Remedies & Third Parties · Apr 7
Premise. Your client (a regional bakery) contracted in March 2025 for 50 tons of bread flour per month at $400/ton, twelve-month term. The supplier delivered three months, then refused further deliveries in June 2025. Market price at breach was $560/ton. Your client covered at $580/ton for the remaining nine months. During the three-week supply gap, two large customers ($80,000/month combined) left and have not returned. Your client had warned the supplier in February that those accounts would be at risk if supply were interrupted.
Your task. Produce a one-page memo computing recoverable damages in four sections: (1) direct cover-price differential damages (show math, name the rule); (2) foreseeable consequential damages (apply Hadley v. Baxendale to the warning conversation); (3) mitigation analysis; (4) total recoverable plus the strongest counter-argument and your response.
Mode. Instructor discretion: 45-min in-class workshop with one student walking cover math on the board, or one-week take-home, or skip. Counts toward Class Participation.
What this lab teaches. The actual arithmetic of expectation damages. Hadley v. Baxendale not as doctrine to recite but as fact-pattern test: was the loss communicated, was it foreseeable, what does the answer turn on. Cover remedy under UCC § 2-712. Mitigation as both limit and planning tool. This is the Spring capstone artifact before the final exam.
This is the Spring capstone artifact.
The damages memo you produced today is the exam in miniature: a fact pattern with multiple doctrinal pressure points, a math computation, a foreseeability question, a mitigation question, and a counter-argument the strongest litigator on the other side would actually make.
The final exam will run two or three such fact patterns. The student who knows the rules but cannot deploy them across competing pressure points will not do well. The student who can name the rule, run the math, anticipate the counter, and respond to it will.
Use the next two weeks. Practice the four-section structure: direct damages, consequential damages under Hadley, mitigation, total plus counter-argument. Bring a calculator. Bring the damages-limitations stack diagram from Module VII.