Donna and Alan Smith wanted to raise emus, which are flightless Australian birds that look like ostriches. The creatures reproduce rapidly in almost any terrain and are sold for their meat, which is high in protein and low in fat, and for their oil, leather, and feathers. The Smiths paid Tomie Clark, the manager of Penbridge Farms, $4,000 as a down payment for a “proven breeder pair.” Since it is impossible to discern an emu’s gender by looking, the Smiths asked Clark several times if the two birds were male and female, and he assured them that the pair had successfully produced chicks the previous breeding season. The Smiths placed the prospective lovebirds in the same pen, but the breeding season passed without a hint of romance. Donna Smith phoned Penbridge Farms, which advised her on a procedure used to determine gender. Donna performed this task and learned that the emus were both gentlemen. The would-be breeders asked for their money back but Penbridge refused, so the Smiths flew into court. The trial judge awarded the couple $105,215, representing lost profits from their anticipated chicks. Penbridge appealed, arguing that a buyer cannot count her chicks before they have hatched. Issue: Did the trial court err by awarding lost profits? Excerpts from Judge Popovich’s Decision: [Penbridge claimed that the] evidence was speculative and insufficient to support an award of consequential damages, including damages for lost profits. [Penbridge argued that, since] the breeding of emus is a relatively new business, and there is no reliable data to project the ultimate success in breeding emus, the [Smiths’] claims for loss of chick production are entirely speculative and do not meet the “reasonable certainty” requirement of the law of damages. The Uniform Commercial Code provides the following circumstances for the recovery of consequential damages resulting from the breach of the seller: any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by “cover” or otherwise. [UCC §2-715(2).] The determination of damages lies with the fact finder, who weighs the evidence and assesses the credibility of the witnesses. Although the court recognized that emu breeding was a relatively new commercial business, it determined that the award of consequential damages could be calculated with a reasonable degree of certainty from the evidence adduced at trial. The court below initially found that the value of a three-month old chick produced from the [previous] season was $5,000. The lower court then concluded that [the Smiths] suffered incidental and consequential damages in the amount of $90,000.00. From our thorough evaluation of the record, we conclude that the evidence was sufficient for the lower court to measure lost profits with a reasonable degree of certainty. The basis for this rule is that the breaching party should not be allowed to shift the loss to the injured party when damages, even if uncertain in amount, were certainly the responsibility of the party in breach. Order affirmed. Required: a. What are incidental damages? b. What are consequential damages?
> The MacNabs purchased property from Richard Harrington’s client. The MacNabs came to the closing with an uncertified personal check drawn on their Merrill Lynch cash management account for $150,128.70. When Harrington called Merrill Lynch, an employee to
> Jeff Messing attempted to cash a check for $976 at a Bank of America branch office. The check was made out to Messing and drawn on the Bank of America. A teller asked Messing to provide identification. Messing presented his driver’s license and a major c
> In the mid-1950s, Richard Boeken began smoking Marlboro cigarettes at the age of 10. Countless advertisements, targeted at boys aged 10 to 18, convinced him and his friends that the “Marlboro man” was powerful, healthy and manly. Eventually, Richard chan
> During the Jewish holidays, Fallsview Glatt Kosher Caterers organized programs at Kutcher’s Country Club, where it provided all accommodations, food and entertainment. Fallsview sued Willie Rosenfeld, alleging that he had requested accommodations for 15
> Joseph Britt, a detective, enrolled in a Master’s Degree program at Chestnut Hill College in Pennsylvania. Chestnut Hill promised students credit for life experience. The college promised Britt important credits for his life experience if he enrolled, an
> Roger DeMasse and five others had been hourly employees-at-will at ITT Corporation for many years. ITT issued an employee handbook, which it revised four times over two decades. The first four editions of the handbook stated that within each job classifi
> Mr. W sells fireworks. Under Texas law, retailers may only sell fireworks to the public during the two weeks immediately before the Fourth of July and during two weeks immediately before New Year’s Day. And so, fireworks sellers like Mr. W tend to lease
> Mason was a surgeon/apothecary in the English town of Thetford. Davis wished to apprentice himself to Mason. The two agreed that Davis would work for Mason and learn his profession. They further agreed that if Davis left Mason’s practice, he would not se
> The Washington, D.C. police suspected Antoine Jones of being a drug dealer. Without a valid search warrant, they attached a GPS tracking device to his car. For 28 days, they used the GPS to determine his whereabouts. Based on this evidence, Jones was con
> Driving along the Nebraska State Highway just after midnight, Dennys Rodriguez briefly swerved onto the highway shoulder, which is a violation of Nebraska law. At 12:06 a.m., Officer Morgan Struble pulled Rodriguez over for erratic driving. Struble quest
> Jeffrey Skilling was president and chief operating officer of Enron Corporation, the seventh largest company in America in terms of revenue. At least, that is what everyone thought. Ten months into Skilling’s term of office, Enron filed for bankruptcy pr
> U.S. law provides that “whoever utters any obscene, indecent, or profane language by means of radio communication shall be fined or imprisoned not more than two years, or both.” The Federal Communications Commission (Commission) has been instructed by Co
> “Mrs. F” was a licensed social worker in Maryland. One of her clients, “John Doe,” was convicted of child abuse and sex offenses involving his minor granddaughter. The Board of Social Work Examiners, an administrative agency, learned that Mrs. F. had lik
> Cyberheat, Inc., ran sexually explicit websites for consenting adults. It hired other companies, called affiliates, to drive potential subscribers to its sites. The affiliates were paid a fee for each subscriber they generated. The contract that Cyberhea
> See the chapter opener. Connie Daniell argued that Ford was both (1) negligent because it did not warn her that there was no opening mechanism in the trunk and (2) strictly liable for this design defect. Ford sought summary judgment. Issue: Was Ford n
> Ibrahim Boumelhem, aged four, began playing with a Bic disposable lighter that his parents had purchased. He started a fire that burned his legs and severely burned his six-month-old brother over 85 percent of his body. Ibrahim’s father sued Bic, claimin
> The Alden Leeds company packages, stores, and ships swimming pool chemicals. The firm does most of its work at its facility in Kearns, New Jersey. At any given time, about 21 different hazardous chemicals are present. The day before Easter, a fire of unk
> On a warm California day, there were about 30 personal water craft (jet skis) operating on Coyote Lake. The weather was fair and visibility good. Anthony Nguyen and Rachael Truong went for a ride on Anthony’s Polaris watercraft. Cu Van Nguyen and Chuong
> Cornell professor Joan Jacobs Brumberg attended a university fundraiser catered by Cipriani. During the event, she feasted on fancy appetizers. About 30 minutes later, she felt intense abdominal pain, which did not go away. Weeks later, her doctors remov
> Juana Curry and William Moore, customers of AvMed Insurance, took care to protect their private information. They destroyed mail that contained sensitive data and avoided uploading any such information online. Despite their care, they both became victims
> At the University of Arizona, the Epsilon Epsilon chapter of Delta Tau Delta fraternity gave a welcoming party for new members. The fraternity’s officers knew that the majority of its members were under the legal drinking age, but they permitted everyone
> Helen Palsgraf was waiting on a railroad platform. As a train began to leave the station, a man carrying a package ran to catch it. He jumped aboard but looked unsteady, so a guard on the car reached out to help him as another guard, on the platform, pus
> Biswell operated a pawn shop and had a license to sell "sporting weapons". Treasury agents demanded to inspect Biswell's locked storeroom. The officials claimed that, the Gun Control Act of 1968 gave them the right to search without a warrant. That law
> The Family Smoking Prevention and Tobacco Control Act (FSPTCA) instructed the FDA to issue regulations requiring cigarette packaging to contain graphics depicting the negative consequences of smoking. After holding hearings on its proposed regulation, th
> Christianne Carafano is a film actor under the stage name Chase Masterson. Someone posted a profile of her on the Matchmaker.com Internet dating service. This phony profile stated that Carafano was “looking for a one-night stand” and for a “hard and domi
