Question
Leo operates a factory which manufactures screens for mobile phones. In September 2011, he accepted a purchase order for MT Ltd for 100,000 screens at
Leo operates a factory which manufactures screens for mobile phones. In September 2011, he accepted a purchase order for MT Ltd for 100,000 screens at $50 per piece ( total price $5 million) to be delivered on 1 November 2011. On 15 October 2011, Leo informed MT Ltd, that he would probably miss the delivery deadline because of an unexpected shortage of labour and raw material in the market and Leo asked MT Ltd to extend the deadline for two weeks. MT Ltd replied by saying:
"No matter what, you must deliver the screens to us on 1 November 2011. We need the screens urgently because we have contracted to sell and deliver 100,000 mobile phones as a total price of $100 million, to an overseas buyer on 10 November 2011."
At that moment, MT Ltd could buy ready-made screens form the market at around $120 per piece, but MT Ltd did not do so. Eventually, Leo delivered the screens to MT Ltd on 11 November 2011. MT Ltd claims that because of Leo's late delivery, MT Ltd has defaulted on the overseas buyer's order and has therefore lost $100 million. MT Ltd claims $100 million against Leo.
Advise Leo on his liability due to the late delivery. (Hong Kong or British Law)
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