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Kens owns and operates a famous candy store and makes most of the candy sold in the store. Business is particularly heavy during the Christmas season. Ken contracts with Sweet, Inc., to purchase ten thousand pounds of sugar to be delivered on or before November 15. Ken has informed Sweet that this particular order is to be used for the Christmas season business. Because of problems at the refinery, the sugar is not tendered to Ken until December 10, at which time Ken refuses it as being too late. Ken has been unable to purchase the quantity of sugar needed to meet his Christmas orders and has had to turn down numerous regular customers, some of the whom have indicated that they will purchase candy elsewhere in the future. What sugar Ken has been able to purchase has cost him 10 Cents per pound above the price contracted for with Sweet. Ken sues Sweet for breach of contract, claiming as damages the higher price paid for sugar from others, lost profits from this year’s lost Christmas sales, future lost profits from customers who have indicated that they will discontinue doing business with him, and punitive damages for failure to meet the contracted delivery date. Sweet claims Ken is limited to compensatory damages only. Discuss who is correct, and why.
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2. Implied Warranties
Shalom Malul contracted with capital Cabinets Inc. in 1999 for new kitchen cabinets made by Holiday Kitchens. The price was $10900. On Capitals recommendation, Malul hired Barry Burger to install the cabinets for $1600. Burger finished the job in March 2000, and Malul contracted for more cabinets at a price of $2300 which Burger installed in April. Within a couple of weeks the doors on several of the cabinets began to melt as the laminate began to pull away from the material underneath. Capital replaced several of the doors but the problem occurred again, involving a total of six out of 30 doors. A Holiday Kitchens representative inspected the cabinets and concluded that the melting was due to excessive heat, the result of the doors being placed too close to the stove. Malul filed a suit in a New York State court alleging among other things breach of warranties. Is he right?