Redwood Inc, which owned a parcel of land that contained dense forests, entered into a contract with
Question:
Redwood Inc, which owned a parcel of land that contained dense forests, entered into a contract with Bunyon Corp. Bunyon was required to cut and remove the trees from a 40-hectare area. In exchange, Redwood was required to pay $150 000 and provide trucks to Bunyon to transport the cut logs from the work site. After Bunyon had cleared about 20 hectares, Redwood breached a condition of the contract by failing to provide a sufficient number of trucks. Bunyon therefore discharged the contract for breach and claimed damages. At trial, the evidence indicated that Bunyon had entered into a bad bargain. It had cleared about half of the designated area and had received $75 000 in payment from Redwood. In doing so, however, Bunyon had actually incurred $300 000 in expenses. That amount represented the true market value of the services rendered and was not at all attributable to incompetence or mismanagement. If Bunyon claims expectation damages, what amount of money should it receive? If Bunyon claims reliance damages, what amount of money should it receive? Is there any other basis upon which Bunyon could claim relief? If so, what amount of money would it receive?
Step by Step Answer:
Managing the Law The Legal Aspects of Doing Business
ISBN: 978-0133847154
5th edition
Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer