The first case study we have to review is a bit tricky, let’s take a look at our scenario.

Alfred and Barbara own adjoining farms in Dry County, an area where all agriculture requires

irrigation. Alfred bought a well-drilling rig and drilled a 400-foot well from which he drew

drinking water. Barbara needed no additional irrigation water, but in January 1985, she asked

Alfred on what terms he would drill a well near her house to supply better-tasting drinking water

than the county water she has been using for years. Alfred said that because he had never before

drilled a well for hire, he would charge Barbara only $10 per foot, about one dollar more than his

expected cost. Alfred said that he would drill to a maximum depth of 600 feet, which is the

deepest his rig could reach. Barbara said, "OK—as long as you can guarantee completion by

June 1, we have a deal." Alfred agreed, and he asked for $3,500 in advance, with any further

payment or refund to be made on completion. Barbara said, "OK," and she paid Alfred $3,500.

Alfred started to drill on May 1. He had reached a depth of 200 feet on May 10 when his drill

struck rock and broke, plugging the hole. The accident was unavoidable. It had cost Alfred $12

per foot to drill this 200 feet. Alfred said he would not charge Barbara for drilling the useless

hole in the ground, but he would have to start a new well close by and could not promise its

completion before July 1.

The above case seems to me to be a binding contract that both parties have agreed to.

Now, the tricky part of this case is with the ethics involved. Alfred is, in good faith, attempting

to uphold his end of the bargain by taking the loss of time, equipment and cost to run the

equipment. The unfortunate part is that it will not be completed by the original date due to an

unforeseen accident that was costlier to Alfred than it is so far to Barbara. Alfred has not only

put in ten days of work but he did so at a higher cost per foot than he was getting paid for, and
then to top it off he also damaged his equipment. Even still, he was willing to fulfill his end of

the contract and move to a new location and get started again.

Barbara, annoyed by Alfred’s failure, refused to let him start another well. On June 1, she

contracted with Carl to drill a well. Carl agreed to drill to a maximum depth of 350 feet for

$4,500, which Barbara also paid in advance, but Carl could not start drilling until October 1. He

completed drilling and struck water at 300 feet on October 30. In July, Barbara sued Alfred,

seeking to recover her $3,500 paid to Alfred, plus the $4,500 paid to Carl. On August 1, Dry

County's dam failed, thus reducing the amount of water available for irrigation. Barbara lost her

apple crop worth $15,000. The loss could have been avoided by pumping from Barbara’s well if

it had been operational by August 1. Barbara amended her complaint to add the $15,000 loss. I

do not see this as a material breach, “a material breach occurs when a party unjustifiably fails to

perform his obligations substantially under the contract” (Kubasek, Browne, Herron, Dhooge, &

Barkacs, 2016, p. 273). Hitting a rock while attempting to dig the well does seem justifiable to

me, not to mention he was willing to continue working. Barbara also refused to let me start

another well which could have possibly been finished on time if she would have allowed him to

start it. However, it would appear that she has the rights to sue for the events that happened but

the question is what would the court find.

Let’s look at the text about compensatory damages, “the most frequently awarded

damages are compensatory damages, damages designed to put the plaintiff in the position he

would have been in had the contract been fully performed” (Kubasek, Browne, Herron, Dhooge,

& Barkacs, 2016, p. 280). This is to say that Barbra would have had the well and had it on the

time in which was originally agreed upon. Furthermore, “if the construction company, or
contractor, breaches the contract before or during the construction, the owner’s damages are

generally measured by the cost of hiring another company to complete the project, plus any

incidental costs associated with obtaining a new contractor and any costs arising from delays in

the construction project” (Kubasek, Browne, Herron, Dhooge, & Barkacs, 2016, p. 281). This is

almost exactly what has happened in our case, almost word for word what is described. Since

Alfred failed to finish, Barbra hired someone else which is the cost of hiring another company to

complete the project. Then we look at the $15,000 apple crop lost that she is claiming to have

arouse following the delay of completion originally agreed to. However, if I were Alfred I

would point out her failure to mitigate. “When a contract has been breached, the nonbreaching

party is often angry at the breaching party and may want to make the breaching party pay

through the nose. However, the courts do not allow a nonbreaching party to increase his

damages intentionally” (Kubasek, Browne, Herron, Dhooge, & Barkacs, 2016, p. 284). If I were

Alfred I would be demanding that Barbra show proof that she tried to mitigate the damages to

the crops and that she didn’t purposefully let them all die to add on to the suit. “In fact, to

recover damages in a breach-of-contract case, the plaintiff must demonstrate that he used

reasonable efforts to minimize the damage resulting from the breach” (Kubasek, Browne,

Herron, Dhooge, & Barkacs, 2016, p. 284).

For our second case let’s first start my examining the facts involved. Mundo

manufactures printing presses. Extra, a publisher of a local newspaper, had decided to purchase

new presses. Rep, a representative of Mundo, met with Boss, the president of Extra, to describe

the advantages of Mundo's new press. Rep also drew rough plans of the alterations that would be

required in Extra’s pressroom to accommodate the new presses, including additional floor space
and new electrical installations, and Rep left the plans with Boss. On December 1, Boss received

a letter signed by Seller, a member of Mundo's sales staff, offering to sell the required number of

presses at a cost of $2.4 million. The offer contained provisions relating to the delivery schedule,

warranties, and payment terms but did not specify a particular mode of acceptance of the offer.

Boss immediately decided to accept the offer and telephoned Seller's office. Seller was out of

town, and Boss left the following message: "Looks good. I'm sold. Call me when you get back so

we can discuss details." Using the rough plans drawn by Rep, Boss also directed that work begin

on the necessary pressroom renovations. By December 4, a wall had been demolished in the

pressroom, and a contract had been signed for the new electrical installations.

On December 5, the President of the United States announced a ban on foreign imports of

computerized heavy equipment. The ban removed—from the American market—a foreign

manufacturer that had been the only competitor of Mundo. That afternoon, Boss received an

email from Mundo stating, "All outstanding offers are withdrawn." In a subsequent telephone

conversation, Seller told Boss that Mundo would not deliver the presses for less than $2.9

million.

When we consider all of the facts presented there are a few issues that arise. Obviously,

we have a breach in contract in the fact that the seller wants to increase their price and because

they have the possibly to sell the presses to someone else before the contract can be reviewed, I

would ask for an injunction. “An injunction is an order either forcing a person to do something

or prohibiting a person from doing something. Most commonly, injunctions are prohibitions

against actions” (Kubasek, Browne, Herron, Dhooge, & Barkacs, 2016, p. 285). Where our

injunction comes in is the fact you don’t want the presses being sold to someone else.

“Sometimes, when a party is suing another for breach of contract, one of the parties is concerned
that before the court has had a chance to decide the case, the other party will do something to

make it impossible for the concerned party to get the relief he would be entitled to” (Kubasek,

Browne, Herron, Dhooge, & Barkacs, 2016, p. 285).

 References

Kubasek, N., Browne, M. N., Herron, D. J., Dhooge, L. J., & Barkacs, L. (2016). Dynamic

business law: The essentials (3rd ed.). New York, NY: McGraw - Hill Education.