American Contract Law for a Global Age, 2017a

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This case is simple if the perfect tender rule governs. And the trial court impliedly concluded that the perfect tender rule does govern, because it explicitly found that the “pattern” of sales by KCA to Legacy was not an installment contract. Under the perfect tender rule, two facts are dispositive: (1) There is no question that 6 percent of the sample of some 20,000 parts were nonconforming, and (2) by the time the parties had agreed to test the sample of some 20,000 parts, KCA had the better part of a year to produce 100 percent conforming canopies. That is, KCA never “seasonably” exercised its right to cure, because, by no less than the third order filled by February 2004, Legacy was still receiving defective canopies on a series of orders which started the previous July. [Turning to the argument that this was an installment contract,] KCA argues that there was no substantial impairment of value given the ultimate 94 percent pass rate of the final (20,160 unit) sample. On this point, however, Legacy must prevail given the standard of review under which this court must operate. There was testimony from Legacy’s director of manufacturing that every single solder ball “is an electrical contact that needs to make connection” for the module to work. Missing or sheared solder balls will not make contact, and that would mean the whole module would be “basically not functioning” and would have to be “reworked or repaired.” In short, even one defective canopy would mean a computer than didn’t work. It is a reasonable inference that, had Legacy simply processed all the canopies supplied by KCA, the results would have been commercially unacceptable, particularly given the evidence that the canopies were for a new product, and it would be reasonable for the trial court to conclude that even a six percent failure rate would tarnish the new product’s reputation. It is particularly noteworthy, in that regard, that Legacy discontinued its inspection at 20,000 units because the inspection process itself tied up a production line. That is, the “cost of inspection” was itself significant, because it showed a need for zero tolerance of defective parts as part of the original contract. The trial court could thus reasonably conclude that the six percent failure rate was a substantial impairment of the value of the whole contract. KCA [also] argues that Legacy waited an unreasonable amount of time to reject the “whole” of the goods covered by the contract. There was, however, substantial evidence on which the trial court could conclude otherwise. Specifically, earlier shipments had met a series of problems in addition to the “sheared or smeared” solder balls: sticky glue, undersizing, and problems with the silkscreen identification that interfered with the production line. While it is true that KCA may have cured those defects, the very fact of a series of defects (reminiscent of a car buyer who buys a lemon) meant that the trial court could conclude it was commercially reasonable for Legacy to forebear on rejecting the whole of the inventory until it encountered the defect (the solder-balls) that simply wasn’t going ______________________________________________________________________________ 442 CHAPTER VII: PERFORMANCE AND BREACH
to be cured. The real time frame for rejection, then, was not July 2003 to July 2004, but early May 2004 (when the sample showed a six percent failure rate) to the letter in July 2004—barely more than a month. The judgment is affirmed. Respondent is to recover its costs on appeal. _____________________ Review Question 5. The KCA Electronics case illustrates the value of the perfect tender rule to a buyer in the position of Legacy Electronics who, you should note, would then turn around and be in the position of a UCC seller with its ultimate products. Yet the court reaches the same result under the substantial impairment standard for installment contracts in section 2-612. Given that the buyer prevailed in KCA Electronics under both standards, what situation might you imagine where a seller would be in breach under the perfect tender rule yet not be substantially impaired? _____________________ FANOK v. CARVER BOAT CORP. United States District Court for the Eastern District of New York 576 F. Supp. 2d 404 (E.D.N.Y. 2008) CONAN, U.S.D.J. Jeffrey Fanok brings this action against Carver Yacht Corp. [and] Staten Island Yacht Sales, Inc. (“SIYS”) which arises from his 59-foot Marquis yacht catching fire and sinking off the coast of Sandy Hook, New Jersey. Each of the defendants has moved for summary judgment. On April 22, 2006, plaintiff entered into a purchase agreement with SIYS for a 59-foot Marquis Yacht for the 2005 model year. The purchase price was $1,376,940, inclusive of six percent tax. It appears that plaintiff, at the time of the incident, had paid $1,202,940. Carver inspected the yacht in accordance with its manufacturing and quality control procedures prior to its transfer to SIYS. It passed all inspections. It was then shipped, on October 25, 2004, in parts, to SIYS, where it was assembled. Upon receipt of the yacht, SIYS completed a “Pre-Delivery Service Record,” confirming the proper operating condition and seaworthiness of the yacht. When plaintiff and SIYS signed the purchase agreement, SIYS agreed to install some after-market features (aft cockpit controls, a flybridge grill, and a video camera) and make certain repairs. The ______________________________________________________________________________ UNIT 21: STANDARDS OF CONTRACT PERFORMANCE 443
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Notices This is the first edition o
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About CALI eLangdell Press The Cent
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Unit 19: Conditions ...............
