Business Law Chapter 19

Discount Mart, Inc., is an East Coast-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in,

ALL of the states, in WHOLE or in PART.

Omni Corporation is a Pennsylvania-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in,

ALL of the states, in WHOLE or in PART.

Bild-Rite, Inc., is a Colorado-based firm that does business with clients throughout North America. Bild-Rite oversees construction projects, and buys and sells commercial buildings, undeveloped land, and construction supplies and other goods. Bild-Rite has had to deal with work-site theft and vandalism. With respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for

COMMERCIAL TRANSACTIONS for the sale of and payment for goods.

Stardust Coffee Company is a Texas-based firm that does business throughout the world. Stardust manages retail and wholesale operations, buys and sells commercial venues, undeveloped land, and coffee beans, and other goods. Stardust has had to deal with employee and customer theft. With respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for

COMMERCIAL TRANSACTIONS for the sale of and payment for goods.

Pop Culture Clothiers, Inc., sells t-shirts to Trendwell Stores, Inc., under an existing contract. When textile costs increase, Trendwell agrees to a price increase, but later wants to cancel the con¬tract. Trendwell may

NOT cancel the contract.

Valley Farms offers to sell Whole Harvest Bakeries, Inc., five hundred bushels of wheat. Whole Harvest responds, "We agree to buy five hundred bushels only if the wheat is Grade A quality." This statement is

a COUNTEROFFER.

Rio Engineering Corporation pays PC Technologies, Inc., $1,000 to use a computer for a month. For purposes of the UCC, this is

a lease.

Doctors Medical Clinic orders 1,000 bandages from Emergency Supplies Company but fails to specify the sizes. The bandages are delivered in an assortment of sizes. Doctors Medical Clinic may

accept ONLY the bandages that it WANTS and reject the rest.

Rikki and Sid enter into a sales contract for tennis equipment. With respect to the specific contractual provisions set out in the UCC, Rikki and Sid may

agree to WHATEVER TERMS THEY WISH.

Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which sells a pair of the skis to Tyra, a consumer, who later sells them to Uli, another consumer. Article 2 of the UCC applies to the sales transactions between

all of the buyers and sellers.

Over the course of a year, Mom's Appliance Company sells its wares to customers to whom it extends credit. Mom's orders the appliances from NET Appliance Depot's warehouse, from which the items are shipped via common carrier to Mom's customers. Article 2 of the UCC governs

all of the parties' sales of the goods.

Pressing Music, Inc., offers to buy from Digital Media Corporation (DMC) one million blank CDs of a certain quality. Without notifying Pressing, DMC timely ships CDs of a different quality. With respect to the offer and a possible contract, this shipment is

an acceptance and a BREACH.

Crafted Countertops, Inc., and Kitchen Design Corporation enter into a contract that does not specify the payment terms. Payment may be made in

any commercially normal or acceptable means.

Fact Pattern 19-A1. Olisa enters into a contract to buy a stove from Pay-to-Own Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olisa has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract. Under the UCC, the court can evaluate the contract to determine whether it was unreasonably unfair and one sided

at the TIME it was MADE.

Overseas Corporation (OC), a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy. OC fails to deliver. Under the CISG, Pisa Pizza can

enforce the agreement.

Recreation Supplies, Inc. (RSI), and Sam, the owner of a Tourist Time shop, orally agree to a sale of beach balls and seashells for $1,000. Sam gives RSI a check for $400 as a partial payment. This contract is

enforceable to the extent of $400.

In a dispute over a sale involving a bicycle, Dain argues that as to this deal Emory's Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Emory's is a merchant by assessing whether

it HOLDS ITSELF out by occupation as having knowledge or skill unique to the bike in the transaction.

Charcoal Briquettes, Inc., is the offeror and Dante's Firewood Company is the offeree under a unilateral sales contract in which Ember's Kindling & Tinder Company is also interested. Charcoal is not notified of Dante's performance within a reasonable time. Charcoal

may TREAT THE OFFER as having lapsed.

Radiant Phone Company and Precision Works, Inc. (PWI), enter into a contract for the sale of a certain quantity of cell-phone parts, with PWI to determine the price. The price must be set according to

the concept of good faith.

Fact Pattern 19-B1. Fruits & Vegetables, Inc., and Grover's Market enter into a contract for the delivery of locally grown produce. The parties use a standard Fruits & Vegetables form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be sold. Grover's refuses to pay for the spoiled goods. FRUITS & VEGETABLES responds that it did not waive payment for spoiled produce in the parties' previous transaction. Fruits & Vegetables is arguing that the court should take into account

the course of DEALING.

