Contractual Remedies Business Law

Contractual Remedies Business Law

Business Law

Haply Inc. contracts with Barksdale LLC to have an engine repaired. After much negotiation, the parties agree that the engine will be repaired and reinstalled at Haply’s facilities in 5 days. Haply plans on losing $40,000 a day for each day the engine is not delivered after the five-day window (this is the cost for a replacement engine).

Haply tells Barksdale’s representatives that if the engine is not repaired on time that bad press will cause Haply to lose a client’s business totaling $3,000,000. Barksdale does not complete the contract until day 7.

It cost Haply $500 to secure the delivery of a replacement engine. The actual rental of the replacement engine cost $40,000 a day. And Haply lost the business of a client totaling $3,000,000. Haply sues Barksdale for incidental, consequential and compensatory damages. The court finds that there is a breach of contract. What are the consequential, incidental, and compensatory damages that Barksdale is liable for in this case? Be sure to define each of those terms

Solution:

Haply Inc. v. Barksdale LLC

In this case, Haply Inc. (the plaintiff) is able to sue against Barksdale LLC (the defendant) to get incidental, consequential, and compensatory damages due to its illegal or unlawful activities. For instance, on the basis of the given scenario, it is clear that there was a contract between Haply Inc. and Barksdale LLC. According to this contract, Barksdale LLC was obliged to repair as well as reinstall the pump engine within the given time period. The predetermined time period of the repairing was 5 days, but Barksdale LLC did not complete the contract in 7 days. In addition to this, Haply Inc. suffered a huge loss due to the negligence of Barksdale LLC. As a result, Haply Inc. sued Barksdale for incidental, consequential, and compensatory damages.

Incidental damages refer as the legal damages that are rationally related to the actual damages of plaintiff. For instance, in this case, Haply Inc. suffered a loss $3,000,000 due to the negligence of Barksdale LLC. On the other hand, Consequential damages are damages that occur when a party is unable to meet its contractual obligation (Miller, 2012). For case, in this scenario, negligence of Barksdale LLC was unable to replace and reinstall the pump within 5; as a result, Haply Inc. paid $40,000 per day as engine cost.

Along with this, compensatory damages are paid to recompense the applicant for loss, injury, or harm that he/she suffered due to the breach of duty of another party. In this case, Barksdale LLC is responsible to pay compensatory damages to the plaintiff because of it was unable to fulfill the terms and conditions of the contract. There was a violation of duty by Barksdale LLC; therefore, Haply Inc. suffered a huge amount of loss (Cross & Miller, 2011). In this way, in this case, Haply Inc. is liable to obtain incidental, consequential, and compensatory damages.

References

Cross, F., & Miller, R. (2011). The Legal Environment of Business: Text and Cases: Ethical, Regulatory, Global, and Corporate Issues (8th ed.). USA: Cengage Learning.

Miller, R. (2012). Cengage Advantage Books: Fundamentals of Business Law: Summarized Cases (9th ed.). USA: Cengage Learning.