Question
Melvin is an entrepreneur. He buys toy figurines based on a character called Swordsman from an overseas supplier, and he subsequently sells them locally for
Melvin is an entrepreneur. He buys toy figurines based on a character called "Swordsman" from an overseas supplier, and he subsequently sells them locally for a profit. As this figurine was issued as a limited edition item, it was highly sought after by collectors and had significant resale value.
Yolanda owned a local hobby shop. She decided to buy 200 pieces of the Swordsman figurines (at the price of $100 per figurine) from Melvin as she could not find any other local suppliers. She excitedly told Melvin that she intended to sell 10 pieces of the figurines to a special customer of hers who was willing to pay her $500 per figurine. As part of the contractual agreement between Melvin and Yolanda, Melvin agreed to deliver the figurines to Yolanda by the end of the month.
However, Melvin failed to deliver the figurines to Yolanda by the stipulated timeline. He claimed that he had some personal issues with the overseas supplier and was trying to sort it out. Yolanda was very unhappy about the failure in delivery. Her special customer could not wait indefinitely for the items and decided to cancel the order with Yolanda. This loss of the special order will cause Yolanda to lose an estimated $4,000 in profits.
During this period, the resale value of the Swordsman figurine in the secondary market has also appreciated significantly, and it is now valued at $200 per piece. If Yolanda had managed to sell all the remaining 190 figurines (from her order with Melvin) to her walk- in customers, she would have made $19,000 in profits from these walk-in sales.
Examine and discuss the four (4) aspects of damages which Yolanda should consider if she wishes to claim against Melvin for (i) the loss of profits from her deal with her special customer and (ii) the loss of profits from her walk-in customers, due to Melvin's failure to deliver the figurines. In your answer, you should also conclude with your view on whether Yolanda is likely to succeed in her claim.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started