> Duke Power used a high school completion requirement and an intelligence test in hiring and promotion. The result was that fewer minority applicants qualified for jobs at Duke Power. Griggs sued under Title VII. Issue: Does Title VII proscribe tests that
> When they applied for life insurance from Farm Bureau Life Insurance Company ("Farm Bureau") in 1999 Wyoming resident Gary Pehle and his wife Renna did not know they were infected with the Human Immunodeficiency Virus ("HIV"). Farm Bureau collected the i
> Hardingham was a recovering alcoholic. Defendant United Counseling Service (UCS) gave him a job as an emergency services counselor. Halpin, UCS's executive director, learned that Hardingham was again drinking. Halpin and other UCS employees went to Hardi
> Prosenjit Poddar killed Tatiana Tarasoff. Tatiana's parents claimed that two months earlier Poddar had confided his intention to kill Tatiana to Dr. Lawrence Moore, a psychologist employed by the University of California at Berkeley. They sued the univer
> Victor Hernandez had worked for more than 20 years as a custodian at a public power plant and had received training in health and safety rules from the Occupational Safety and Health Administration (OSHA). He took a second job as night custodian at an el
> Maria Parajon sued Diana Pereda for injuring her in a car accident. During voir dire, Parajon’s lawyer asked potential jurors: “Is there anybody sitting on this panel now that has ever been under the care of a physician for personal injuries, whether you
> Caldwell agreed with Duke/Fluor Daniel (D/FD) to install a power plant cooling system in Aiken, South Carolina. The contract stated that Caldwell would pay liquidated damages of $5,000 per day if the system was late. Marley agreed to ship to Caldwell all
> Exxon marketed gasoline to retailers in three ways. Franchisees (who owned local gas stations) were required to purchase a minimum number of gallons per month at the dealer tank wagon price (DTW) set by Exxon. Jobbers (distributors who could resell to de
> J. Sanders, Inc. had a contract with the federal government to install the heating system at a federal prison camp. The company negotiated with Superior Boiler Works to purchase three large commercial units. On March 27, Superior sent a proposal to Sande
> Ivan Tepper, the CEO of Delta Star, met with the sales manager at Michael’s, a flooring company. In a verbal agreement, he hired Michael’s to install carpet in the entryway of his office suite, and tile in his personal office and the office of Nash, his
> Sarah Jones, a high school teacher and Cincinnati Bengals cheerleader, was the subject of several posts on TheDirty.com, a gossip website run by Nik Richie. Anonymous submissions accused Jones, among other things, of being promiscuous with many football
> ProCD sold SelectPhone, a database containing information from 3,000 telephone directories. It sold the software to consumers for $150; business paid a much higher price. Every box containing the consumer version of SelectPhone was wrapped in plastic shr
> LAN Systems, Inc. (“i.LAN”), helps companies monitor their computer networks. NetScout Service Level Corp., formerly known as NextPoint Networks, Inc. (“NextPoint”), sells sophisticated software that monitors networks. In 1998, i.LAN and NextPoint signed
> Gene and Martha Jannusch owned a food concession business and believed they had agreed to sell it to Lindsey and Louann Naffziger. When the Naffzigers backed out, the Jannuschs sued. The trial court ruled that there had been no meeting of the minds, and
> Christopher Rottner’s computer began malfunctioning – its performance decreased, and the Internet speed was sluggish. Searching for a solution, he found a free trial of PC TuneUp online from AVG. AVG claimed that the software would boost Internet speed,
> Ethel Flanzraich, 78 years old, slipped and fell on property owned by Robin’s Wood and broke her left arm and left leg. Flanzraich sued, claiming Robin’s Wood employee, Anthony Monforte, had negligently painted the stairs on which she fell. Robin’s Wood
> Legends are Forever, Inc. (Legends) trademarked the slogan “Legends are Forever.” When Nike used the slogan in an ad campaign featuring basketball player Kobe Bryant, Legends sued Nike. But, during discovery, Legends repeatedly failed to comply with Nik
> Michael Brooks desperately needed financing for his company, BrooksAmerica, so he agreed to a sale-leaseback agreement with Terminal Marketing Co. Terminal would pay BrooksAmerica $250,000, and in exchange would obtain title to BrooksAmerica's computers
> MSC owned a shopping center and leased space to Tenet for use as an outpatient surgery and general medical practice. According to the lease, Tenet could assign with the consent of the lessor, and said consent would not be unreasonably withheld. MSC sold
