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Case Study #12
 
Case Type:  
  Contracts; Breach of Contract, Commercial Paper - Promissory Notes.
 
Background:  
 
Plaintiff sold an aircraft (1981 Citation 2) to defendants through defendant's principal owner and president in March 2002. Plaintiff required defendant to assume the existing financing within 45 days of the purchase/sales contract. The amount of the purchase was $1,775,000. The plaintiff gave $225,000 to the defendant as a credit for overhauling one engine and required repayment of the note upon demand if defendant did not assume financing within 45 days of the execution of the contract.

Defendant did not assume financing within 45 days of the contract nor repay the loan as required. The aircraft was ultimately repossessed by the finance company.
Plaintiff claimed that it disclosed all existing conditions to the defendant. It sued the defendant and its principal for breach of contract and breach of the promissory note.

The defendants argued that the plaintiff failed to disclose that an overhaul was required for one of the engines.

 
Injury:  
 
Specials in the amount of $2.6 million were introduced through the former president of the plaintiff company.
 
Verdict:  
 
The jury found that the defendants breached the contract and the promissory note. The plaintiff was awarded damages in the amount of $1,775,000, plus prejudgment interest, attorney fees and costs.