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[ILO B1] [B] Witham tendered successfully for the supply of coal to the Great Northern over a period of one year. In his tender, Witham undertook to supply such quantities as Great Northern may order from time to time. Assume the tender was on Feb 15, the winner was announced on March 15, and the obligations pursuant to the tender began on April 1.

1. Suppose that on June 1, Witham informed Great Northern of intent to opt out, and 3 days later Great Northern received the registered letter to that effect. If in the tender, the opt-out notice period is stipulated as 45 days from the date of receipt by the tender awarder, on what date will obligations of the tender awardee cease pursuant to the opt-out?

2. Suppose that Great Northern placed the following orders on Witham on the following dates:

- Order Date: [Date]
- Coal (tons): [Quantity]

How many tons will the tender awardee be obligated to supply to the tender awarder?

3. Assume that the tender awarder supplied no coal to the tender awardee and plans to sue the tender awardee. How much ordinary damages is the tender awarder likely to be awarded if, in 1873, the market price of anthracite coal (P) was $427, but in the tender, the contract price (P) was stipulated at $4.02 for that year? Indicate the formula for ordinary damages (D).

Answer :

1. The obligations of the tender awardee will cease on July 16 after the 45-day notice period. According to the tender's terms, the opt-out notice period is 45 days from the receipt date of the awarder. June 4 was the date on which the recipient received the registered letter, thus adding 45 days to it would result in July 16. As a result, the obligations of the tender awardee will cease on July 16 after the 45-day notice period.

2. The tender awardee will be obligated to supply 300 tons of coal to the tender awarder. Since the Great Northern placed the following orders on Witham on the following dates and their quantities are listed below:-

Order Date Coal Tons June 4 100June 10 200According to these details, Great Northern has requested a total of 300 tones of coal from Witham. Therefore, Witham is obligated to supply 300 tons of coal to the tender awarder.

3. The formula for ordinary damages is: D3 = I (P4 - P) x QWhere,P4 = Market price = $427P = Contract price = $4.02Q = Quantity ordered = 300 tons Substitute the values: D3 = I (427 - 4.02) x 300D3 = $1,27,194.

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