Download Exam Question: Special Problems in Torts and Contracts - WheelCo vs. Skatco and more Exams Law of Torts in PDF only on Docsity! EXAM#____________ La Puma: Special Problems in Torts and Contracts, Final Exam, Fall 2011 Page 2 of 2 ESSAY QUESTION On January 15, WheelCo agreed with Skatco, a skateboard manufacturing company, in a writing signed by both parties, to supply Skatco with 10,000 specifically described wheels each month, for a period of ten months, beginning March 1. The stated price was $.85 per wheel. On February 1, WheelCo, in good faith, notified Skatco that WheelCo could not afford to sell the wheels at the agreed price but would charge $.90 per wheel. Skatco orally agreed to the increase in price to begin with the first installment. In a written confirmation, signed only by WheelCo and delivered to Skatco, WheelCo's secretary mistakenly typed the new price as "$.91 per wheel" rather than "$.90 per wheel." Skatco received the confirmation, but did not read it. Prior to March 1, WheelCo notified Skatco that it would deliver no wheels because it had just contracted to sell its entire output to Surfco at $1.10 per wheel. Despite Skatco's efforts, Skatco was unable to buy wheels from another supplier until May 1. The price charged by the new supplier was $1.00 per wheel. Because of the 60 day delay in obtaining a new source of supply, Skatco was delayed in delivering skateboards to Boards & Bikes [B&B], a company with which Skatco had a contract that contained a valid liquidated damages clause providing for damages of $10,000 a day for delay in delivery of skateboards. Although WheelCo knew that Skatco sold skateboards, she did not know specifically, nor did she have reason to know, that Skatco had a contract with B&B or that the contract contained a liquidated damages clause. In a suit by Skatco against WheelCo commenced on October 1, Skatco prays for the following damages: Count 1: $15,000 - the difference between the price paid by Skatco ($1.00) and the original contract price ($.85) for 100,000 skateboard wheels. Count 2: $600,000 - the amount Skatco had to pay B&B in liquidated damages Count 3: $1,000,000 as punitive damages, alleging that WheelCo's breach was malicious. In an answer to the complaint, WheelCo denies liability for damages, and contends that if it should be found liable under Count 1, its liability would be limited to $9,000, being the difference between the price paid by Skatco ($1.00) and the modified price in the written confirmation ($.91). What results on each count, and what amount of damages, if any, should be awarded? Discuss. END OF ESSAY QUESTION END OF EXAM
