[B] Witham tendered successfully for the supply of coal to the Great Northern over a period on one year. In his tender, Witham undertook to supply such quantities as Great Northern may order from time to time. 

Assume that the tender was on Feb 15, the winner was announced on March 15 and the obligations pursuant to the tender began on April 1. Suppose that on June 15, Witham informed Great Northern of intent to opt out and 8 days later Great Northern received the registered letter to that effect.. Suppose that Great Northern placed the following orders on Witham on the following dates:

 

Date of Order Coal (tons)

 

April 12

 

25,000

 

May 3

 

75,000

 

June 18

 

45,000

 

June 30

 

200,000

 

July 15

 

90,000

 

August 12

 

65,000

 

Sept 5

 

85,000

 

Sept 15

 

35,000

 

Oct 8 110,000

 

If in the tender the opt out notice period is stipulated as 60 days from date of the receipt by the tender awarder as evidenced by return receipt:

 

[1] On what date will obligations of the tender awardee cease pursuant to the opt out?  (date) (1 ½ marks)

 

[2] How many tons will the tender awardee be obligated to supply the tender awarder?  (number) (1 ½ marks)

 

[3] Assume that the tender awarder supplied no coal to the tender awardee and plans to sue the tender awarder. How much ordinary damages is the tender awarder likely to be awarded if, in 1873, the price of anthracite coal in the market (PM) was $4.27 but in the tender the price was stipulated contract price (PK) of $4.25 for that year.

 

Indicate the formula for ordinary damages (DO) = _(1 marks) DO=$number) [ILO B1

 

(1 ½ marks)