Michael Williams is offered a position as the CFO of the Hospital of the University of Pennsylvania ("HUP"), and the parties have a handshake agreement for a three year employment contract at $300,000 per year and certain benefits. The parties want to have a written contract, but they agree that Michael will start working immediately while they work out the details of the contract. Weeks pass without a written contract, and then the CEO of HUP resigns suddenly. A new CEO is hired three months after Michael started working for HUP. She wants her own executive team, so Michael is fired without cause or wrongdoing. A written contract had never been completed and signed by the parties. Michael sues HUP for breach of the oral employment contract with a term of three years, and he seeks his entire salary plus benefits for the remainder of the term.

(1) What is HUP's best legal defense to the claim of a breach of an oral contract?

(2) Assuming that a valid contract existed and that it was breached because Michael was terminated without cause, what are the damages that HUP would owe Michael?

(3) What should HUP argue about Michael's obligation after he was terminated in order to minimize the damages that it may owe?