Case Study Responses

Arkadelphia Drivers argues that it had no contractual obligation to pick up Financial Advisor
on the day of his reservation. Is this argument likely to succeed? Explain, making sure to
articulate the rationale behind the argument.

Because (1) Financial Advisor did not explicitly cancel the arrangement; nor did (2) did Driver
respond to Financial Advisor’s good-faith communication to express his (Driver’s) inability to
comply with Financial Advisor’s request of an SUV; or (3) explicitly cancel the arrangement
with Financial Advisor; I believe Arkadelphia Drivers is unlikely to succeed in this argument
based on the evidence provided. Driver’s failure to complete substantial performance does not
discharge Arkadelphia Drivers from the contract, given that Financial Advisor made a good-faith
effort at communication the next morning. Arkadelphia Drivers would need to successfully argue
that Financial Advisor’s observation regarding Driver’s vehicle was itself an abrogation,
cancellation, or breach of the contract—I do not believe the evidence presented here is sufficient
to successfully carry said argument.

Arkadelphia Drivers argues in the alternative that, even if it breached the contract and
Financial Advisor’s estimate of his damages is accepted by the court, it is not liable for any lost
profits resulting from Financial Advisor’s missing his morning meetings. What will Arkadelphia
Drivers argue that Financial Advisor should have done? Is this argument likely to succeed?
Explain.

Arkadelphia Drivers will likely argue three central points:

 Financial Advisor’s own delay in communicating with Driver automatically created an
insoluble situation vis-à-vis his (Financial Advisor’s) attendance at the first meeting. He
did not even initiate his concern about missed attendance until circumstances prevented
him from such attendance at a minimum of one meeting. This could constitute a breach of
good faith on Financial Advisor’s part.
 Moreover, Financial Advisor was offered alternative means to his meetings. Provided
that the hotel concierge supervisor would attest to this fact, this would mean that
Financial Advisor took a proactive choice between two alternatives: he could either
accept alternative conveyance to his meetings, or remain in the hotel waiting on Driver.
He chose—and continued to choose—the latter, until missing a second meeting. This,
again, may constitute a breach of faith on the part of Financial Advisor particularly with
respect to damages.
 Regarding damages/lost profits: Arkadelphia Drivers will contend that an exact amount
cannot be applied to Financial Advisor’s losses in this regard. It is unclear as to whether
all of Financial Advisor’s meetings had equal potential for equal profits, nor is it at all
clear that Financial Advisor’s earnings on the missed meetings were in any way
guaranteed or solely contingent upon his merely appearing at said meetings.

I believe this argument is both unlikely and potentially likely to succeed, albeit in two different
halves.
  Driver arguable breached good faith by failing to respond to the good faith
communication of Financial Advisor and confirming that Financial Advisor did indeed
wish to continue with his (Financial Advisor’s) arrangements. Arkadelphia Drivers would
therefore hold culpability for all successive nonperformance of contractual obligations
that, ultimately, led to Financial Advisor’s alleged damages.
 With specific regard to damages, however, Financial Advisor’s culpability in his own
losses is arguably more apparent. Financial Advisor arguably took a proactive choice—
through a communication delay with the driver beyond a point at which he could have
reached the first meeting on time, and his choice to decline alternative transportation—to
miss those meetings. Financial Advisor’s failure to communicate either at a reasonable
period of time prior to or immediately after his missed first meeting furthermore may
have a temporary impossibility by which his absence at the first meeting, with all the
commensurate lost profit therefrom, rendered Driver’s performance in this context of the
contract technically impossible.

Assume that Arkadelphia Drivers’ arguments fail (rightly or wrongly), Arkadelphia Drivers is
found in at least partial breach, and Financial Advisor is asked to demonstrate why his
requested $45,000 in damages is an accurate assessment of his damages. Is Financial Advisor
likely to obtain a judgment of $45,000 arising from the missed meetings, and what will he need
to show in order to obtain these damages? What kind of damages are these? Explain.

Financial Advisor would require at least two items to demonstrate Arkadelphia Drivers’s liability
for $45,000 in damages:
 Sworn testimony, including planned contracts, from his counterparties specifically
indicating the proceeds to be paid directly to Financial Advisor from said contracts.
 Documentation indicating that Financial Advisor’s absence at the meetings was the sole
and complete reason for said losses.

I do not believe Financial Advisor is likely to obtain a judgment of $45,000 in consequential

damages (please see below) arising from his missed meetings. Although Arkadelphia Drivers
was found to have at least partially breached the contract, Financial Advisor himself breached
good-faith expectations vis-à-vis his missed meetings by refusing an offer of alternative
transportation. This breach further leads to the specific culpability of Arkadelphia Drivers in
Financial Advisor’s damages: absent alternatives to Arkadelphia Drivers for Financial Advisor’s
conveyance to his meetings, the company might well be said to hold liability. However, this
temporary impossibility manifestly did not exist, as Financial Advisor was offered and rejected
alternative transportation. This refusal shifts liability back to a choice Financial Advisor made.

With respect to the monetary amount of the damages concerned: Financial Advisor is also
unlikely to successfully prosecute an argument for specifically $45,000 based on estimates
derived from other contractual amounts. Financial Advisor’s case thus far appears to be rooted
in his belief that because his later contracts compensated him in certain amounts, his initial two
contracts—provided that they were successfully negotiated—would compensate him the exact
same amounts. Absent substantiating documentation, however, this is a spurious argument based
entirely on hearsay. Financial Advisor’s assumption at the outset that his estimates for damages
are best based in such unstable evidence may serve as circumstantial evidence against the
veracity of said estimates and, at a minimum, the need for analysis and testimony specifically
addressing the question of damages, if any, emanating from the two missed meetings.

Financial Advisor appears to seek consequential damages, as he contends that all such damages
arose from Arkadelphia Drivers’s breach of its contract with him for transportation. His
argument for these damages, however, is tenuous at best: the monetary value of these damages,
as well as their prima facie existence, were not foreseeable. Financial Advisor and Arkadelphia
Drivers entered into their contract expecting one another to successfully fulfill its provisions.
Moreover, Financial Advisor does not appear, at least based on the evidence provided, to be
capable of producing a guarantee of compensation or a commensurate penalization of such
compensation due to his absence at his two morning meetings. Finally, Financial Advisor’s own
alleged breaches of good faith—particularly in his proactive choice to decline alternative
transport and his delay in following up with Arkadelphia Drivers until he had already missed one
meeting—arguably render him as much or more culpable in his damages as/than Arkadelphia
Drivers.