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Nobugs Vs Sterling: Litigation and Pretrial Planning

Essay by   •  July 8, 2019  •  Case Study  •  818 Words (4 Pages)  •  749 Views

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Joshua Rowe


The breach of contract is exemplified in this case by NoBugs’ actions when it allowed sub-standard computer chips to be manufactured in Sterling’s computers. The company broke the binding agreement it had with Sterling by not fulfilling the contractual promise, and therefore is a non-performance (1). This is considered a civil wrong, and should grant Sterling to either collect sufficient damages, or compel performance because of the breach (2). If this item was brought before a judge, they would consider the following to determine if it was a material breach: the extent to which the injured party will be deprived of the be nefit which is reasonably expected, the ex tent to which the injured pa rty can be adequately compensated, the extent to which the party failing to perform or to offer to perform will suffer forf eiture, and the likelihood that the party failing to perform will cure this failure, and the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of go od faith and fair dealing (2).

Since NoBugs is the only producer of the microchips for Sterling’s state-of-the-art computers, there would be no room for the liability to fall on any other company other than that which is making the microchips. Although NoBugs has consistently provided microchips to Sterling for 10 years, it was the tiny imperfection that led to aggravating the dormant defects in Sterling’s computers which ultimately made them explode. The chips provided by NoBugs were below the required specifications and were caused by the slight miscalibration of their equipment. The loss is a result of a combination of the dormant defect and the design defects in the computer. The estimated losses from these errors when taking into account the injury to business reputation along with the loss of profits exceeds $20 million dollars, and it is clear that NoBugs is not accepting responsibility for their portion of the damages.

NoBugs could argue that the reason for the explosion was actually the known dormant defect in the computers. Their tiny defects would not have caused the explosion if the design defects of the computers had been repaired by Sterling’s company. Sterling could also be liable for not checking the specifications of the microchips before fitting them into the computers. If the defect had been noticed prior to being fitted to the computers, NoBugs could have been notified of the issue and taken the necessary steps to adjust the calibration on its equipment and the production of the chips would have been rectified. The losses due to the explosion, specifically the loss of profits, out of pocket costs, and injury to their business reputation were the responsibility of Sterling, not NoBugs.

If Sterling were to pursue litigation, the advantages would point in Sterling’s favor with the provided facts and evidence that support our claim. Also, the arguments placed by Sterling, the relevant laws, and the requirement that people have to tell the truth will remove ambiguities form the case. In addition to, if the judge makes a mistake of law, Sterling would have the right of appeal against the judgement (3). There could also be additional facts that are discovered during the litigation that may not have been discovered otherwise. This has a reasonable possibility of finding an objective decision.



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