Mondo Equipment Supplier (Mondo) entered into a contract agreeing to deliver a front-end loader to Jin's Construction (Jin's) for use in a road building project which Jin's was engaged in with the City of Penticton (the City). Jin's contract with the City provided for liquidated damages of $15,000 per week for every week the road project was late in completion. (Assume the liquidated damages contract is valid and enforceable) Mondo was made aware of the contract with the City and that the front end loader was to be used for that contract and of the liquidated damages clause at the time it signed the contract with Jin's. Mondo delivered the loader two weeks after the date it was supposed to be delivered, and as a result Jin's finished the road contract two weeks late and had to pay $30,000 in liquidated damages to the City for late completion of the project. 

Will Mondo be liable for the damages which Jin's owes for late completion of the road? 

1. What are the two main legal issues? 
2. What are the tests for each of the legal issues? 
3. What is your decision and why? 

Answer rating: 100% (QA)

there are mainly two legal issues in this scenario 1 Breach of Contract by Mondo Test The primary test for breach of contract is whether there was a valid contract in place whether there was a failure ... View the full answer