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Rodeo & Blue Inc (RBI) has been a remarkable success story over the past four years. Starting from a small basement operation, it has quickly

Rodeo & Blue Inc (RBI) has been a remarkable success story over the past four years. Starting from a small basement operation, it has quickly grown to a worldwide leader in the music industry. It is now valued at $500 000 000 and shows little sign of slowing down. Not surprisingly, shares in the company are very much in demand. Aside from their intrinsic value, those shares entitle their shareholders to enormous dividends (profits) on an annual basis. Furthermore, unlike many successful companies, RBI's shares are not available to the general public. The company continues to be private, rather than public, and the list of shareholders is jealously guarded. Four years ago, when the company was still small, it contractually sold an option, for the purchase of 20 000 shares, to Greg Cuddy. The company, however, has refused to honour that agreement. As a result, Cuddy feels doubly aggrieved. He has been denied the shares, and he has been deprived of $2 000 000 that he would have received as dividends if the contract had been performed as promised. Needless to say, he will continue to miss out on dividends as long as he does not hold the shares. At this point, however, it is impossible to determine the eventual value of those losses. Assuming that RBI is liable for breach of contract, what remedies should Cuddy receive?

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