« on: November 24, 2008, 02:44:08 PM »
My contracts professor released this sample exam. Please post regarding approaches you'd take or issues you'd discuss.
2-Hour Practice Test
As the world's largest manufacturer of military aircraft, Locheads (L), a perennially fabulously profitable corporation, has on its payroll many test pilots who fly L's planes in various experimental stages. To compensate them for their scarce skills and the extremely hazardous nature of their work - a considerable proportion of pilots are maimed or killed every year - the company pays the pilots annual salaries generally in the neighborhood of a million dollars.
Romeo Sierra (S), one of L's top pilots, test-flew its experimental X-ZZZ, which was on course to becoming the biggest seller in military aviation history. On a test flight, the cockpit burst into flames. Although S could have saved himself by activating the ejection seat, the plane might have crashed into a heavily populated area. With unimpaired presence of mind, he recalled that L's policy, as incorporated into his contract of employment, required him to use his best efforts to avoid collateral damage that might result in L's having to satisfy costly tort claims. He therefore stayed the course, battling the flames while landing the plane back at L's airbase. Because the fire destroyed the landing wheels, however, he crashed. Blind and paralyzed for life, he will never be able to do physical work again.
While undergoing treatment at a regional burn center, S received a visit from L's president, who assured him that L would provide for S and his family financially. A few days later the president wrote S a letter stating:
"You've been our star pilot for more than 20 years. Because you've shown loyalty far above and beyond the call of duty, we'll never forget what you've done for us. Enclosed is a check for $30,000. You'll be getting a check like this every month so long as we remain profitable."
L kept sending the checks like clockwork for ten years. During this time, S was occasionally wheeled into L headquarters, where, with the president's encouragement, he passed on his lore and grit to other pilots. Sniffing the cash value of his growing lionization in the press, he began writing his autobiography with a ghost writer. Although he intended the book as a piece of enthusiastic advocacy for the military-industrial complex, his agent convinced him that he had in fact been a dupe. In 2008, he published The Right Stiff. Unbeknownst to him, the publisher, in order to hype the book, announced on the back cover that it was founding a peace institute named after S.
When L's president heard about the book, she immediately told S that he was a traitor, whose allegations might very well cause L serious financial injury. Moreover, detectives, whom L had promptly hired to investigate S, reported that several people had reported that S had used marijuana.
If L terminates the payments and S sues for breach of contract, who will prevail? Explain your answer.