Yakima Compost Company, inc. entered into a twenty-five year agreement with La P
ID: 390454 • Letter: Y
Question
Yakima Compost Company, inc. entered into a twenty-five year agreement with La Paz County, ari- LO3 zona to receive and process sewage sludge from treatment facilities inside and outside of arizona through a solar drying process on county land. after executing agreement, the county decided it no longer wanted to do business with Yakima and terminated the contract. The termination caused
Yakima to lose millions of dollars in business from other governmental entities that had committed to sending Yakima their sewage for treatment. a jury awarded Yakima $9.2 million in compensa- tory damages for lost profits as a result of the terminated contract. Yakima appealed, arguing that in addition to compensatory damages, the court should have awarded specific performance that would require La Paz County to complete its twenty-five year agreement with Yakima. was specific perfor- mance an appropriate remedy in this case?
Explanation / Answer
It was the appropriate remedy in this case due to following reasons :
a. As Yakima Compost Company, inc. entered into a twenty-five year agreement with La Paz County, La Paz was legally binded to do business with Yakima, terminating the contract was against business ethics.
b. Other than losing millions of dollars in business, termination caused by La Paz County was wrong termination, because they didn't gave any justification either under general principles of contract laws or terms of contract.
c. As per contract law, the contractor will be entitled to recover the cost of the work plus all the overhead incurred, and the lost profits.
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