Frank is the fresh produce supplier to Green Valley, an upscale restaurant. He p

Question

Frank is the fresh produce supplier to Green Valley, an upscale restaurant. He provides the restaurant with imported meat for which he is paid $1,500 per day. One day, Frank fails to deliver the meat due to personal reasons. This causes the restaurant to order from a neighboring city for $2,500. The delay in shipment results in a foreseeable loss of $1,500 in revenue for Green Valley. If Green Valley decides to sue Frank for damages,how muck is Green Valley likely to recover from Frank. Please explain your answer.

Explanation / Answer

The consequences of frank failing to deliver the meat on time are:

a) Increased cost of procurement for meat = $2500 - $1500 = $1000

b) Potential loss of revenue = $1500

Total Damage = a+b = $1000+$1500 = $2500 which should be recovered from frank

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