Sierra Nevada Trees, Inc. Student Coaching Notes

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Sierra Nevada Trees, Inc.Student Coaching Notes
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Recovery of Lost Profits

• Is the Lost Profits Limitation Clause Part of the
  Contract?
• May an Established Business Recover Lost Profits
  Based on Projection of Future Income?

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Is the Lost Profits Limitation Clause Part of the
Contract?
Is there an Acceptance? - Definite - Timely -
Not Conditional on Offerors Assent
Rejection Counter Offer
Are the Additional/Different Terms Part of
Contract?
Both Parties Merchants
At Least One Party is Not a Merchant
Yes, unless - Material Alteration - Offer Limit
Acceptance - Offeror Objects
No, unless Offeror Expressly Consents
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Material Alteration

• Surprise or Hardship Standard
• Clauses that deny implied warranties
• Clauses that require arbitration
• Clauses that limit remedies

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May an Established Business Recover Lost Profits
Based on Projection of Future Income?

• Reasonable Certainty Standard
• Not Speculative in Nature
• No Absolute Precision is Required
• May Rely on Statistical Models based on Past
  Financial Data

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Question 2aGetting the Histogram

• Use Excel to Calculate Profits on Spreadsheet
  File Sierra Case.
• Divide Profits Range (Highest Minus Lowest) by 6
  to Get Bin Size and Round to Nearest 1000s.
• Manually Input 6 Upper Values of Bins into Column
  of Spreadsheet File Sierra Case.
• Follow Directions for Constructing Histograms on
  Using_Excel_for_Stat PowerPoint.

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Questions 2b 2cDescriptive Statistics

• Follow Directions for Descriptive Statistics on
  Using_Excel_for_Stat PowerPoint.
• Use a 99 Confidence Level when Using Excel.

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Question 2 dExpected Exposure

• Expected Exposure Construction Costs Total
  Expected Profits for Six Months
• Basis for Compensation

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Question 4Hypothesis Test

• Test Mr. Washingtons Claim that Offer
  Underestimated Lost Profits (Profit Increased
  During Last Six Months).
• Follow Directions for Hypothesis Testing on
  Using_Excel_for_Stat PowerPoint.
• Use Two Sample Assuming Equal Variances.

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