> The California Department of Parks and Recreation (DPR) and Delaware North Companies (DNC) entered into a contract giving DNC the right to operate a concession stand at a state park in San Diego for 10 years. Four years into the contract, DNC assigned it
> Miller listed her home for sale. On August 4th, Norman made an offer, specifying that it must be accepted by 5:00 p.m. on August 5th. Miller received the offer, made several changes, signed it, and returned it to Norman. Norman did not respond. On August
> The state of Alaska entered into a contract with Corrections Corporation of America (CCA), a private company, to house Alaska’s inmates. The contract required CCA to abide by the terms of a settlement agreement between the state and its inmates known as
> Juzwiak was a tenured teacher at Hightstown High School in New Jersey. He received three emails from someone who signed himself “Josh,” with the address, “Josh Hartnett “. The teacher did not know anyone of that name. These emails said: 1. Subject line:
> After his wife left him, Anthony Elonis changed his Facebook name to “Tone Dougie” and began posting self-styled rap lyrics containing violent language and imagery about his friends and family. Elonis always posted disclaimers stating that the lyrics wer
> For years, Hai Yun, a Chinese instrument manufacturer, made high-quality drums for Armadillo, which was a major distributor of musical instruments in the United States. Armadillo put great time and effort into developing a new line of drum kits called “D
> Byblos sold off price designer clothing manufactured by an Italian parent company. Morris & Sons was a Chicago retailer that had been selling men’s and women’s clothing for 40 years. Aaron Krichevsky, the president of Morris, contacted Patricia Saracini,
> Edward and Kelly Kiesel bought a trailer from James Lile, the owner of Lile’s Trailer Sales. That same day, the Kiesels used the trailer. The next morning, after an all-night rain, the Kiesels noticed water inside the trailer, near the door. The next tim
> Zion Temple First Pentecostal Church ordered new choir robes from Brighter Day Bookstore, a retailer that sold robes manufactured by Murphy Cap & Gown. When Brighter Day delivered the robes to the Zion Temple, the church members found many faults. They
> Burton is a Vermont-based designer, manufacturer, and seller of snowboards. ViQuest is a manufacturer of injection-molded products based in Shanghai, China. Burton and ViQuest contracted for ViQuest to manufacture Burton’s snowboard bindings. The agreem
> In setting rules for Internet infrastructure, the FCC ruled that broadband ISPs are not common carriers and, therefore, not subject to rules that require equal treatment for all their customers. However, the Commission later became concerned that ISPs mi
> Machado Ford published the following newspaper ad: “Buy a New Ford and Get $3,000 Minimum Trade-In Allowance.” Izadi attempted to purchase a new Ford Ranger valued at $6,595 for $3,595 in cash plus his trade=in (assuming the minimum trade=in allowance).
> James Huff was the chairman of the Kenton County Airport Board, which manages the Cincinnati/Northern Kentucky International Airport (CVG). While at a conference in Italy with his wife Bertha and a colleague named Larry Savage, Huff used his iPhone to ca
> Deborah Ehling, a registered nurse and paramedic who worked at the Monmouth-Ocean Hospital Service Corporation (MONOC) reacted on her Facebook page to a shooting. Her Facebook privacy settings limited access to just “friends.” Management members were not
> Chelsea Chaney was a seventeen-year-old high school student in Fayette County, Georgia. At a county-wide Internet safety seminar, Curtis Cearley, the District’s technology director, presented a PowerPoint slideshow to illustrate the permanent and often-e
> While attempting to pass several cars on a two-lane road, Campbell drove into oncoming traffic. An innocent driver swerved to avoid Campbell and died in a collision with a third driver. The family of the deceased driver and the surviving third driver bot
> Late one night, an anti-abortion protestor named Robert Thomas climbed into a dumpster located behind the Women's Advisory Center, an abortion clinic. He found documents indicating that the plaintiffs were soon to have abortions at the clinic. Thomas gav
> Organon fired John Soldau, then sent him a letter offering to pay him double the normal severance pay, provided Soldau would sign a full release for any claims he might have against the company. Soldau signed the release and deposited it in the nearest p
