Keith Builder has prepared a bid to build a new elementary school, which must be submitted by
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Keith comes by at noon to pick up the car, but has to wait another hour before it is finally ready. Gordon apologizes, explaining that his regular brake man called in sick and he had to put another mechanic on the job. Unfortunately, the other mechanic (Gordon's 14-year old son) forgot to tighten a fitting, and the brake fluid leaks out of Keith's car every time he steps on the brake. Keith is rushing to get to the bid location. As he is turning a sharp corner on cliffside drive, his brakes fail entirely. Keith is barely able to tumble out of his car (a very rare 1969 Shelby Cobra worth $150,000) before it crashes through the guardrail and goes over the cliff.
The car lands on the backyard shed of Harry Homeowner and bursts into flame, with a ruptured gas tank. Unfortunately, Harry was using the shed to store nitrogen-based fertilizer, which, when mixed with gasoline, is highly explosive (like the Oklahoma City bombing). The resulting explosion sets Harry's main house, a $3 million mansion, on fire and it burns to the ground.
Keith has escaped with minor injuries but does not get to submit his bid. He finds out that it would have been the low bid, so he would have been awarded the contract. As it is, Keith really needed that job and now has to declare bankruptcy. All of his tools and equipment, worth $1,000,000, are sold at auction for a $100,000, resulting in a $900,000 loss.
As it turns out, Bruce was also going to mail in the check for his auto insurance that Friday, the last day of the grace period to renew the policy, which had already expired. So he had no coverage for the loss of his car or the damage he caused to Harry's property.
What are Bruce's "direct" damages resulting from Gordon's breach?
What are the consequential damages?
How much of the consequential damages will Gordon be liable for?
Related Book For
Systems Analysis And Design
ISBN: 978-1119496489
7th Edition
Authors: Alan Dennis, Barbara Wixom, Roberta M. Roth
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