Directions - The following problems are teaching hypotheticals. The learning goals for these problems are three-fold. First, the problems are designed to help you become familiar with the analytic framework (found in Section C) and learn the difference between a general damage, a consequential damage, and an incidental damage. Second, the problems challenge you to calculate the general damage award for different types of contracts. Since the problems are teaching hypotheticals, the type of contract is identified so that you can easily check the measure of general damages using the chart in Section D.2. Problem 8 requires you to make some adjustments (using concepts found in Section G) to the general damage award. Third, try to identify whether there are any consequential or incidental damages available in the fact pattern. For consequential damages, refer to Section E to identify the type of consequential damage. To help you identify incidental damages, review Section F. It is important that you first master these basic problems. In subsequent chapters, we will study the analytic framework in more detail and encounter increasingly more difficult problems.

1. Service Contract Breach #1 Worker has a contract with Driver, in which Worker promises to pay $10 in return for Driver driving Worker to the mall. Worker has a job at the mall, which pays him $100 a day, and he needs to arrive on time or Worker will not be paid. Driver knows why Worker hired Driver and that Worker will not be paid if Driver is late. Driver does not show up on time, so Worker calls Taxi, incurring a charge of 25 cents for the phone call. Taxi agrees to drive Worker, but the price is $15, a reasonable price since Taxi has had to rush over in order to get Worker to the mall on time. Identify any general, consequential, or incidental damages that Worker can recover for Driver's breach. Explain your reasoning.

2. Service Contract Breach #2 These are nearly the same facts as in question 1, except for some of the facts in the second paragraph. Worker has a contract with Driver, in which Worker promises to pay $10 in return for Driver driving Worker to the mall. Worker has a job at the mall, which pays him $100 a day, and he needs to arrive on time or Worker will not be paid. Driver knows why Worker hired Driver and that Worker will not be paid if Driver is late. Driver does not show up on time, so Worker calls Taxi, incurring a charge of 25 cents for the phone call. Taxi is unavailable, and no one else can take Worker to the mall. Worker doesn't make it to the mall and is not paid that day. Identify any general, consequential, or incidental damages that Worker can recover for Driver's breach. Explain your reasoning.

3. Real Estate ContractSeller Breach On September 1, Owner and Buyer enter a contract whereby Owner will sell and Buyer will buy a house for $100,000. The closing is to be on October 1. Buyer expects to move into the house immediately after closinga fact that Owner knew of when they entered the agreement. Just before closing, Owner repudiates the contract by selling the house to another party for $110,000. Because of the breach, it takes Buyer until November 1 to find another house to purchase. Buyer has $100 in gasoline expenses in October just from driving around to view the other houses. Additionally, Buyer incurs housing costs of $1,000 for October an expense he would not have had but for the breach. Identify any general, consequential, or incidental damages that Buyer can recover as a result of Owner's repudiation. Explain your reasoning.

4. Real Estate ContractBuyer Breach Seller wants to sell her beach condominium before the real estate market hits rock bottom. Buyer has always loved Seller's ocean-view condominium. Without using a real estate agent, Buyer and Seller enter into a contract wherein Seller agrees to sell and Buyer agrees to buy Seller's condominium for $400,000. During the escrow process, Buyer decides to back out of the contract because he found a better condominium for a much cheaper price. Unfortunately for Seller, property values in the area declined even more during her dealings with Buyer, and she was only able to sell her condominium to another buyer for $370,000. In the process, Seller had to hire a real estate agent to ensure that her condominium sold quickly. The real estate agent cost Seller $4,000. Identify any general, consequential, or incidental damages that Seller can recover for Buyer's repudiation. Explain your reasoning.

5. Employer Breach Jim is in his last year studying for a Master's of Business Administration degree. Three months prior to graduation, Shady Corp. offers Jim a one-year employment contract as a manager with a starting salary of $100,000. Jim is ecstatic to find a good-paying job so quickly, and he readily accepts the offer and signs the contract. Three weeks prior to his start date, Shady Corp. contacts Jim and says that due to a bad economy they cannot hire Jim as planned. Jim, who has student loans coming due, starts sending out rsums to every corporation in town, hoping to find any management job that he can. In searching for a job, Jim spends $100 in fees for online employment websites. Jim is called for only one interview, at Middle Corp. The company offers him an assistant manager position with a starting salary of $60,000 and an opportunity for a pay raise after one year of service. Desperate for a job, Jim accepts the position and starts working on the same day as he would have started working at Shady Corp. Identify any general, consequential, or incidental damages that Jim can recover for Shady Corp.'s breach. Explain your reasoning.

6. Employee Breach Company's business relies on many custom pieces of software written in a computer language that is obscure and unfamiliar to most programmers. Company has to update its software on a regular basis and needs someone who can program in this obscure computer language. Programmer is one of the few experts in that language. Programmer and Company enter into a two-year employment contract for a salary of $200,000 a year. After one year, Programmer wrongfully breaches the contract. Company needs an immediate replacement in order to keep its software running. Company hires a recruiter for $10,000 to search for a replacement. The recruiter successfully finds one other programmer who is suitable for the job. Company has to pay this programmer $250,000 a year in order to induce the replacement to work with Company for the remaining year of the contract term. Identify any general, consequential, or incidental damages that Company can recover for Programmer's breach. Explain your reasoning.

7. Contractor Breach Sam hires Fine Job Construction to renovate his kitchen for $30,000. Fine Job does the preliminary work of ripping out the countertops and appliances in Sam's kitchen, and Sam pays Fine Job a progress payment of $10,000, which is the fair market value of the work Fine Job has completed. However, Fine Job doesn't come back to finish the work. Sam, who has small children and cannot function in a home without a working kitchen, starts interviewing new contractors immediately to finish the job. The best deal that Sam can negotiate to complete the renovation is with Best Guys Construction for $25,000. In the meantime, since Best Guys can't start the work for one month, Sam has to expend $2,000 to rent a home with a working kitchen. Identify any general, consequential, or incidental damages that Sam can recover for Fine Job's breach. Explain your reasoning.

8. Contracting Party Breach ABC Construction enters into a contract to install a new roof on Wesley's home for $10,000 using a unique set of roofing tiles. ABC's scheduled profit on this job is $3,000. In preparation for the oneweek job, ABC purchases the roofing tar for $250 and the tiles for $2,000. ABC's workers start the job on Monday and do the preparatory work on Wesley's roof. Early on Tuesday morning, Wesley calls ABC and tells them not to send out their workers and that he is canceling their contract, having found a much better deal with a different construction company. It cost ABC $750 to pay its workers for the one day of work that they did on Wesley's roof. ABC is able to sell the roofing tar to another company for $250, but it is unable to sell the roofing tiles after posting notices on a local contractor's website and in the local papers. Due to the unique nature of the roofing tiles that were to be used on Wesley's home, ABC will be unable to use the tiles on another job. Identify any general, consequential, or incidental damages that ABC Construction can recover for Wesley's repudiation. Explain your reasoning. Assume that Wesley had prepaid to ABC Construction $1,000 of the $10,000 contract price. How would that affect your calculation?