Anyone seen damage like this before?

It certainly looks like something snagged an edge and was pulled, so it seems conceivable that a cord might have been a culprit. It clearly would have been easier to snap if it had already been loosened so there was a gap there, but that fact the Air didn't go across the room would make that sort of damage more likely, because it looks like the computer stayed put and whatever it pulled across and the cover surrounding the hinge was what gave to release the tension.

"the cord stretched across the walk space between the bed and the desk"

That certainly reads as if it's a problem waiting to happen. Regardless, since you do not believe your son and his friend, how would you explain the damage? I'm surprised that the cost is only $200. Pay for the damage, maintain the relationship with the other family, and take it out of your son's allowance.

I don't see how this is your sons fault. If he had tripped over the wire and was injured, a reasonable person would fault the person who stretched the wire across the walk space, not the person who tripped over it.

Agreed... whether or not yanking the cord caused the problem, the damage is not your son's fault. The person who strung the cord in a walkway is at fault, not the person that trips over it. If your son walked over, grabbed the cord, and yanked on it, that would be one thing... but tripping over a cord that was recklessly placed in a walking area certainly would not be his fault.

This MBair has been highly user modified. First, the back plate wouldn't separate unless the screws holding it in place were striped or missing. Second, the back plate is one piece of aluminum. The picture shows a damaged area that is not the original aluminum back. It's been cut away and some form of plastic substituted. If it's this modified on the USB side expect simular modifications on the magsafe side.

I suspect the battery swelled on this Mac and the user disassembled it, Replaced the battery and modified the damaged backplate in order to sell it on Craigslist. I wouldn't pay a dime.

Edit: Or it's a Chinese knockoff and not even a real Apple product

Hmmm... I was thinking something didn't look right, but didn't really notice that. Interesting that the owners father said he was quoted a $200 repair fee. I doubt Apple would do such a repair on a machine that has been modified (at least not for $200). I don't even think an AASP would be able to do it as they pretty much have to follow Apple's guidelines. I'd be curious to see pics of the whole machine.

It's definitely a fake MBair. No apple dealer would touch it. Compare with a real 1st generation machine.