Legal Quantitative Work Determination of Damages and Liability

Learning Goal: I’m working on a business law test / quiz prep and need an explanation and answer to help me learn.

[A] Suppose that the following milestones apply to a hypothetical based on Brodgen v Metro Railway. Brogden supplies coal to Metro on a regular basis. On April 1, Brogden and Metro negotiated a draft concerning the supply of coal.

Suppose that the following transactions take place:

April 5: Brogden shipped but Metro rejected 75,000 tons of coal

May 5: Brogden shipped but Metro rejected 85,000 tons of coal

May 25: Brogden shipped and Metro received 630,000 tons of coal

June 2: Brodgen shipped and Metro received the delivery of 45,000 tons of coal

July 2: Brogden shipped and Metro received 50,000 tons of coal

August 2: Brogden shipped and Metro received 125,000 tons of coal

August 29: Brogden shipped and Metro received 750,000 tons of coal

[1] On what date, if any, does an implied contract between Brogden and Metro come into force? ________ (date) [ILO C1] (2 marks)

[2] What, if any, would be the contractual liability of Metro to Brogden? Answer in aggregate tons:_____ (number) [ILO B1] (2 marks)

[3] What effect, if any, did the event of June 2 have on that contractual liability? Explain in terms of implied contact theory in one sentence only on the lines provided:___________________________________________________________________________________________ __________________________________________________________________________________________________[ILO C1] (1 ½ marks)

[4a] Identify the theory of the cause of action from the branch “Contracts” for Brogden’s claim against Metro for non-contractual liability:_________________________________________ (max limit three words)[A1/C1] (1 mark)

[4b] Identify the basis of recovery under that theory:________________________________(max limit three words)[A1] (1 mark)

[5] Using data from [B3] below, determine damages payable using the above-identified theory & recovery basis:______________ (number)

[ILO B1] (2 marks)

[B] Witham tendered successfully for the supply of coal to the Great Northern over a period on one year. In his tender, Witham undertook to supply such quantities as Great Northern may order from time to time. Assume that the tender was on Feb 15, the winner was announced on March 15 and the obligations pursuant to the tender began on April 1. Suppose that on June 15, Witham informed Great Northern of intent to opt out and 8 days later Great Northern received the registered letter to that effect.. Suppose that Great Northern placed the following orders on Witham on the following dates:

Date of Order Coal (tons)

April 12


May 3


June 18


June 30


July 15


August 12


Sept 5


Sept 15


Oct 8 110,000

If in the tender the opt out notice period is stipulated as 60 days from date of the receipt by the tender awarder as evidenced by return receipt:

[1] On what date will obligations of the tender awardee cease pursuant to the opt out? ___________ (date) [ILO A1] (1 ½ marks)

[2] How many tons will the tender awardee be obligated to supply the tender awarder? ____________ (number) [ILO B2] (1 ½ marks)

[3] Assume that the tender awarder supplied no coal to the tender awardee and plans to sue the tender awarder. How much ordinary damages is the tender awarder likely to be awarded if, in 1873, the price of anthracite coal in the market (PM) was $4.27 but in the tender the price was stipulated contract price (PK) of $4.25 for that year.

Indicate the formula for ordinary damages (DO) = _______________________ [ILO A1] (1 marks) DO=$_______________ (number) [ILO B1]

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