> The plaintiffs sued Netscape, claiming that its SmartDownload software illegally captured private information about files they downloaded from the Internet. Plaintiffs downloaded the SmartDownload software from a page on Netscape’s web that promoted the
> Bayway Refining and Oxygenated Marketing and Trading A.G. (OMT) were both in the business of buying and selling petroleum products. Bayway agreed to sell OMT 60,000 barrels of gasoline, and OMT faxed a confirmation letter stating that it represented the
> Matthew Gabriel was a student in Professor Pumo’s immunology class. Professor Pumo’s syllabus outlined course requirements and stated that “plagiarism will not be tolerated.” After grading the first assignment, Professor Pumo realized that many papers ha
> David Chase was a television writer-producer with many credits, including a detective series called The Rockford Files. He became interested in a new program, set in New Jersey, about a “mob boss in therapy,” a concept he eventually developed into The So
> When a Tom Cat Bakery delivery van struck Elizabeth Nadel, she suffered significant injuries, Nadel filed suit. Before the trial, Tom Cat’s attorney offered a $100,000 settlement, which Nadel refused. While the jury was deliberating, the bakery’s lawyer
> Eileen Norkunas owned a home in Baltimore, Maryland. The Groves and the Cochrans expressed an interest in buying the house. The two couples drafted a handwritten letter, stating: Letter of Intent We, Rebecca Cochran, Robert Cochran, Hope Grove and Robert
> An offer is an act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms. Sometimes we forget that by making a valid offer, we give that power to the other person. Sometimes corporate officers
> Attorney James Mason represented Nelson Serrano, who was accused of killing four people in Central Florida. But Serrano had an alibi: On the day of the crime, hotel surveillance in Atlanta had captured him on video – both before and after the murders. Th
> Elijah Turley was a steelworker at the Lackawanna company’s plant near buffalo, New York. For over a decade, he was the only African-American in his department. For the last three years of his employment, Lackawanna employees tormented and degraded Turle
> Sharon Yeagle was the Assistant to the Vice President of Students Affairs and Virginia Polytechnic Institute and State University. One of Yeagle’s duties was to help students apply to the Governor’s Fellows Program. The school newspaper published an arti
> Citizens Publishing was a family-owned corporation that published the Ellwood City Ledger and another local newspaper. Bud Dimeo had been the company’s sole photographer for over 35 years. When the needs for daytime photography declined, Citizens began r
> A union representing workers at Truitt Manufacturing Company requested a raise of 10 cents per hour for all members. The company countered with an offer of 2.5 cents, arguing that a larger increase would bankrupt the company. The union demanded to examin
> For 12 years, David Brune taught theater and drama at the Dalton School, an elite private school in New York City. Like other Dalton faculty, he worked on a renewable one-year contract. The school chose Thoroughly Modern Millie as the middle school’s an
> Exide Technologies issued repeated warnings to Robert Peterson for driving forklifts too fast and violating other safety rules. After he was injured in a forklift crash, Exide granted him FMLA leave for 10 days while he recovered. Peterson’s manager fire
> The voters of Washington State passed the Medical Use of Marijuana Act (MUMA) which stated that: Humanitarian compassion necessitates that the decision to authorize the medical use of marijuana by patients with terminal or debilitating illnesses is a pe
> The Tufte family leased a 260-acre farm from the Travelers Insurance Co. Toward the end of the lease, Travelers mailed the Tuftes an option to renew the lease. The option arrived at the Tuftes’ house on March 30, and gave them until April 14 to accept. O
> The Rosenbergs owned a Dairy Queen in Grand Forks, North Dakota. They agreed in writing to sell the Dairy Queen to Mary Pratt. The contract required her to pay $10,000 down and $52,000 over 15 years, at 10 percent interest. Two years later, Pratt assigne
> Mary Johnson signed a contract with Mayflower to perform repair work on her home for a fee of $25,900. Mayflower arranged for Johnson to pay for this work by borrowing money from Sterling Resources. The note she signed with Sterling had an unconscionably
> Steven Vlohotis was a salesman for NESCOR, a home improvement company. He convinced the Antunas to sign a consumer credit contract with NESCOR to install vinyl siding and windows. The contract provided that the Antunas would pay for the improvements in i
