Breach Of Contract Lawsuit By Hospital On Surgical Instruments Company

Question

The Hospital Administrator of Mega Hospital is negotiating with Acme Surgical Instruments to fill Mega Hospital’s requirements for surgical instruments. The Hospital Administrator of Mega Hospital sends Acme Surgical Instruments a purchase order form for surgical instruments that describes the quantity and type of each surgical instrument that Mega Hospital wants to purchase and other terms and conditions. The Mega Hospital form does not fix a price for each surgical instrument but it states that Acme Surgical Instruments should offer a price that will be fixed for two years. Acme Surgical Instruments sends its own purchase order form with Acme Surgical Instruments’ terms and conditions back to the Hospital Administrator, signed by Acme Surgical Instruments, with Acme Surgical Instruments’ prices but without specific reference to the two-year term. Under the Acme Surgical Instruments prices, payments by Mega Hospital would be about $10,000 per year. The Hospital Administrator signs Acme Surgical Instruments’ purchase order form and sends it back to Acme Surgical Instruments, indicating Mega Hospital’s agreement to the price terms. After six months, Acme Surgical Instruments decides that it is not making enough money from the arrangement, and Acme Surgical Instruments stops making shipments. Mega Hospital sues for breach of contract.

a)    What body or bodies of law govern this dispute and why? What body or bodies of law do not govern this dispute and why? Please be specific.
b)    Does the signed Acme Surgical Instruments purchase order form constitute an enforceable contract? Analyze referring to the essential elements of a contract.
c)    Does the signed Acme Surgical Instruments purchase order form contain all of the terms and conditions of the contract? If not, what additional information do you need to answer this question? Does this cause you to reconsider your answer to b?
d)    Would your answer be different if the total payments were $150 per year? Why or why not? Explain the significance of contracts requiring payment of less than $500.

Summary

The question belongs to Law and it discusses about a scenario where a hospital sues a surgical company for breach of contract for shipping surgical instruments and not failed or improper price negotiations.

Total Word Count 430

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