Asked by Regan Waite on May 14, 2024
Verified
Which of the following is NOT correct with respect to consequential damages under the Code?
A) Consequential damages include damages for destruction of a warehouse caused by the explosion of nonconforming goods.
B) Consequential damages include damages for lost profits from a contract to resell goods which the seller never delivers.
C) Particular needs of the buyer need to be made known to the seller before the seller can be held responsible for consequential damages relating to those needs.
D) The buyer is not required to obtain cover, so his failure to do so does not bar him from recovering consequential damages that he could have prevented by cover.
Consequential Damages
Damages that can be claimed and are intended to compensate a party for indirect losses as a result of not fulfilling a contractual obligation.
Nonconforming Goods
Products that fail to meet the quality, specifications, or performance standards outlined in a purchase agreement.
Lost Profits
Refers to the potential earnings a business was unable to realize due to wrongful actions by another party.
- Identify the circumstances that allow for the recovery of consequential and incidental damages.
Verified Answer
Learning Objectives
- Identify the circumstances that allow for the recovery of consequential and incidental damages.
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