Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jackson signs a written contract to purchase a custom sofa for his new home. The custom sofa is designed to fit perfectly in his living

Jackson signs a written contract to purchase a custom sofa for his new home. The custom sofa is designed to fit perfectly in his living room. While the sofa is being built, Jackson notifies the manufacturer that he is insolvent and can no longer fulfill his end of the contract. What remedy does the manufacturer have in this scenario?

a.) The manufacturer has no recourse in this scenario, since the buyer is insolvent.

b.) The manufacturer must put the sofa up for sale at auction, and he must share the additional profits with Jackson if the sofa sells for more than the originally-contracted price.

c.)

The manufacturer is obligated to complete production of the sofa and attempt to resell it, but he is entitled to recover any difference between the resale price and the price he contracted with Jackson.

d.)

Assuming that the sofa would be of little or no value on resale to another buyer, the manufacturer should immediately cease production and sue Jackson for the contract price, less any expenses saved by stopping production.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

7th Edition

978-0470477151, 978-0-470-5562, 470556242, 0-470-55624-2, 9780470556245, 978-0470507018

More Books

Students also viewed these Accounting questions

Question

What actions are needed to straighten out the matrix twist?

Answered: 1 week ago

Question

Additional Factors Affecting Group Communication?

Answered: 1 week ago