Opinion ID: 555106
Heading Depth: 2
Heading Rank: 3

Heading: Research Grant

Text: 17 The district court refused to deduct $225,000 from Diasonics' damages, ruling that the conditions precedent to provision of the research grant--payment of the full contract price and approval of a program of development activities--had not been satisfied. Simple reliance upon Davis' failure to comply with the conditions precedent to payment of the research grant, however, effectively skirts the true question at issue here--whether the research grant was what it purported to be or was really a discount masquerading in other garb. If the research was indeed genuine and would have redounded to Diasonics' benefit, then Diasonics is not obliged to dole out $225,000. But if both parties understood the research grant to be a type of rebate, automatically payable upon receipt of the MRI in return for practically worthless information, then Davis should receive a $225,000 credit on the damages it must pay Diasonics. Davis' breach does not entitle Diasonics to gain more than the benefit of its bargain. Upon remand, the district court must thus determine whether the research grant served merely as a disguised discount from the purchase price, or whether it constituted an independent exchange supported by genuine consideration. 4