Important Guidelines
- 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 the evaluation of your substantive content. Using IRAC (Issue, Rule, Analysis, and Conclusion) to structure and develop your answer is crucial. Your analysis and solutions must be based on the principles of law, ethics, and business—not on your opinions.
- 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. Make sure you have identified those key facts and applied them in your IRAC.
- The length of your response doesn’t directly impact your score, but you need to provide a sufficient length of an answer to address the fact pattern completely. Although there is no minimum or limit, however, most responses will be at least two to three substantial pages.
Using IRAC your answer should include the pro and cons outlined in the reading material. You should also discuss the elements of the cause of action, defenses, and your ultimate conclusion based on the fact pattern.
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.
