Reference no: EM132297700
On January 3, 2017, a machine used to manufacture the Hypercycle 16 broke down because of a defective crank system. Worried about the potential loss in profits from Hypercycle 16 sales, an HHC manager quickly contacted a crank system manufacturer, CrazyCranks Inc., and ordered a new system to be delivered no later than January 8. HHC informed CrazyCranks of the urgent need and that the failure to deliver the system by January 8 would risk a significant loss of profits at approximately $60,000 per week due to HHC's inability to sell the Hypercycle 16. The parties signed and exchanged the contract via pdf attachment to the email. Pursuant to the contract, HHC paid CrazyCranks $2000, which is the fair market value of such a system, and CrazyCranks promised to deliver the system by the January 8 deadline. On January 8, the CrazyCranks president contacted the HHC manager and informed him that CrazyCranks would not be able to deliver the system that day. The president apologized and suggested that HHC contact one of CrazyCranks’ competitors, Acme Cranks, Inc., who usually can deliver crank systems faster, but at a slightly higher price. When the CrazyCranks president offered to rescind the contract and refund payment, HHC's manager responded that HHC wasn't interested in rescission and may decide to sue CrazyCranks for its breach. The statute of limitations for breach-of-contract lawsuits is three years, so filing a lawsuit isn't urgent. Instructions: Respond to the instructions below.
1. Assuming HHC plans to eventually sue CrazyCranks, what should HHC do immediately (or as soon as possible on or after January 8), upon learning CrazyCranks will not be delivering the system? If you identify a contract doctrine in your answer, respond with sufficient detail to demonstrate that you understand the doctrine and how it applies.
2. If HHC were to eventually sue CrazyCranks, identify and explain the specific remedies that HHC may be able to seek at trial. Include in your explanation how HHC's actions identified in Prompt #1 immediately above might be relevant to the remedy sought. Identify the remedies as specifically as possible based on the types of contract remedies discussed in Module 4 and the level of detail available in the hypothetical facts. For example, a response such as "HHC would seek damages at trial" would be far too general. Be specific about the types of remedies and the factual basis.