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hired Corleone family thugs 4 or an
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described herein, and agrees to fre
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6. MARY BETH WHITEHEAD, Surrogate,
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Surrogate and WILLIAM STERN, Natura
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10. Consider paragraph 5. Should th
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The two court opinions that follow
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Venue Venue is a concept of place
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Their first child, Ryan, was born o
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Subsequent to entering into the sur
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The sixth and final argument sugges
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It is argued by amicus that the $ 1
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no stated public policy on surrogac
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IN RE BABY M Supreme Court of New J
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adoption; the sole purpose of the c
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The surrogacy contract violates the
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Problems Donald Donor is a single,
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An Introduction to CONTRACT FORMATI
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particular obligation? In Europe, i
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The evidence is undisputed that pla
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After some negotiation a price of $
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The answer of A.H. Zehmer admitted
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no, that is beer and liquor talking
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on the Zehmers as well as on himsel
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offer and of the reward and its sub
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your professor. You will come acros
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car title you’re holding there. I
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In the modern world, the question o
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pair of sunglasses. The drumroll th
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This letter was apparently sent onw
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Because these cases generally invol
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teenager’s schoolmates gape in ad
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Review Question 3. Note how Judge W
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cash in ten days,” it must be dee
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“Before a contract can be complet
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for the purpose of doing the work a
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accidentally being bound to unwante
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Here, we have a counter-offer. The
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parties.” Metropolitan Sports Fac
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court. See Minn. R. Civ. App. P. 10
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Thus, it clearly appears that the d
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with distribution. The parties ulti
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all essential terms. See, e.g., Sit
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Enclosed, we beg to hand you contra
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to call for an acceptance particula
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than identify himself, Dealer says,
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offer.” More often, they nod, sha
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The next attack will be my end, I a
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from all the facts and circumstance
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Notice to the agent, within the sco
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2. Written approval by United State
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contrary in the offer, the acceptan
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HOBBS v. MASSASOIT WHIP CO. Supreme
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stranger may impose a duty upon ano
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contract in this case come into exi
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An Introduction to CONSIDERATION Th
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and you are free to change your min
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Ridge Runner that she lacked the pr
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We conclude that the territory enco
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He further answered, that it was gi
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This action was brought upon an all
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consideration does in fact benefit
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Review Question 5. The promisors in
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The distinction between such a cond
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Vincent refuses. Fritz eventually s
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enefit was money received, the subs
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they stopped work in a body, and de
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supervise this building. Under the
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The day before trial the plaintiffs
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General rules of law established fo
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For the foregoing reasons we are al
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WEBB v. McGOWIN Court of Appeals of
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100 P. 631 (Kan. 1909); Edson v. Po
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McGowin’s adult child, would that
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efuses, saying, “We had a deal.
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Giles had no right to use it. But t
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BLICESTER: That’s crazy. JUDGE: N
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A. She took the piece of paper and
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According to the undisputed proof,
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We recognize that upon different fa
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was discussed with compensation to
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CONRAD v. FIELDS Court of Appeals o
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her job at Qwest and enroll in law
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Seth Wyman’s estranged son Levi i
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An Introduction to ALTERNATIVE REGI
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consistency. Some provisions have p
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TOUSLEY-BIXLER CONSTRUCTION CO. v.
