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Susan offers in writing to sell Bob 1,000 staplers that use a new improved plastic staple for $25 each to be delivered on 12/15/10. Bob sends Susan written confirmation of his definite acceptance, but states that he is willing to pay only $20 each and needs delivery by 12/10/10. Susan and Bob have a contract for...
Contract is for Susan's terms: 1000 staplers at $25 each for delivery on 12/15/10.
Marge is told by a jeweler that a particular
diamond priced at $10,000 in which she is interested cannot be obtained
anywhere else for under $15,000. Later that
day, she finds a diamond of comparable quality priced at $8,000 at another jewelry
Not unconscionable, Marge could walk away at any time.
Bakers refer to a “baker’s dozen” as consisting
of a collection of 13 baked goods. This
is an example of…
Usage of trade
Which of the following are fungible goods?
Goods where any one unit is treated as legally and commercially equal to other goods that have the same descriptions. Wheat, oil
The Magnuson-Moss Warranty Act is triggered by…
Consumer good for more than $25
In April, Phil buys from Henry a corn crop that
Henry has not planted but hopes to harvest in the fall. After the corn is planted, Phil obtains
insurance coverage on the crop. The corn
is destroyed in a storm before it is harvested.
Crops are identified when planted and exist. Phil has an insurable interest. Henry also has an insurable interest. Henry bears the risk of loss.
Art Corporation offers to buy from Faber Pencil
Company 100k pencils for a total of $10k.
Faber can accept the offer by…
Can accept by shipping or promising to ship
Ross, a New Jersey manufacturer, sells 50 tons
of fabric to Chill, a buyer in Ohio, F.O.B. New Jersey. The cost of transporting the fabric to Chill…
Shipment contract, Ross pays transport costs.
Novelty Foods, Inc. offers to buy from Insects
Unlimited 1k assorted beetles. Insects
does not tell Novelty that it will ship the beetles, and a month goes by before
it begins packaging the beetles for shipment.
Unlimited had to notify Novelty of their acceptance within a reasonable amount of time. Otherwise Novelty can treat the offer as having lapsed.
Nancy sells fur coats to Patricia pursuant to an
existing contract. Nancy concludes,
however, that due to increasing pelt prices, she cannot continue to supply the
coats at the agreed price. Nancy asks
Patricia to agree to a 10% increase in the price. Patricia agrees but later changes her mind.
Patricia will be liable if cancels contract
Precision Clock Company contracts for a sale of
cuckoo clocks to Hyde Home Furnishings.
Hyde’s right to inspect the clocks may be…
Unless otherwise agreed, absolute right to inspect before making payment. Opportunity to inspection is a condition to the right of the seller to enforce payment
A salesperson at Opal’s Computer Store tells
Ryan that a certain laptop computer outperforms all the other laptops. Ryan buys the laptop, but it does no more than most such computers.
Ryan will win, because express warranties supersede the implied warranty
Lee purchases a bicycle from Kim, who is a used
car dealer. Kim agrees to keep the bike
at his house until Lee picks it up. A
tree falls on Kim’s garage and destroys the bike.
Kim is not liable, loss is Lee's
Arthur rents a snow blower from Equipment
Rentals Unlimited. While the snow blower
is in Arthur’s possession, it is damaged by a stranger.
Mutual benefit, ordinary duty of care. Not liable if can prove not negligent. If damage is through no fault of Arthur than not liable.
Julie rents a horse from a local stable and goes
horseback riding. A worn strap on the
saddle supplied by the stable breaks while Julie is riding, causing her injuries.
Mutual benefit bailment. Stable is liable for Julie's injury.
Fran leaves a pair of recently purchased shoes
at a shoe store so that they might be dyed for a wedding. The shoe store accidentally sells Fran’s
shoes to Jan, who has no knowledge that the shoes belong to someone else.
Fran would win against the store.
The UCC allows a buyer who received goods that
are nonconforming even in some small way – when the time for performance has passed – to reject the goods…
Buyer can reject all or any commercial unit of the goods. Seller can cure if they have reasonable grounds to believe nonconfroming goods will be accepted.
Penrod, a buyer for a vineyard, visits a lumber
yard in which cork is cut and is shown samples of various grades of cork by Monique, a salesperson. Penrod agrees to buy 10k square feet of cork based on Monique’s statement that the shipment will precisely match the selected sample.
Express warranty created.
Wayne orders 5 gallons of plain peanut butter
from Discount Suppliers for his restaurant.
Discount ships 5 gallons of crunchy peanut butter by mistake. Wayne decides to keep the crunchy peanut
butter in spite of it nonconformity with the contract. The destruction of the peanut butter in a
kitchen grease fire at Wayne’s restaurant the same day will…
Risk of loss transferred to Wayne. Can't revoke acceptance because goods were destroyed.
