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Pacific Guano Ltd wanted to mine phosphate on Ocean Island in the South Pacific. The small population of that island formed the Ocean Island Residents
Pacific Guano Ltd wanted to mine phosphate on Ocean Island in the South Pacific. The small population of that island formed the Ocean Island Residents Co (OIRC) and entered into an agreement with Pacific Guano. Under the terms of that contract, Pacific Guano received the right to extract unlimited quantities of phosphate from the island for 20 years in exchange for its promises to pay $20,000,000 and to undertake an extensive reforesta- tion project at the end of the 20-year term. Shortly after signing the contract, the members of the OIRC, which consisted of all the residents of Ocean Island, permanently resettled to another nearby island. Pacific Guano carried out its mining operations and paid $20 000 000. However, at the end of the lease, it refused to replant the property and left the island resembling a lunar landscape. The reforestation project that the contract required would have cost about $3 000 000, but it would have improved the value of the land by only $600,000. Is the OIRC entitled to recover $3 000 000 as cost of cure damages? Leaving aside the legal rules, do you think that the OIRC should be able to recover $3 000 000 as cost of cure dam- ages? If, at the time of forming the contract, the OIRC had known that Pacific Guano would not reforest the land In irac format with full explanation and remedies
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