1. Pine Trees, Inc. Student Coaching Notes

2. Recovery of Lost Profits
Is the Lost Profits Limitation Clause Part of the Contract?
May an Established Business Recover Lost Profits Based on Projection of Future Income? 13

3. Is the Lost Profits Limitation Clause Part of the Contract?
Is there an Acceptance?
- Definite
- Timely
- Not Conditional on Offeror’s Assent
Rejection & Counter Offer
Are the Additional/Different
Terms Part of Contract?
Both Parties Merchants
At Least One Party is Not a Merchant
Yes, unless
- Material Alteration
- Offer Limit Acceptance
- Offeror Objects
No, unless Offeror Expressly Consents

4. Material Alteration Surprise or Hardship Standard
Clauses that deny implied warranties
Clauses that require arbitration
Clauses that limit remedies 13

5. Reasonable Certainty Standard
May an Established Business Recover Lost Profits Based on Projection of Future Income?
Reasonable Certainty Standard
Not Speculative in Nature
No Absolute Precision is Required
May Rely on Statistical Models based on Past Financial Data 13

6. Question 2a: Getting the Histogram
Use Excel to Calculate Profits on Spreadsheet File Pine Case.
Divide Profits Range (Highest Minus Lowest) by 6 to Get Bin Size and Round to Nearest 1000’s.
Manually Input 6 Upper Values of Bins into Column of Spreadsheet File Pine Case.
Follow Directions for Constructing Histograms on Using_Excel_for_Stat PowerPoint.

7. Questions 2b & 2c: Descriptive Statistics
Follow Directions for Descriptive Statistics on Using_Excel_for_Stat PowerPoint.
Use a 99% Confidence Level when Using Excel.

8. Question 2 d: Expected Exposure
Expected Exposure = Construction Costs + Total Expected Profits for Six Months
Basis for Compensation

9. Question 4: Hypothesis Test
Test Mr. Washington’s Claim that Offer Underestimated Lost Profits (Profit Increased During Last Six Months).
Follow Directions for Hypothesis Testing on Using_Excel_for_Stat PowerPoint.
Use Two Sample Assuming Equal Variances.