Fact Pattern 19-B1. Fruits & Vegetables, Inc., and Grover's Market enter into a contract for the delivery of locally grown produce. The parties use a standard Fruits & Vegetables form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be sold. Grover's refuses to pay for the spoiled goods. GROVER'S contends that the practice in the grocery trade with respect to payment for spoiled produce justifies its refusal to pay. Grover's is arguing that the court should take into account

the course of PERFORMANCE.

Tom's Timber Outlet and Olivia, a consumer, enter into a contract for a sale of plywood. If the contract includes a clause that is perceived as grossly unfair to Olivia, its enforcement may be challenged under

the doctrine of unconscionability.

Over the course of a year, Retail Market, Inc., sells goods from its inventory and one of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savers Bank. Article 2 of the UCC governs

the sale of the GOODS.

Sweet Tooth Pastries, Inc., and other bakers refer to a "baker's dozen" as consisting of a collection of thirteen baked goods. This is an example of

usage of trade.

Readymade Construction Corporation offers to buy from Set-Still Cement Company a certain quantity of cement for a certain price. Set-Still can accept the offer by

a PROMISE TO SHIP or a prompt shipment of the cement.

Five Star Flooring orders carpet from Textile Mills Corporation, but Textile does not deliver. Five Star will probably be unable to enforce the agreement if the parties omitted

a QUANTITY term.

Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car. This contract is subject to

Article 2A of the UCC.

Sunny Glass Company and Collision Repair Center enter into a contract under which Sunny agrees to deliver a certain quantity of auto glass to Collision Repair each month. The contract does not include a price term. In a suit between the parties over the price, a court will

DETERMINE A REASONABLE price.

Fresh Harvest, Inc., agrees to sell to Gina's Bed & Breakfast Inn a certain amount of locally grown produce each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at

Fresh Harvest's place of business.

Fact Pattern 19-B1. Fruits & Vegetables, Inc., and Grover's Market enter into a contract for the delivery of locally grown produce. The parties use a standard Fruits & Vegetables form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be sold. Grover's refuses to pay for the spoiled goods. Fruits & Vegetables files a suit against Grover's, claiming that the buyer assumed the risk of the spoilage of the unsold produce. The court may allow evidence of this term if it finds that the parties' contract is

NOT fully integrated.

Equipment Rental Corporation and Family Farm, Inc., are parties to an oral agreement for a lease of farm equipment with payments in excess of $10,000. They may satisfy the Statute of Frauds by

SETTING OUT the terms in a memo.

Cotton Brokers, Inc., enters into a contract to sell denim clothing to Delite Natural Fashion store, which in turn sells a pair of jeans to Esmé, a consumer. In comparison to standards that apply to consumers, the UCC imposes on merchants

SPECIAL BUSINESS standards.

Trina pays Urban Edge Electronics store $1,500 for a laptop computer. Under the UCC, this is

a sale.

Cleo sells kitchen appliances to persons who come into her store, Buy n' Sell Appliances. One afternoon, Cleo sells a used display shelf to Earline. At a garage sale at her home, Cleo sells a used sofa to Flavia. Under the UCC, Cleo is a merchant of

kitchen appliances ONLY.

Resource Remarketers, Inc., offers to buy crude oil from Petro Producers, Inc. The parties later dispute the deal in court. Petro's claim that Resource ordered 10,000 gallons and Resource's testimony that it ordered only 1,000 gallons

supports an enforceable contract for 1,000 (ONE THOUSAND) gallons.

GR*Tech Company agrees to sell computer equipment to Home Office Stores, Inc., to market to its customers. Normally, their contract would not be enforceable unless it includes

the QUANTITY of the goods.

Rodeo, S.A., which is based in Spain, enters into a contract for the sale of seven hydraulic lifts to Tonnage Shipping Company, which is based in the United States. This contract is governed by

the United Nations Convention on Contracts for the International Sale of Goods.

Fact Pattern 19-A1. Olisa enters into a contract to buy a stove from Pay-to-Own Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olisa has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract. Olisa files a suit against Pay-to-Own, claiming that their contract is so unfair and one sided that it would be unreasonable to enforce it. Olisa is asserting

the doctrine of unconscionability.

Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel, including the land, building, furnishings, shares of stock in Suite Dreams Company, and a contract with Trudy to create an ad campaign. Reba suspects that Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs the sale of

the furnishings priced at $500 or more.

Excel Autos & Trucks, Inc., contracts to sell five trucks to First Leasing Corporation, which contracts to lease the trucks to General Delivery Company. Article 2A of the UCC applies to

the lease ONLY.