Question

Cowtown Creamery, Inc., needs a certain part for its pasteurizing equipment to continue its operations and orders one for $3,000 from Dairy Supplies Company. Cowtown tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000. Dairy Supplies ships the part late. Cowtown can recover _____________.
(A) $13,000.
(B) $10,000.
(C) $3,000.
(D) $0.

Answer 1

Answer:

(B) $10,000.

Explanation:

As in the given transaction, the customer already told the company that he wants the product by Tuesday or the company has to return the amount.  

Afterward, the company is unable to ship the part on time.  

So, the Cowtown can recover the amount of $10,000 instead of $13,000 as both parties are under the contract So, no one can escape from their responsibilities