Prepare answers to the following chapter-end Critical Legal Thinking Cases.
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)
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? 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, 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 12point font, and your response to each question should be between 300 and 1,000 words in length.
