1. On May 15 shares of Acme Industries are selling at $16 per share. Smith agrees to deliver 1,000 shares to Jones on June 1 at $20. On June 1 Acme is selling at $30 per share and Smith reneges. By June 5 Acme is selling at $12. Jones sues for breach of contract asking for $10,000 – the difference between the contract price and the market price at the time of the breach. Smith argues that Jones might have held the shares rather than selling them immediately and that the market price of $12 should be used in determining damages; consequently, Smith argues, he should not have to pay anything. What is the appropriate measure of damage?

2. In the summer of 1973 X chartered Y's ship for seven years beginning in 1974 at a rental of $1 million per year. After the Yom Kippur War, the demand for shipping soared and Y refused to deliver the ship, renting the ship to someone else for a six-month charter at $3 million. X sued for breach of contract. Justice moves slowly, and by the time the matter reached trial, shipping was in the doldrums. Multiyear charters that were going for $4 million per year in 1974 were available for $200,000 in 1977 when the case finally came to trial. The defendant argued that it did the plaintiff a favor by breaching; since the plaintiff was better off following the breach, Y argued, there were no damages.