Exam 9: Contracts and the Sales of Goods Law

Bob owns a store that sells ice fishing bait and tackle. He is negotiating for a large shipment of nightcrawlers large worms) for the annual December rush. Jim contacts Larry, Darrell, and Darrell's House of Worms, and the guys tell Bob that they will supply all his nightcrawler needs for $5.00 per hundred. Bob thinks about the price and agrees to get back to Larry, Darrell, and Darrell. Jim thinks $5.00 is a fair price and mails off his purchase order for 10,000 worms. Before Larry, Darrell, and Darrell receive Bob's acceptance, they call him to revoke the offer. It turns out that the price of worms is now $6.50 per hundred, and they want a higher price. Assume that the mailbox rule applies to this scenario. Discuss the rule and apply it to this problem.

Under the UCC, which of the following is NOT one of the elements that must be present for a contract to exist?

On July 1, Mr. Burns makes an oral offer to sell used well piping to a steel mill for recycling into new steel. On July 15, the steel mill mailed Mr. Burns its acceptance. However, on July 17, before the acceptance reaches him, Mr. Burns revokes the offer by faxing his revocation to the mill. The acceptance arrives on July 20. Is there a contract?

Which of the following is NOT an element of a contract?

Dwight goes to Bakersfield Cadillac and tries to work out a deal on a new Caddy. Dwight picks out the model he likes and makes an offer of $25,000. Sensing that he is opposite a man of means, the salesman laughs and suggests a price of $35,000 is more in order. Dwight counters with a price of $30,000. The salesman thinks about the price for a minute, then counters with a price of $32,500. Dwight leaves, upset that he could not get the car for $30,000, the price he was willing to pay. The next day, the salesman calls to tell Dwight that his car is on the way and that the salesman thinks $30,000 is a good price. Dwight thinks he is bound to the deal because the salesman has apparently accepted Dwight's last price. Bewildered, Dwight just hangs up the telephone. Is there a contract at $30,000?

Under the UCC, to satisfy the Statute of Frauds, a writing must meet several requirements. Which of the following is NOT one of the requirements?

Masters Corp. contracted to buy from Harrison Ceramic Co. 3 tons of ceramic rods to be shipped FOB Harrison's factory by S&B Railroad Co. Harrison delivered 2 tons of ceramic rods to the railroad. While in transit, the train derailed and the rods were destroyed. Between Masters and Harrison, who bears the risk of loss, and why?

Which of the following is not a provision of the Uniform Electronic Transaction Act UETA)?

On July 14, Emerson Corp. entered into a written agreement to sell to Thomas Corp. 120 cartons of pencils at $4 per carton total price of $480), delivery within 30 days. The agreement contained no other terms. On July 15, Emerson Corp. and Thomas Corp. orally agreed to modify their July 14 agreement so that the new quantity specified was 150 cartons total price of $600), same price and delivery terms. The modification is unenforceable for lack of consideration.

Common law is state law that is uniform, or "common" among all the states, such as the Uniform Commercial Code or Uniform Trade Secret Act.

Farrar Products Co. is a packer and shipper of produce. Farrar ordered 20,000 produce boxes from Wilson Paper Co. According to the contract, the boxes were each to hold between 20 and 30 pounds of produce for shipping. When the boxes arrived at Farrar's packing plant, Farrar discovered that the boxes were of a lesser quality and were only capable of holding 10 pounds of produce each. Because it had a backlog of produce to ship, Farrar used 8,000 of the boxes immediately, packing twice as many boxes as it ordinarily would for that amount of produce to accommodate the lesser strength of the tendered boxes. Farrar also immediately went out and purchased 16,000 boxes from another supplier, at a cost of $.10 a box more than Farrar had contracted to pay Wilson.

Gecko Corp. sent Watson Co. a purchase order for 100 Watson compasses for $2,500. Watson accepted Gecko's offer by sending back an acknowledgment form. However, Watson added a clause providing for interest on any overdue invoices pertaining to the sale, a practice that is standard within the industry. If Watson and Gecko are both merchants and the parties do not communicate further about the terms, a contract is formed that includes Watson's additional term regarding interest.

On August 14, 1997, Burns Boiler Co. sold a boiler to Clarkson Manufacturing Co. Clarkson paid for the boiler in full, and Burns delivered to Clarkson a bill of sale. The bill of sale stated that Burns was transferring "all of its right, title, and interest" in the boiler to Clarkson. Clarkson had no immediate need for the boiler, so it remained in storage at Burns' Florida factory. On January 18, 1998, Burns delivered the boiler to Clarkson in Michigan. The state of Florida then sued Clarkson, alleging that sales tax had been due to it when title passed to Clarkson, which the state claimed was on August 14. Clarkson responded that title did not actually pass until January 18. Who is correct, and why?

Under the reply doctrine, if both contracting parties are merchants, a written confirmation that indicates a contract has been formed and that is signed by the sender will be enforceable against the recipient unless the recipient objects in writing within how many days?

Which of the following is NOT a buyer's remedy under the UCC?

On April 10, Call-Mart sends Buffy a purchase order for 1000 Buffy BMX bikes at $75 a piece. Call-Mart's purchase order includes terms on the back of the form that the seller warrants that the goods are free of defects and are merchantable. On April 11, Buffy receives the purchase order, sends Call-Mart a confirmation with additional terms on the back of the document that limit any warranties, and specifically disclaims any warranty of merchantability. On April 15, Buffy ships the bikes along with an invoice stating identical terms as the confirmation. Assuming both parties are merchants and that Call-Mart's April 10 communication was an offer, is there an implied warranty of merchantability in the contract?

Which of the following is NOT a type of transaction that generally must meet the common law Statute of Frauds requirements?

Lisa is flipping through the Sunday paper when she sees the following advertisement: "For sale: 5 Sony stereos, Model 10b-5, only $250.00, first come first served." Lisa is the first person at the store that morning but the store refuses to sell the stereos, saying that the advertisement was not an offer, only an invitation for consumers to make the store an offer. The store will not sell the stereos for less than the fair market value of $500.00. Discuss the rules concerning contract formation through advertisements and then apply the rule to the above facts.

In hybrid contracts involving the sale of goods and services, how do courts generally decide whether to apply the UCC?

If the seller does not meet the perfect tender rule, which of the following is NOT a remedy to available to the buyer?