substitute performance from them anywhere and avoid the losses (Ganglmair, 2017). Therefore, if the alternative market is found by the seller, then the precise measure of damages is computed by considering such arm's length price (Wyner, and Casini, 2017).

Cases
In the legal case of White Arrow Express Ltd v Lamey’s Distribution Ltd., court held that, in case of no financial loss, then nominal damages should be awarded to plaintiff. Further, in the case Cardwell Shire Council v Calabrese explored in this section of Breach of Contract assignment, due to defendant repudiation of contract, plaintiff has been suffered, and therefore court awarded the damages of the amount, that have been paid under contract less cost of carrying the work.

Implementation of law in the present case scenario
In the present case scenario of Breach of Contract assignment, Peter later sale the car to another purchaser for $18000. It has been seen that amount of compensation should assist towards to put the Peter in the same position if the contract was performed. Along with this, it is also required to consider the precise measure of goods if the goods were sold to the alternative market. The reason behind the same is that, if the seller has found the alternative market and goods are sold to the same price, and then in such case, there is no actual loss occurred to the seller (Bertino, 2018). By considering this aspect within this Breach of Contract assignment, it can be said that the cost price of the goods for Peter is $ 15,000, and he was agreed to sale car to David for a price of $20,000. By this, he can earn a profit of $ 5000, if the contract was executed. However, David breaches the contract, and later, Peter sold this car to another buyer for a price of $18000. By this later can earn a profit of $3000. Although, by the original contract, David could generate the amount of profit was $5000.

Conclusion
Based on the above analysis on Breach of Contract assignment, it can be concluded that Peter could claim $2000. The reason behind the same is that it would assist towards in a position as if the original contract was executed.

References
Books and Journals
Andrews, N., 2016. Remedies for Breach of Contract. In Arbitration and Contract Law (pp. 279-333). Springer, Cham.

Barnett, K., 2016. Substitutive Damages and Mitigation in Contract Law. Breach of Contract assignment SAcLJ, 28, p.795.

Bertino, L., 2018. Breach of Contract: Automatic and Unilateral Price Reduction. European Review of Contract Law, 14(1), pp.24-59.

Chalkidis, I. and Androutsopoulos, I., 2017, December. A Deep Learning Approach to Contract Element Extraction. In JURIX (pp. 155-164).

Chalkidis, I., Androutsopoulos, I. and Michos, A., 2017, June. Extracting contract elements. In Proceedings of the 16th edition of the International Conference on Articial Intelligence and Law (pp. 19-28).

Ganglmair, B., 2017. Efficient material breach of contract. The Journal of Law, Economics, and Organization, 33(3), pp.507-540.

Marsh, P., 2017. Contract law. In Contracting for project management (pp. 65-80). Routledge.

Wyner, A. and Casini, G., 2017. A deep learning approach to contract element extraction. Legal Knowledge and Information Systems, p.155.

Zhang, M., 2019. Breach of Contracts and Remedies. In Chinese Contract Law-Theory & Practice (pp. 345-380). Breach of Contract assignment Brill Nijhoff.

Online
Sales of Goods Act 1954, 2018. (Online). Available through [Accessed on 13 April 2020]

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