Question 1 Company Aria manufactures engines for newly designed airplanes. Aria recently signed a contract with an aircr

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Question 1 Company Aria Manufactures Engines For Newly Designed Airplanes Aria Recently Signed A Contract With An Aircr 1 (151.96 KiB) Viewed 20 times

Question 1 Company Aria manufactures engines for newly designed airplanes. Aria recently signed a contract with an aircraft manufacturer Bocha and Aria will supply the engines to Bocha and guarantee that the engine will produce 50 Megawatts of power. In addition to supplying the engine, Aria is also responsible to provide technical advice and on-site support during the start-up, testing and commissioning of the engine. In addition, Bocha hired another company Calaris, a separate component manufacturer, to construct other subsystems relating to the engine and install the engine supplied by Aria. Three months later, Calaris installed the engine and is now ready to run tests to ensure the proper operation of the engine with other parts of the aircraft and also produce the specified power. Aria sent one of its experienced professional engineering staff, Sam, to the site to witness the tests and to provide technical advice to Calaris. At the site, Sam discovered that many Calaris workers were carrying out work in an unsafe manner without hardhats, eye protection or safety shoes. In fact, Sam realized that Calaris had not established any safety procedures for their own staff. Furthermore, during the testing by Calaris, Sam noticed that Calaris staff did not conduct the tests in complete compliance with the official testing procedures that were established for the project. According to their testing procedures, the engine achieved the guaranteed power of 50 Megawatts. In reality, however, the engine only produced 48 Megawatts of power. Sam realized that if they did conduct the test properly, the engine's reduced power output will be revealed. Sam was concerned that Aria, under the contract, will need to financially compensate Bocha as a result of the output power deficiency. Sam did not tell anyone about the problems with the testing procedures and nobody noticed the problems anyways. a) Comment on Sam's obligations, if any, regarding the testing procedures and the failure of the engine to perform at the guaranteed power. (8 marks) b) Alternatively, if the situation is such that the engine achieved the guaranteed power of 50 Megawatts, but it can actually produce power at 51 Megawatts if they conducted the test properly, will your answers to questions a) to c) above change? Explain. (8 marks)