Diamond Aircraft announced that it would build a single engine light jet aircraft referred to as the "D-JET," noting that it would select a powerplant and other equipment for the plane in the future and identifying a "projected price" of under $1 million. In April 2003, Diamond issued a press release in which it projected that the D-JET's first flight would be scheduled in 2004, with initial deliveries to customers in 2006. In 2004, Barnes signed a "Reservation Agreement" with Diamond. The agreement made it clear that there was no existing aircraft to consider for purchase yet, and there were no specifications of the aircraft provided except for general descriptions such as "premium interior" and "glass cockpit." It listed the "Manufacturer's Suggested" price of $850,000 and provided that Barnes would be required to pay a 10 percent deposit within 30 days of "JAA IFR certification" in order to "keep the order position secured." The parties also agreed to limit their liability to the return or forfeiture of the deposit in the event of breach.
Barnes paid a deposit of $20,000 to reserve a place in line to purchase a D-JET and Diamond assigned her the fifty-second North American delivery position. Later, Diamond reconfigured the D-JET entirely and announced the new configuration and new pricing in 2006. It sent Barnes and other deposit holders a letter explaining that upgrades in the aircraft would cause it to be priced at $1.38 million. It gave deposit holders the choice of maintaining their delivery positions for a D-JET priced at $1.38 million or recovering their deposits and relinquishing their delivery positions.
Barnes filed suit against Diamond, alleging breach of contract and seeking specific performance or money damages. Will she win?

  • CreatedJuly 16, 2014
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