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This Case Study is worth 100 points toward your total points.

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Your score will be determined using the Critical Legal Thinking Case Study Rubric. Please read this rubric thoroughly before attempting this assignment.

Your score will be determined by evaluation of your substantive content. Your analysis and solutions must be based on the principles of law, ethics, and business—not on your opinions. You must describe how the application of the principles to the key facts supports your determination of the issues. In other words, you need to show the reasoning behind your decision.

Key facts are those facts that determine if the principles of law are met. You must demonstrate that you recognize the key facts in this case. List the key facts individually. Do not simply repeat or retype the factual scenario.

The length of your response has no bearing on your score. There is no minimum or limit, however, most responses will be between two and three substantial pages.

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Sterling, Inc. is a manufacturer of state-of-the-art computers. For the past ten years, Sterling has acquired all of its microchips from NoBugs Corporation, the only producer of chips meeting Sterling’s high specifications. The relationship has been mutually profitable. Sterling could not have built its reputation as an industry leader without NoBugs’s reliable and consistently high-quality products; Sterling’s business has enabled NoBugs to grow rapidly while providing its investors with an attractive rate of return.

Some months ago, several of Sterling’s computers exploded shortly after installation. Upon investigation, Sterling discovered that tiny imperfections in NoBugs’s microchips had aggravated a dormant design defect in the computers, causing the explosions. Analysis of the chips indicated that they were indeed below specifications and that the imperfections were caused by a slight miscalibration of NoBugs’s encoding equipment. NoBugs recalibrated the equipment and promptly resumed production of perfect chips.

Sterling’s losses from the explosions—lost profits, out-of-pocket costs associated with compensating customers for the explosions, and injury to business reputation—are estimated to exceed $20 million. Sterling and NoBugs disagree on the amount of the loss for which NoBugs should be responsible. Sterling has a strong legal case for breach of contract against NoBugs.

Sterling’s CEO is considering a lawsuit. She asks you to prepare a report discussing litigation strategy and the advantages and disadvantages of litigation, and discussing pretrial planning should the company opt for litigation.

ANSWER

Critical Legal Thinking Case Study 1

The report would first highlight the reason for litigation, where the company failed to adhere to the terms and conditions of the service agreement, leading to massive losses to Sterling Inc. The supplier failed to observe the provision made them bring of the reputation loss for the firm. Hence, the goal of the litigation will be to ensure that NoBugs pays for the damage for going against the contract, which led to massive losses as a result of faulty supplies.

The litigation will need to leave a huge mark against the supplier to ensure that this never occurs again. The litigation will also seek to ensure that the public and the consumer of the Sterling company understand that the firm’s fault was not entirely theirs but as a result of the suppliers who had faulty supplies (Allison, 2018). It will seek groundbreaking results where the supplier will have to pay for the damages and guarantee future safety management to ensure that such damages do not occur again.

Some advantages of litigation include the fact that the parties could be compiled to comply with the judgments or run the risks of getting certain penalties. A losing party has the right to appeal, which is a key advantage to either of the two parties involved. Another advantage of the litigation is that further information regarding the faulty supplies could be revealed through the court process (Arora, 2019). Nevertheless, some of the disadvantages of such litigation include a longer time frame, where the case could take up to several years before a court judgment. It may also be costly to the firm due to the high legal fees and other costs associated with the trial (Arora, 2019). Finally, the court case could damage the relationship between the two firms, making it harder to work together again. Sterling’s company, in its litigation, will hence need to consider the potential of the supplier, evaluate the contract signed between the two companies and how the supplier is likely to lead in the case.

References

Allison, J. (2018). Developing a litigation strategy for your case. Retrieved from https://www.nationaljurist.com/smartlawyer/developing-litigation-strategy-your-case

Arora, R. (2019). THE PROS AND CONS OF LITIGATION. Retrieved from https://pacificadvisors.ca/the-pros-and-cons-of-litigation/