Business Studies


Week 5 Assignment Instructions

Prepare answers to the following chapter-end Critical Legal Thinking Cases from this week’s reading.
• Case 16.1: Specific Performance on page 278
• Case 18.7: Goods or Service on page 313
Your responses should be well-rounded and analytical, and should not just provide a conclusion or an opinion without explaining the reason for the choice.
For full credit, you need to use the material from the week’s lectures, text, and/or discussions when responding to the questions. It is important that you

incorporate the question into your response (i.e., restate the question in your introduction) and explain the legal principle(s) or concept(s) from the

text that underlies your judgment.
For each question, you should provide at least one reference in APA format (in-text citations and references as described in detail in the Syllabus). Each

answer should be double spaced in 12-point font, and your response to each question should be between 300 and 1,000 words in length.

• Case 16.1: Specific Performance on page 278
• 16.1 Specific Performance The California and Hawaiian Sugar Company (C&H), a California corporation, is an agricultural cooperative owned by 14

sugar plantations in Hawaii. It transports raw sugar to its refinery in Crockett, California. Sugar is a seasonal crop, with about 70 percent of the

harvest occurring between April and October. C&H requires reliable seasonal shipping of the raw sugar from Hawaii to California. Sugar stored on the ground

or left unharvested suffers a loss of sucrose and goes to waste.
• After C&H was notified by its normal shipper that it would be withdrawing its services at a specified date in the future, C&H commissioned the

design of a large hybrid vessel—a tug of a catamaran design consisting of a barge attached to the tug. After substantial negotiation, C&H contracted with

Sun Ship, Inc. (Sun Ship), a Pennsylvania corporation, to build the vessel for $25,405,000. The contract gave Sun Ship one and three quarter years to build

and deliver the ship to C&H. The contract also contained a liquidated damages clause calling for a payment of $17,000 per day for each day that the vessel

was not delivered to C&H after the agreed-upon delivery date. Sun Ship did not complete the vessel until eight and one-half months after the agreed-upon

delivery date. Upon delivery, the vessel was commissioned and christened the Moku Pahu.
• During the season that the boat had not been delivered, C&H was able to find other means of shipping the crop from Hawaii to its California

refinery. Evidence established that actual damages suffered by C&H because of the nonavailability of the vessel from Sun Ship were $368,000. When Sun Ship

refused to pay the liquidated damages, C&H filed suit to require payment of $4,413,000 in liquidated damages under the contract. Can C&H recover the

liquidated damages from Sun Ship? California and Hawaiian Sugar Company v. Sun Ship, Inc., 794 F.2d 1433, Web 1986 U.S. App. Lexis 27376 (United States

Court of Appeals for the Ninth Circuit)

• Case 18.7: Goods or Service on page 313

18.7 Good or Service Frances Hector entered Cedars-Sinai Medical Center (Cedars-Sinai), Los Angeles, California, for a surgical operation on her heart.

During the operation, a pacemaker was installed in Hector. The pacemaker, which was manufactured by American Technology, Inc., was installed at Cedars-

Sinai Medical Center by Hector’s physician, Dr. Eugene Kompaniez. The pacemaker was defective, causing injury to Hector. Hector sued Cedars-Sinai Medical

Center under Article 2 (Sales) of the UCC to recover damages for breach of warranty of the pacemaker. Hector alleged that the surgical operation was

primarily a sale of a good and therefore covered by the UCC. Cedars-Sinai Medical Center argued that the surgical operation was primarily a service and

therefore the UCC did not apply. Who wins? Hector v. Cedars-Sinai Medical Center, 180 Cal.App.3d 493, 225 Cal.Rptr. 595, Web 1986 Cal. App. Lexis 1523

(Court of Appeal of California) What is the public policy that supports the mixed sale doctrine?