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This is a discussion Forum, please read Exercise 24 (Acme Aviation).
For this discussion, please follow these instructions:
1) Post 2 paragraphs response to exercise 24(a) as an expert for the plaintiff (Express Delivery).You are making your statement as the plaintiff’s expert and, of course, the plaintiff is interested in maximizing the award. Support your argument and also describe any additional information you might need from the defense to help support your position.
2) Analyze and post a response to a classmate’s (defendant’s) post to 24(b) by writing 2 paragraphs, defending your position, as necessary.Please discuss his response with agreement and some ideas, that means do not evaluate his response by critics.
Classmate’s post to Exercise 24(b):To calculate Express Deliverie’s (ED) damage estimate for the defendant Acme Aviation (AA), I started with an analysis of ED’s historical financial information and, then, analyzed what may have happened absent the breach of contract. From my analysis, I developed a damage estimate based on an evaluation of ED’s lost revenues, lost profits, extra costs, and lost value. I also used the “Benefit-of-the-Bargain Approach” or expectations remedy (p. 10-6), to estimate damages on behalf of Acme Aviation, which is the approach that is used in most states. This approach requires the inclusion of money invested, plus any additional costs or profits lost. From my estimate, I determined that AA should be responsible for a total of $995,000 in damages.
I determined that the damage period was the 2 years after the canceling of the contract. I. then, used a variety of techniques to estimate the damages numerically. I started by determining that AA should only be responsible for 20 percent of the lost sales of $800,000, for a total of $160,000, and, also, only responsible for 20 percent of the lost value of the company, or of $2.5 million, for a total of $500,000. I analyzed ED’s lost earnings, and determined that AA should only be responsible for the increase in the average losses between the first two years before the contract and the two years after the contract, which totaled $55,000. From ED’s earnings and losses information, I also determined that ED was already on a downward trend and that AA was not largely responsible for their bankruptcy, especially considering that AA was only used for about 20 percent of its delivery services. Lastly, I determined that I could likely prove that the cost increases from the replacement of delivery services could likely be zero-sum damages, because ED could have found a cheaper replacement. But because that information was not available, I determined that AA could award ED for the direct cost increases per year, but not for the corporate overhead allocation, because that was not a foreseeable increase and was not caused by the breach of contact. For cost increases, I included $280,000 in the damage estimate. Additional information I would like to seek to compute a more accurate damage estimate would include macroeconomic information, industry information, more company specific information, and more information to conduct a financial analysis on ED (p. 10-8).
Kindly note the case no is Express Delivery Vs. Acme Aviation
International House, 12 Constance Street, London, United Kingdom, E16 2DQ
UK Registered Company # 11483120
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