> Creative Ventures, LLC (Creative) borrowed nearly $3 million from defendant Jim Ward & Associates (JWA) to buy property in California. Creative signed promissory notes, payable to JWA. Thereafter, JWA sold this entire loan to 54 individual investors (Inv
> Maude Rosenbaum wanted to post bail to get out of prison. Harvey Bowen agreed to post bail of $7,500 in return for a $7,500 promissory note signed by Rosenbaum and secured by her house. Bowen was not a licensed bondsman and therefore, under state law, wa
> Stratford Skalkos was a manager at Avon Products. He issued Avon checks to pay his personal debts. So that no one in the company would know what he was doing, he disguised the name of the payees. For example, to pay his American Express bill, he issued a
> Brican LLC was running a scam. The victims were dentists who wanted to lease multimedia systems (called Exhibeos”) for use in their waiting rooms. Each Exhibeo consisted of a computer and a television which could, say, demonstrate proper flossing techniq
> Christina Blasco entered into a “payday loan” with Money Services Center (MSC). MSC loaned Blasco $500 and return Blasco left MSC with a signed check for $587.50 which it promised not to cash for two weeks. (Note that Blasco is laying 17.5% interest for
> A court in Nevada entered an award in favor of Mark and Janet Brandell for $435,066.82 against United Productions, Inc. (UP) and Harry R. Jones. When UP and Jones failed to pay the judgment, the court ordered both of them to appear and answer questions c
> Robert D. Potts was a partner at Deloitte & Touche. He served as the concurring partner for audits of Kahler Corp. Kahler owned the University Park hotel, which it listed in its financial statements as “an asset held for sale” although the hotel did not
> Arthur Andersen audited Enron Corporation’s financial statements. When Enron’s financial and accounting problems began to surface at the beginning of August, a senior accountant at Enron told two Andersen partners that Enron could face severe accounting
> The town of Sanford, Maine, decided to auction off a lot it owned. The town advertised that it would accept bids through the mail, up to a specified date. Arthur and Arline Chevalier mailed in a bid that turned out to be the highest. When the town refuse
> For 19 years, Ernst & Ernst audited a small brokerage firm, First Securities Company of Chicago (First Securities). Leston B. Nay was president of the firm and owned 92 percent of its stock. He convinced some customers to invest funds in “escrow” account
> ABAT was a Delaware corporation operating in China that designed and manufactured lithium batteries for use in consumer products. Because its stock was listed on a U.S. stock exchange, ABAT was required to file financial statements with both the U.S. Sec
> Grant Thornton (GT) audited Winstar, a broadband communications company that provided businesses with wireless internet connectivity. Winstar was one of GT’s largest and most important clients, but only 12 percent of the company’s fees came from auditing
> The First National Bank of Keystone could do nothing right. For five years, it issued risky mortgage loans on which borrowers defaulted. Keystone Management lied about the value of the loans. When the Office of the Comptroller of the Currency (OCC) began
> Steven Leber (Leber) was the trustee of the Steven E. Leber Charitable Remainder Unitrust (“Trust”) which, at its peak, had assets of $4 million. The Defendant, Paul Konigsberg (Konigsberg), was a certified public accountant and the named partner of Koni
> Oregon Steel Mills, Inc. was a publicly-traded company whose financial statements were audited by Coopers & Lybrand, LLP for many years. When Oregon sold the stock in one of its subsidiaries, Coopers advised Oregon—incorrectly and negligently, as it turn
> In 1960, The New York Times ran a full-page advertisement paid for by civil rights activists. The ad described an “unprecedented wave of terror” by the police of Montgomery, Alabama, against civil rights protesters. It stated that the police had assaulte
> It was late night at the Del Lago hotel bar. Bradley Smith and 40 of his closest fraternity brothers had been partying there for hours. Around midnight, guests from a wedding party made a rowdy entrance. One of Smith’s friends brashly hit on a young woma
> Maria Kerkoulas owned the Pub Zone bar, frequented by many motorcycle gangs, and knew from her own experience and conversations with police that some of the gangs, including the Pagans, were dangerous and prone to attack customers for no reason. Kerkoula
> The defendant, attempting to heal the plaintiff, left him blind in one eye. The plaintiff has sued in trespass, a forerunner of today’s tort action. The defendant made a procedural argument, claiming that the plaintiff should have brought an action of co
