Is Vicarious Liability of Company applicable in case of Contractual Breach?

I got badly mauled by this question last semester and I'm still not clear about it. Suppose X company hires Y as a freelancer to deliver some goods on a contractual basis. Y fails to deliver on time and the buyer suffers financial losses due to it. In this case, is X liable under vicarious liability for Y's breach of contract? Option 1 says no, saying that vicarious liability is not applicable in case of contractual breaches, it's only applicable in torts. Option 2 says yes, citing the fact that X is vicariously liable for Y's actions as it has a non-delegable duty to ensure timely delivery. Can you guys please help me out and tell me which option is correct and why?