Reference no: EM131675150

Question: In 1998, the governor of New York, George Pataki, formulated a $185 million plan to update old Amtrak trains. The purpose of such a project was to make the old trains faster than the more current Amtrak trains. Such a reconstruction would allow for a high speed rail system between Albany and New York City. Unfortunately, Amtrak produced only one train, and though millions of dollars were poured into the company to fund the project, auditing showed that the company showed little spending on the trains. Problems stemmed in part from the lack of engineering expertise of the Steel Company that was picked to work on the trains.

Also, the state's Department of Transportation (DOT) was not experienced in overseeing projects of this type, so little oversight was given to Amtrak. Furthermore, unforeseen problems arose such as air conditioning malfunctions and the removal of asbestos from train cabins. After the plan seemed as though it would never be successful and Amtrak was extremely low on money due to normal operations, the company tried to settle with the state to escape the project. However, the state fi led a lawsuit against Amtrak. Amtrak's defense was that both parties made a unilateral mistake because neither party foresaw the problems or extra costs associated with the project that made it unrealistic. How do you think the court decided?