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of goods within this Article whethe
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differently from other contracts? F
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nine units was delivered and paid f
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think they have struck a deal.” Q
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more sense for contract formation t
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COMMERCIAL CODE § 2-206:12 (3D ED.
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face of which appears the notation,
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Problem 10.3 On June 1, the sales d
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except for personal use. If, howeve
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[T]he plain reading of the statute
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not lubricated in any way. Without
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we also note that Best Bolt’s vic
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(c) are fit for the ordinary purpos
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This purchase order represents the
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provision would cause no “surpris
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FLENDER CORPORATION v. TIPPINS INTE
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well that the reservations each par
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The alternate approach, recognized
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(a) Is Ivy League University a “m
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and ratified a treaty called the Un
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(2) The fact that the parties have
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e. Manufacturer in Texas contracts
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an authorized distributor of Defend
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undisputed that each of these alleg
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Treaty Text Note. Read Articles 18,
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*4 (S.D. Ohio Mar. 26, 2009); see a
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perform a substantial part of his o
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shall be settled by binding arbitra
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An Introduction to CONTRACT DEFENSE
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which extended even to being able t
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Dickerson, 72 Ala. 318 (1882). In t
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loss from the transaction, includin
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this definition. Whether other area
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ORTELERE v. TEACHERS’ RETIREMENT
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medicine, this physician “judged
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The avoidance of duties under an ag
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7. What is my total service credit?
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Review Question 5. In McGovern v. C
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will pay the full listed price of $
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endeavoured to be upheld by Perjury
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Y Contracts that cannot be performe
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you think the consideration doctrin
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NICKELS, J., dissenting. I disagree
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contracts. What is the real purpose
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At the ensuing trial, defendant den
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There may be cases in which it woul
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professional. Things were really ge
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GUENTHER v. AMER-TEX CONSTRUCTION C
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(b) Subsection (a) of this section
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Problem 14.3 Van der Rohe USA, Inc.
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sold, the terms of the sale, the na
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the judgment of a vulnerable party.
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The first issue is whether the labe
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some point or on some occasion it w
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As a matter of law, based on the fa
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or, more particularly, in cases suc
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“deprived Loral of its free will.
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As to mistake, the amended complain
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In Weger v. Rocha, 32 P.2d 417 (Cal
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I had brought back the topaz, and h
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May 5, 1886, plaintiff went out to
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arren cow is substantially a differ
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prior to the sale was Buyer aware t
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Against Public Policy. In many situ
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HANKS v. POWDER RIDGE RESTAURANT CO
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interest adversely, and identified
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illogical, in these circumstances,
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_____________________ Review Questi
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construed against the employer). Th
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acquired by virtue of effort and ex
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_____________________ Review Questi
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Mere inadequacy of consideration wi
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District of Columbia Court of Appea
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In determining reasonableness or fa
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Problems Problem 16.1 The Californi
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position to all of his patients (or
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An Introduction to TERMS AND INTERP
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contract itself. Thus written docum
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consideration of the simultaneous a
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the contract on the basis of which
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The subject-matter of the written c
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understandings or agreements.” 3
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little time to compose it . . . . A
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expressed in the writing. KN Energy
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Article 8 UNITED NATIONS CONVENTION
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contracts or that parol evidence re
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percent (50%) protein, as tested on
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get the deal they intended, and the
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Cases and Materials W.W.W. ASSOCIAT
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do so because of some identified am
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The truth is that whatever virtue a
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Absent strong public policy conside
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FRIGALIMENT IMPORTING CO. v. B.N.S.
