Section B - Scenario 1
SCENARIO: 'AeroKelp Ltd' is a deep-sea kelp harvesting company. They contracted with 'SubmersiTech' to repair their specialized underwater drones by 1st May. SubmersiTech failed to complete the repairs until 15th May. Because of this delay, AeroKelp could not harvest kelp during peak season, losing £20,000 in standard profits. Furthermore, AeroKelp lost a highly lucrative, secret contract with a pharmaceutical company worth £100,000, which required delivery of rare kelp by 10th May. SubmersiTech was completely unaware of this pharmaceutical contract.
QUESTION: What type of breach of contract has SubmersiTech committed?
ACCA · Question 48 · The law of obligations
Section B - Scenario 1
SCENARIO: 'AeroKelp Ltd' is a deep-sea kelp harvesting company. They contracted with 'SubmersiTech' to repair their specialized underwater drones by 1st May. SubmersiTech failed to complete the repairs until 15th May. Because of this delay, AeroKelp could not harvest kelp during peak season, losing £20,000 in standard profits. Furthermore, AeroKelp lost a highly lucrative, secret contract with a pharmaceutical company worth £100,000, which required delivery of rare kelp by 10th May. SubmersiTech was completely unaware of this pharmaceutical contract.
QUESTION: If AeroKelp could have easily rented replacement drones for £2,000 to continue harvesting but chose not to, how would this affect their claim for the £20,000 standard profit loss?
Answer options:
It would have no effect; SubmersiTech is liable for the full £20,000.
Their damages would be reduced to £2,000 because they failed to mitigate their loss.
They would receive £22,000 to cover both the loss and the potential rental cost.
Their claim would be dismissed entirely for contributory negligence.
60 questions · hints · full answers · grading
Expert