Clark_11e-AM-Ch18.doc

Clark_11e-AM-Ch18.doc - C HAPTER 1 8 B REACH OF C ONTRACT...

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141 C HAPTER 18 B REACH OF C ONTRACT AND R EMEDIES A NSWERS TO Q UESTIONS AT THE E NDS OF THE C ASES CASE 18.1—(PAGE 356) THE E-COMMERCE DIMENSION If a Web merchant loses business due to a computer system’s failure that can be attributed to malfunctioning software, can the merchant recover the lost profits from the software maker? Explain. The merchant could normally recover the lost profits from the software maker if the consequential damages were foreseeable. In other words, the same rule that applies to events in the brick-and-mortar world applies to similar occurrences in the virtual world. CASE 18.2—QUESTIONS (PAGE 359) 1A. During the trial, Boeder tried to retract his repudiation of the lease to allow Hanson to continue farming for the rest of the lease term. Should the court have considered this an acceptable substitute to mitigate Hanson's damages? No. Boeder argued that this attempted retraction, the unexpired lease term, Boeder’s land represented “a good fit for Hanson's farming operation, it was available, and Hanson still had time to prepare for the 2006 crop year.” The court concluded that the attempted retraction came too late. If “the repudiating party would be allowed to retract after a lawsuit has been commenced,” parties would be encouraged “to repudiate a contract when they think they could get better terms in an effort to force the other party to renegotiate the contract.” 2A. Hanson initially asked the lower court to enforce the contract and requested damages only in the alternative—that is, only if specific performance was not available (pleading in the alternative is discussed later in this chapter). Could the court have awarded Hanson specific performance of the lease in this case? Should that relief have been granted? Explain. The lower court held a hearing and then entered an order denying Hanson's request for specific performance, concluding that he had an adequate remedy at law (damages) and that thus equitable relief (specific performance) was not available. In other words, the court could have awarded Hanson specific performance but determined that it was not an appropriate remedy because money damages were adequate to redress any injury Hanson had suffered. This is a decision subject to a court’s discretion. By this time, Hanson had completed the 2005 fall tillage.
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142 UNIT THREE: CONTRACTS AND E-CONTRACTS Meanwhile, Boeder continued to assert that the lease was terminated until the case went trial, and he then changed his argument and asked the court to order specific performance (or find that Hanson did not mitigate his damages, as discussed in the excerpt from the North Dakota Supreme Court’s opinion in the text). Of course, the lower court had already decided that specific performance was not an appropriate remedy because money damages were adequate. The state supreme court concluded that the lower court “did not abuse its discretion in deciding specific performance was not available.” Specific performance might have been an acceptable remedy in this case, however,
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This note was uploaded on 10/11/2010 for the course MGT 301 taught by Professor Pederson during the Fall '10 term at SUNY Stony Brook.

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Clark_11e-AM-Ch18.doc - C HAPTER 1 8 B REACH OF C ONTRACT...

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