Chapter 5

1. The case of Groves v. John Wunder Co. (205 Minn. 163, 286 N.W. 235, 1939) concerned a contract requiring the defendant to level some land owned by the plaintiff. The cost of the job would have been $60,000, while the market value of the land after leveling would have only been $12,000. When the defendant breached the contract, the court awarded the plaintiff $60,000 in damages. Discuss this ruling in light of the economic theory of efficient breach. Compare the ruling to that in Peevyhouse v. Garland Coal & Mining Co.

2. Suppose that you purchase a new computer, and the seller offers a supplemental warranty that would cover any repair costs for the first year. Discuss the factors that go into the seller’s decision to offer such a warranty, and your decision about whether to purchase it.