Question

Complete Boring Corporation ships its only pump to Drills & Bits, Inc., the manufacturer, for repair. Complete Boring hires Everywhere Shipping, Inc., to take the pump to Drills & Bits and to return it to Complete Boring as soon as the repair is complete. Complete Boring is forced to suspend operations without a pump, but Everywhere Shipping does not know this. Complete Boring expects to be without the pump for five days and to lose profits of $5,000. When the pump is not returned by the end of the fifth day, Complete Boring rents a pump at a cost of $100 per day. Everywhere Shipping delays five more days before returning the pump. Complete Boring files a suit against Everywhere Shipping, asking for compensatory, consequential, and punitive damages. Will Complete Boring recover?

Answer 1

Answer: Complete Boring can recover the compensatory damages but not the consequential and punitive damages.

Rationale: By failing to return the pump on time, Everywhere Shipping breached the contract with Complete Boring Corporation. This breach results in a loss of $5000 loss of profits and an additional $500 for renting a pump for 5 extra days. These damages can be covered as compensatory damages by Complete Boring as it claims from Everywhere Shipping.

When it comes to consequential damages, there are certain conditions to be met before determining if the party who breached is liable for the damages or not. The first is if the party(Everywhere Shipping) could foresee any kind of damage that would occur due to the breach while signing the contract. The shut down of Complete Boring's operations due to the pump's absence is not foreseeable and wouldn't have been foreseen by Everywhere Shipping. Hence, consequential damages cannot be recovered by Complete Boring Corporation.  

The punitive damages in the case of Complete Boring Vs Everywhere Shipping is to punish Everywhere Shipping for the breach. Usually, this is only awarded to parties if the compensatory damages were not enough to compensate for the damage caused to Complete Boring. However, that is not the case since the amount in the compensatory damages is enough to remedy the breach of contract. Therefore, Complete Boring cannot recover punitive damages.