Question
5. [15 points] Assume you own a building that you lease out to a variety of business tenants, and your rent receipts are $200,000 per
5. [15 points] Assume you own a building that you lease out to a variety of business tenants, and your rent receipts are $200,000 per month. You sign a contract with the Acme Roofing Company (Acme) to put a new roof on the building for $50,000. However, Acme does an incredibly poor job installing the roof, and it leaks badly in the next rainstorm. As a result, you rightly refuse to pay Acme. The damage is extensive, and it ruins the equipment in the offices of all of your tenants. As a result, each of them moves out to find new space across town. Your former tenants also sue you for the loss of their equipment, and you must pay them $750,000 for that equipment. It takes you 2 months to get a new roof installed and repair the rain damage the new roof costs you $75,000 and the damage repair costs $500,000. It also takes another 3 months to get new tenants in the building at the same rental rates as before ($200,000/mo.), so you have gone 5 months with no tenants or rental income.
When you sue Acme, what are your expectation damages in this situation? What are your consequential damages? Briefly explain.
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