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Walton's Seafood Supply Company had a two-year contract with Eastside Seafood Store to supply the retail store with a variety of fresh fish. At the

Walton's Seafood Supply Company had a two-year contract with Eastside Seafood Store to supply the retail store with a variety of fresh fish. At the beginning of the second year of the contract, Walton's had trouble meeting the needs of Eastside Seafood Store and completely stopped supplying Eastside. As a result, in order to keep its customers satisfied, Eastside began driving a refrigerated truck 50 miles to another supplier two times a week so the store could meet customer demands. The cost of making the twice a week "seafood run" was $350 per week in incremental transportation costs. Additionally, Eastside contended that they had to pay on average 25 percent more for the fish at the other supplier than was provided for in the original contract. Eastside Seafood Store averaged $4,000 a week in purchases from Walton's Seafood. Eastside filed a law suit against Walton's Seafood Supply for breach of contract and the court ruled for the plaintiff in the case.

During the damages phase of the case, Walton's expert witness took issue with the $350 per week cost of driving a truck to the alternate supply location. She argued that this was not a cost Eastside had incurred before and that the company was merely using it to run up the amount of the damages. Both parties agree that the transportation costs in question are incremental costs. Most likely the court will find that:

A) Walton's expert is correct and the court will not typically "create profits" when they did not exist before.

B) Eastside Seafood Store is entitled to these damages because they were incurred as a direct result of Walton's failure to honor the supply contract agreement.

C) Eastside Seafood Store is entitled to these damages because they were incurred as a direct result of Walton's failure to honor the supply contract agreement.

D) Eastside will most likely not be able to collect either of the amounts mentioned in the case.

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