Assignment:
Response to the following question:
You are the Chief Operating Officer of Littleco. Over lunch, the President of Bigco offers to sell Littleco a piece of fully depreciated manufacturing equipment you need for your production line for $1,000. You tell the President of Bigco that you will buy it, and you shake on it. The Bigco President later changes his mind and decides to keep the equipment. Littleco sues Bigco for breach of contract. Assume that the Uniform Commercial Code does not apply.
1. What remedies can Littleco seek against Bigco?
2. What defenses can Bigco assert?
Littleco sells widgets to Bigco that Bigco uses in its manufacturing process to make a final product, which Bigco sells to retail consumers. Bigco runs into financial difficulty, and Bigco stops making payments to Littleco. Because Bigco fails to make payments to Littleco, Littleco becomes insolvent and is forced to file a petition in bankruptcy. Littleco sues.
3. What remedies can Littleco seek against Bigco?
4. Littleco believes that Bigco should be punished for forcing Littleco into bankruptcy and demands punitive damages as well as payment of Littleco's costs and attorneys' fees related to both the lawsuit and the bankruptcy proceeding. Will Littleco be able to recover these damages? Why or why not?
5. Littleco wants to file for an injunction to prevent Bigco from selling products that include Littleco's widgets. Will the courts issue an injunction or restraining order? Why or why not?
Rural Hospital believes that it needs the services of a surgeon to serve its market. Rural Hospital invites the surgeon to come to its community for an interview. During the interview, the Hospital Administrator orally advises the surgeon that she believes that there are enough patients to create a successful surgery practice. Rural Hospital also offers to provide an eighteen-month income guarantee through which Rural Hospital will loan funds to the surgeon until the practice is successful, and the parties enter into a loan agreement and promissory note to memorialize the loan. The loan agreement provides that the loan will be forgiven if the surgeon remains in the community for four years. The surgeon and his family move 1,000 miles to relocate to the Rural Hospital community. However, the other physicians in the community decide that they do not like the surgeon, and the other physicians refer their patients to surgeons in urban medical centers. After six months, it is clear to the surgeon that he will be unable to develop a successful practice in the Rural Hospital community, and he is fortunate to be able to return to his old practice 1,000 miles away. Rural Hospital sues the surgeon for repayment of funds advanced under the loan agreement and promissory note.
6. What remedies will Rural Hospital seek from the surgeon?
7. What defenses could the surgeon raise?
8. What clause or clauses in the loan agreement should be reviewed by the parties to determine their respective rights and obligations?