Asked by Jennifer Gonzalez on May 14, 2024
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Smith's of Dallas agreed to buy $10,000 worth of dresses F.O.B. Dallas from Magnifique Manufacturing Co. in New York for their October 1 Fall Showing. The cost of shipping the dresses is $300. In New York, Magnifique dresses were the rage, but the boom had not yet reached Dallas. By September 15, Smith's realized that the shop could not afford all of these dresses and called Magnifique to cancel the contract before the goods were shipped. On September 15, the market price for the dresses in New York was $9,000 and in Dallas, $5,000. On October 1, the market price had risen to $9,500 in New York and to $7,000 in Dallas. What may Magnifique do? What damages may be sought from Smith's?
F.O.B.
F.O.B. (Free On Board) is a shipping term used in international trade to indicate that the seller is responsible for the goods until they are loaded on a vessel at the specified location, after which the buyer assumes risk.
Market Price
The current price at which an asset or service can be bought or sold in a given market.
Contract Cancellation
The legal termination of a contract's obligations by one or more of its parties.
- Assess damages and remedies in a real-world scenario.
Verified Answer
Learning Objectives
- Assess damages and remedies in a real-world scenario.
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