Business Law 12th Edition by Roger LeRoy Miller ,Frank Cross

Exercise 14

Robco, Inc., was a Florida arms dealer. The armed forces of Honduras contracted to purchase weapons from Robco over a six-year period. After the government was replaced and a democracy installed, the Honduran government sought to reduce the size of its military, and its relationship with Robco deteriorated. Honduras refused to honor the contract and purchase the inventory of arms, which Robco could sell only at a much lower price. Robco filed a suit in a federal district court in the United States to recover damages for this breach of contract by the government of Honduras. Using the information presented in the chapter, answer the following questions.
Does the act of state doctrine bar Robco from seeking to enforce the contract? Explain.
DEBATE THIS: The U.S. federal courts are accepting too many lawsuits initiated by foreigners that concern matters not relevant to this country.