Discuss the damage remedies in brief

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Question: At time 0, the buyer pays for the seller's promise to deliver good g at time 2. The seller renounces the contract at time 1. Perfect substitutes for good g exist in the market. A futures contract at time 1 for a substitute costs 110. The buyer, however, does not buy a substitute at time 1. Instead, the buyer waits until time 2 and purchases a substitute on the spot market, which turns out to cost 125. The buyer sues for expectation damages of 125, and the seller responds that expectation damages equal 110. The court must decide which level of damages to apply. Explain why the choice between these two damage remedies matters little to the future behavior of parties like this buyer and seller.

Reference no: EM131908452

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