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persuasive if sustained by the reco
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and there is force in defendant’s
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RANDOM HOUSE, INC. v. ROSETTA BOOKS
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language of the grant was broad, en
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F.3d at 1095, would conclude that t
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When Hurricane Rubin strikes the lo
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the business. The contract was sile
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party argues ambiguity), the loan f
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accordance with the terms of this c
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of the advance payments, or the num
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imbibe alcoholic beverages and stil
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Page 402 and 403: TOWN OF FAIRFIELD v. D’ADDARIO Su
Page 404 and 405: damages. The notice of Kant’s act
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Page 412 and 413: Review Question 2. What was Judge C
Page 414 and 415: exercising discretion under the con
Page 416 and 417: NANAKULI PAVING AND ROCK CO. v. SHE
Page 418 and 419: § 490:1-102(2)(b). The drafters of
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Page 424 and 425: Plaintiff does not contest its stat
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Page 428 and 429: discovery by defendant of the defec
Page 430 and 431: Unfortunately, Plumber’s work doe
Page 432 and 433: An Introduction to PERFORMANCE AND
Page 434 and 435: ___________________________________
Page 436 and 437: doctrine, so that close-enough perf
Page 438 and 439: the number of joists used in all th
Page 440 and 441: JACOB & YOUNGS, INC. v. KENT Court
Page 442 and 443: transgressor must accept the penalt
Page 444 and 445: was for requiring this kind of pipe
Page 446 and 447: The evidence is undisputed that the
Page 448 and 449: eing a new roof. We are not prepare
Page 452 and 453: yacht remained located at SIYS’ f
Page 454 and 455: happens by mere operation of law; s
Page 456 and 457: Problems Problem 21.1 Actor is a ve
Page 458 and 459: processor for the same price as the
Page 460 and 461: venue. Under Paradine v. Jane, this
Page 462 and 463: At trial, the court allowed IH’s
Page 464 and 465: In order for a supervening event to
Page 466 and 467: The court interpreted this passage
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Page 470 and 471: A cancellation order given by her o
Page 472 and 473: e entitled to judgment. They certai
Page 474 and 475: performance is excused when unfores
Page 476 and 477: caused to communications and transp
Page 478 and 479: Following the closing of the above-
Page 480 and 481: performance. 407 East 61st Garage,
Page 482 and 483: Canal, across the Mediterranean thr
Page 484 and 485: An Introduction to REMEDIES We now
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Page 488 and 489: multiplication and (very rarely) di
Page 490 and 491: It was also erroneous and misleadin
Page 492 and 493: and we turn to the question of whet
Page 494 and 495: testified that the total gas, oil,
Page 496 and 497: BRANDEIS MACHINERY & SUPPLY CO., LL
Page 498 and 499: PEEVYHOUSE v. GARLAND COAL & MINING
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explanation as to why a measure of
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work; however, where the contract p
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clear and unambiguous and the parti
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pool contractor to finish the pool
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Nevertheless, the English courts he
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perform the work. As Lee failed to
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UNITED STATES ex rel. COASTAL STEEL
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emanded for those findings. When th
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the substance is that the plaintiff
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the agreement would continue on a m
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Review Question 7. Note the paralle
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product that would be fully functio
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car to the Country Music Museum for
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Restatement (Second) of Contracts s
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Harrahs brings the instant action a
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contest payment for same if constru
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This is in accord with the earlier
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Defendant’s sole defense to this
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particular. Certainly, none of the
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sustained where, from the nature of
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ut will be happy to try to help in
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the full $7,500 price of admission
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Problem 25.2 Mina is a second-year
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other types of specific performance
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imposed as the remedy for breach of
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certainty, then S&M should be compe
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There is simply no requirement in t
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“other proper circumstances” th
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fence plaintiff erected to discoura
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y no means certain, at the time of
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cannot use that method of self-help
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contract price of $533,000) that La
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teacher resigned at the beginning,
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eaching its lease with Perez by the
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An Introduction to CONTRACT NONPART
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fraud, mistake, and illegality. If
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may be the diversity of opinion els
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given him by the will for a particu
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since Lawrence v. Fox in a desire t
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workers’ compensation benefits),
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to divide a lawyer’s loyalty betw
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Review Question 9. Lawyers do many
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Problems Problem 27.1 Hank and Hild
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interested in jumping into such a b
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limitations barred the claims. She
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assigned their claim to recover the
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application to this contract as it
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A breach of contract has been defin
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moved to Arizona and had no further
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It is evident from the express lang
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contracted to assume, and the assig
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March 1 for the conveyance of Purpl
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