Ewing's of Dallas placed a $10,000 order for dresses, F.O.B. Dallas from Marvelous Manufacturing Co in New York, for their October 1 Fall Showing. The dresses were to be shipped at a cost of $300 to the seller. In New York, Marvelous dresses were the
rage, but the boom had not yet reached Dallas. By September 15, Ewing's realized that the shop could not afford all of these dresses and called Marvelous to cancel the contract. On September 15, the market price for the dresses in New York was $9,000 and in Dallas, $5,000. On October 1, the market price had risen to $9,500 in New York and to $7,000 in Dallas. What may Marvelous do? What are the alternatives for damages from Ewing's?
Marvelous may withhold delivery, cancel the contract and either resell OR collect the difference between the market price at the time and place of tender and the contract price. If Marvelous resells in New York on September 15 in a reasonable commercial sale, it can ask for $700 ($10,000 - $9,000 = $1,000, less the $300 cost of shipping) plus whatever incidental damages are permitted.
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