Java Bean Corporation imports coffee beans and sells them under 3-year contracts to Mellow Roast, Inc. and a number of other high-end coffee houses in the San Francisco Bay area and a few other cities on the west coast. Java Bean has successfully established itself as a supplier of gourmet coffee beans and has earned a reputation for its products. Java Bean also sells its own brand of coffee grinding and brewing equipment. The coffee bean contracts require that during the two-year contract term that a coffee house not buy coffee beans or coffee-making equipment from any of Java Beans competitors. These contracts do not limit the purchase of tea or other beverage ingredients from other suppliers. In the second year of the contract, Mellow Roast, seeking to alter the contract, protests that this arrangement violates antitrust law in several respects. Explain what would happen in litigation, and why. Assuming that there is something questionable about the contracts, what would you advise either party to do in the future to have a better contract?

Java Bean also sells the same types and grades of coffee beans to Warbucks, Inc., a large chain of coffee houses owned by Little Orphan, LLC, but at lower prices than it sells to Mellow Roast. Warbucks charges customers the same prices as Mellow Roast for various sizes of coffee. With its higher margin of profit, Warbucks is slowly squeezing out Mellow Roast, and is thinking of a price war to hasten the process along. Mellow is thinking of a lawsuit against Java Bean for price discrimination. Discuss whether this would be be a good idea, or not, and wh. What if Java Bean insists that both Mellow Roast and Warbucks sell packages of its ground coffees to consumers for no less that $15.00 per 12 ounce package?

Java Beans main competitors in the Western USA are Peats Coffee and Kona King. To reduce marketing costs, they agree that Java Bean will sell its products only in Oregon and Washington, Peats will sell only in California, and Kona King will sell only in the Rocky Mountain States. Discuss. What if the three firms decide to merge into one new firm and start taking steps towards such a merger?

What if Java Bean, instead of cooperating with Peats and Kona King, starts a fierce competitive campaign, advertising aggressively and selling at prices so low that its actually losing money?