Stevens contracts for a sale of restaurant
supplies to the Hotchpot Café. To comply
with its contractual responsibilities under the shipment contract…
Seller has to get the goods into the carrier's hands, has to make a reasonable contract for shipment, and has to notify the buyer that the goods have shipped (maybe).
Jenny’s Home Furnishings Store purchases
furniture from Blue Mountain Furniture Company.
The parties agree that the furniture will be shipped F.O.B. Blue
Mountain’s warehouse. The furniture is
destroyed after being put aboard a carrier.
Risk of loss with the buyer, Jenny. Jenny suffers the loss.
Cecil, a gardening tool merchant, sells a
lawnmower to Candace. Under most
circumstances, Cecil will be presumed to have warranted that...
Merchantability. Goods are fit for ordinary purpose.
Mark and Jason enter into a contract in which
Mark agrees to deliver cement to Jason at a construction site. They neglect to include the price in the agreement. A court will…
Court will determine a reasonable price at time of delivery.
Abby Appliance Store sells kitchen appliances
and also incidental cleaning supplies to persons who come into its store. Under the UCC, Abby is a merchant of…
Dealer for kitchen appliances and a general merchant for cleaning supplies.
A document of title is…
Paper exchanged in the regular course of business that evidences the right to possession of goods. Like an Article 3 negotiable instrument. Promises delivery. Warehouse receipt, bill of lading.
Acme Company offers in writing to sell Tech Corporation
1k computers for a total of $1,000,000 and state that it will keep the offer
open for 7 days. On the fourth day, Tech
sends an acceptance to Acme via next-day mail, but the acceptance is misdelivered
and Acme does not receive it until after the 7-day period expires.
Uses reasonable means under the circumstances. Get mailbox rule so there is a contract as soon as the acceptance is sent.
Ken agrees over the phone to sell James 1k
gallons of oil. Ken honestly believes
that James offered to pay $1 per gallon, but James offered to pay 50 cents per
gallon. James testifies in court that he
offered to pay 50 cents a gallon for 1k gallons.
Can't use statute of frauds as defense, stuck with 50 cents.
Jack, the owner of a computer wholesale outlet,
agrees to sell Jill 10 computers. Before
any interest in specific computers can pass from Jack to Jill, the computers
The computers must be identified. Do so by setting items aside etc.
Roy wishes to sell his car but does not wish to
be held liable for any implied warranties.
To avoid such liability, the sales agreement should note that the car…
If buyer examines or Roy insists that they examine then there is no warranty for obvious defects. Or can have a conspicuous disclaimer if in writing. Or say "as is" or "with all faults."
Metz buys spiked mountain-climbing shoes from
the Hellfire Mountaineering Store, but the spikes come out of the shoes when
Metz is on the side of a mountain, causing him to fall 50 feet onto a ledge and
sustain injuries. Metz may recover from
Hellfire on the ground that…
Implied warranty & implied warranty of merchantability
Molly goes to a gas station and has the oil in
her car changed. The service technician
learns that Molly plans to take a long trip and advises the use of a particular
type of oil to which Molly agrees. The oil
breaks down while Molly is on her trip, causing damage to her car’s
engine. Molly may recover from the gas
Breach of implied warranty for fitness for a particular purpose.
Margaret contracts to deliver 50 tables to the
Furniture Warehouse on May 1. She calls
Furniture on April 15 to notify them that she is going
to cancel the contract
because her workers have gone on strike.
If commercial impracticability, no further perfromance and contract is canceled. Had to notify and Margaret did so.
Alex agrees to sell Tina a certain quantity of unique
glassware that is identified to the contract.
The glass is destroyed, through no fault of either party, before the
risk of loss passes to Tina.
Parties are excused from performance and contract is avoided.
Brad agrees to sell Carl 1k bushels of apples to
be delivered on August 15. On August 10,
Carl receives 950 bushels of apples along with a note in which Brad promises to
deliver the remaining 50 bushels by August 20.
Buyer has a right to cover. May reject both shipments.
Greenway freight transports a load of furniture
for Woodmasters, Inc., from Chicago to Portland. Greenway’s driver encounters an icy patch of
road en route, causing the truck to crash into the side of a mountain. Much of the furniture is damaged.
Greenway is liable, strict liability. Common carrier. Could limit liability.
Ron and Wolf form a contract in which no mention
is made of how the goods are to be delivered.
In general, the UCC will require that the delivery take place…
Seller's place of business or, if none, place of residence.