Buyer B pays $10,000 to New Orleans grain dealer D1 in exchange for D1s promise to deliver grain to Bs London office on October 1. As a result of signing this contract, B decides not to sign a similar contract with another dealer, D2, for $10,500. D1 contracts with shipping company S to transport the grain. B agrees to resell the grain on arrival in London for $11,000 to another party. B pays $100 in advance (non-refundable) as docking and unloading fees for the ships projected arrival in London.

The ship begins taking water several days out of New Orleans, and returns to port. Inspection reveals that the grain is badly damaged by salt water, and D1 sells it as cattle fodder for $500. D1 conveys the news to B in London, who then purchases the same quantity of grain for delivery on October 1 at a price of $12,500.

(7)The actual loss from the contract is $11,100; explain how this is calculated.