1. Specific Performance The California and Hawaiian Sugar Company (C&H), a California corporation, is an agricultural cooperative owned by 14 sugar plantations in Hawaii. It transports raw sugar to its refinery in Crockett, California. Sugar is a seasonal crop, with about 70 percent of the harvest occurring between April and October. C&H requires reliable seasonal shipping of the raw sugar from Hawaii to California. Sugar stored on the ground or left unharvested suffers a loss of sucrose and goes to waste.

After C&H was notified by its normal shipper that it would be withdrawing its services at a specified date in the future, C&H commissioned the design of a large hybrid vessel-a tug of a catamaran design consisting of a barge attached to the tug. After substantial negotiation, C&H contracted with Sun Ship, Inc. (Sun Ship), a Pennsylvania corporation, to build the vessel for $25,405,000. The contract gave Sun Ship one and three quarter years to build and deliver the ship to C&H. The contract also contained a liquidated damages clause calling for a payment of $17,000 per day for each day that the vessel was not delivered to C&H after the agreed-upon delivery date. Sun Ship did not complete the vessel until eight and one-half months after the agreed-upon delivery date. Upon delivery, the vessel was commissioned and christened the MokuPahu.

During the season that the boat had not been delivered, C&H was able to find other means of shipping the crop from Hawaii to its California refinery. Evidence established that actual damages suffered by C&H because of the nonavailability of the vessel from Sun Ship were $368,000. When Sun Ship refused to pay the liquidated damages, C&H filed suit to require payment of $4,413,000 in liquidated damages under the contract. Can C&H recover the liquidated damages from Sun Ship? California and Hawaiian Sugar Company v. Sun Ship, Inc., 794 F.2d 1433, Web 1986 U.S. App. Lexis 27376 (United States Court of Appeals for the Ninth Circuit)

2. Good or Service Frances Hector entered Cedars-Sinai Medical Center (Cedars-Sinai), Los Angeles, California, for a surgical operation on her heart. During the operation, a pacemaker was installed in Hector. The pacemaker, which was manufactured by American Technology, Inc., was installed at Cedars-Sinai Medical Center by Hector's physician, Dr. Eugene Kompaniez. The pacemaker was defective, causing injury to Hector. Hector sued Cedars-Sinai Medical Center under Article 2 (Sales) of the UCC to recover damages for breach of warranty of the pacemaker. Hector alleged that the surgical operation was primarily a sale of a good and therefore covered by the UCC. Cedars-Sinai Medical Center argued that the surgical operation was primarily a service and therefore the UCC did not apply. Who wins? Hector v. Cedars-Sinai Medical Center, 180 Cal.App.3d 493, 225 Cal.Rptr. 595, Web 1986 Cal. App. Lexis 1523 (Court of Appeal of California) What is the public policy that supports the mixed sale doctrine?

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