J&T Tavern Inc (J&T) learns of a new beer mug that contains a microchip which signals the bartender when the mug is empty permitting the bartender to direct servers to go to that table. These beer mugs are manufactured by Cool Products Limited (CPL). J&T enters into a contact to purchase 100,000 mugs at a price of $10 per mug, one half of the mugs to be delivered immediately from CPL's current inventory and the remainder to be delivered in 4 months time. It takes CPL 2 weeks to manufacture the mugs and its costs are $7 per mug.

CPL manufactures and ships 1/2 of the order (50,000) and J&T pays for them in full. The market price for the mugs then falls dramatically because a competitor of CPL is now manufacturing a mug with the same microchip feature and is selling them for $5 per mug. J&T tells CPL that is wants to cancel the order. This occurs before CPL has started to manufacture the remaining mugs. CPL wishes to pursue a claim against J&T for the balance owing under the contract.What principle would the court apply in calculating CPL's damages? How much will CPL recover? Please show your calculation of the damages.