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Native Alaskan Reclamation & Pest Control, Inc. v. United Bank Alaska

Alaska Supreme Court
685 P.2d 1211 (1984)


Native Alaskan Reclamation & Pest Control, Inc. (Native) (plaintiff) asked United Bank Alaska (United) (defendant) to finance Native’s purchase of 11 airplanes that were in Japan. Native and United entered a loan agreement stating that 6 of the planes would be collateral for the loan. Native planned to alternate bringing each plane to America with getting more financing for the remaining planes. A few months later, however, United changed its mind and refused to honor the loan agreement. Native tried to get other financing but was unsuccessful. Ultimately, Native lost the planes, which were sold as scrap. Native sued United for breach of contract. The trial court found that United had willfully breached the contract. The court identified how much United’s breach had cost Native in terms of: (1) Native’s reliance on United’s promise (reliance damages), (2) what it cost Native to try to save the planes after United breached (mitigation damages), and (3) how much Native would have made if United had followed through, minus the interest Native would have paid on the loan (expectation damages). Nevertheless, the court found that United could not foresee that Native would lose the planes without United’s loan and, therefore, only awarded Native the cost of trying to save the planes after the breach, Native’s mitigation damages.

Rule of Law

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Holding and Reasoning (Burke, C.J.)

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