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3. Consider the following hypothetical case. Adam agreed to build a swimming pool in Blair's garden. The contract specified that the pool would have

3. Consider the following hypothetical case. Adam agreed to build a swimming pool in Blair's garden. The contract specified that the pool would have a diving area seven feet, six inches deep. When constructed, the diving area was only six feet deep. This was still a safe depth for diving and one which did not affect value of the pool. Blair was not happy, however, and he brought an action for breach of contract claiming the cost of having a pool demolished and rebuilt (the cost of cure), a sum of $20,000. The trial court judge rejected the claim for 'cost of cure' damages on the ground that it was an unreasonable claim in the circumstances, but awarded Blair 'loss of amenity damages' of $2500. This award was reversed by the Court of Appeal which held that damages should be awarded at the amount required to place Blair in the same position as he would have been in had the contract been performed, which in the circumstances was the cost of rebuilding the pool. In summary, there are two ways of determining damages: (i) 'cost of cure' damages $20,000 $2,500 (ii) 'loss of amenity' damages Q) As a student learning 'law and economics', how would you resolve the dispute? Justify it. Please type your answer. The recommended length is half page (maximum one page) in double-space.

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