Question

2) Gigagar Inc manufactures computer components. It wants to develop a new line of product, but realizes that it cannot do so without a complicated device known as a "digital phalange finger." It has tried to design that devise itself, but has failed. It therefore sent a letter to Katenben Ltd, another high-tech company, that said: "We have tried to design a digital phalange finger but have failed. We are willing to pay $100 000 for the design of a digital phalange finger. You will have our full co-operation and support." Katenben Ltd responded by saying that it believed that it might be able to design the device. It also indicated that it could not guarantee its results but said that it was still willing to commit itself to the potentially impossible project. Gigagar Inc then wrote back in a letter that said: "We understand your concerns. We do not require any guarantee of success. We also appreciate that, given the complexity of the project, you may decide to drop the matter after some preliminary investigations. Nevertheless, our offer stands–we are willing to pay $100 000 if you successfully design a digital phalange finger." Katenben Ltd spent the next six months communicating with Gigagar Inc and spent more than $75,000 trying to design the device. As it neared successful completion, Katenben Ltd. told Gigagar that it was close to finishing but would need an additional two months to complete its work. Gigagar Inc. said, "Ok", however, thirty days later, Gigagar Inc announced that its own engineers had experienced an unexpected breakthrough and had successfully created a digital phalange finger. Gigagar Inc therefore told Katenben Ltd that its offer of $100 000 was revoked. Three days after Gigagar Inc.'s announcement, Katenben Ltd also successfully produced a working digital phalange finger. It now demands payment of $100 000. Gigagar Inc. refuses. Would Katenben Ltd be successful if it sued Gigagar Inc.? What remedies would Katenben Ltd. have?

Answer 1

Yeah, if Gigagar Inc. sued for breach of contract, katenben Ltd will be successful. Compensatory penalties will also be sustained.

Explanation

When Gigagar gets closer to Katenben and offers $100 000 to give them for the production of a digital phalange digital system, it creates a deal. Once Katenben approves its bid on the basis of the contract terms and consents to design the unit, Gigagar enters into a binding contract. Sadly, by revoking Katenben's $100,000 quote Gigagar infringes the deal. The business breaks the terms of the contract and, if it has successfully established a digital phalanx finger, he will pay the agreed sum to Katenben. Therefore, if Katenben sued Gigagar for breaching a contract by withdrawing its bid, it would be successful.

Instead of an violation of Gigagar, Katenberg can be punished by a significant loss of sum used to design the system for damage. The court could allow Gigagar to indemnify Katenben for its immediate loss as a result of the infringement. As in the event, Katenben carries out its contractual duties and thus is the harmless party without breaching any of the terms of the contract. Therefore, as a non-violating group, Katenben is presumably good and Gigagar will pay for the damages incurred by its infringement.