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Suppose that Smile Dentist, Inc. is buying 150 new dental chairs from Sit Back, Corp. Because the parties are long-term business partners, a contract that both parties signed included a provision that any breach of the agreement will result in damages of $1 being paid to the non-breaching party. Five years after the agreement is signed and the chairs delivered, a dispute arises when 30 percent of the chairs begin to malfunction during prolonged use. Smile Dentist sues Sit Back for its lost profits as a result of having nearly one third of its chairs out of commission. [Assume that the parties agreed to extend the statute of limitations to six years.]
1. Suppose that instead of happening five years after the initial sale, the breach happened just one year later. Would Smile Dentist be able to recover its lost profits, and if so under what doctrine? [Assume that no substitute chairs were available for a comparable price, and that the defective chairs injured no patients.]
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