Sales and Leases - A Problem-based Approach, 2016a

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esell them on the open market; subsection (1) was inadequate; and subsection (2) applied. To illustrate the second situation, we again examine Copymate. Based on substantial evidence, the Copymate trial court found that after Modern's repudiation, Copymate had "no active or reasonably available market for the resale of the . . . copiers." One reason was that the copiers had been in storage in Canada for nine years; thus, they seem to have been obsolete. Again, then, Copymate could not resell the copiers on the open market; subsection (1) was inadequate; and subsection (2) provided for an award of "lost profits." To illustrate the third situation, we examine R.E. Davis Chemical Corp. v. Diasonics, 826 F.2d 678 (7th Cir. 1987). In that case, Davis breached his contract to buy medical equipment from Diasonics. Diasonics was in possession of the equipment, which it soon resold on the open market. Diasonics then sued Davis for "lost profits" under subsection (2), arguing that "it was a 'lost volume seller,' and, as such, it lost the profit from one sale when Davis breached its contract." The trial court granted summary judgment to Davis, but the appellate court reversed and remanded for trial. Other courts, the appellate court noted, "have defined a lost volume seller as one that has a predictable and finite number of customers and that has the capacity either to sell to all new buyers or to make the one additional sale represented by the resale after the breach." This definition, the appellate court ruled, lacks an essential element: whether the seller would have sold an additional unit but for the buyer's breach. On remand, then, Diasonics would have to prove (a) that it could have produced and sold the breached unit in addition to its actual volume, and (b) that it would have produced and sold the breached unit in addition to its actual volume. In this case, Kenco did not order the breached goods before Williams repudiated. After Williams repudiated, Kenco was not required to order the breached goods from the factory; it rightfully elected not to do so; and it could not resell the breached goods on the open market. Here, then, "the measure of damages provided in subsection (1) is inadequate to put [Kenco] in as good a position as [Williams'] performance would have done;" subsection (2) states the applicable measure of damages; and Kenco is entitled to its lost profit of $ 11,133…. 15.2.6. Unfinished Goods. Under § 2-704(2), the seller may complete the manufacture of unfinished goods if the seller reasonably believes that will mitigate the damages caused by the buyer’s breach. It is instructive to compare this section with the common law rule exemplified in the case of Rockingham Co. v. Luten Bridge Co., 35 F.2d 301 (4th Cir. 1929). In that case, after the County contracted for the building of a bridge, it breached the contract by telling the contractor it did not want the bridge. The contractor nevertheless completed the bridge and claimed the contract price. The court held that after repudiation, a party may not continue to perform and thereby increase the damages. What is the difference between a contractor being told to stop construction on a bridge and a seller being told to stop construction on a good? 221
Problem 15-14. Buyer asked Seller to build a custom machine for it. The price was $100,000, of which $90,000 is cost and $10,000 is anticipated profit. Seller ordered $50,000 worth of parts and began assembly of the machine. At that point Buyer repudiated the contract. 1. Assuming Seller can sell what it has built for scrap worth $5,000, what can Seller recover as damages? 2. At the time of repudiation, Seller reasonably believes it can complete the machine and find a buyer for it. It does, and sells the completed machine for $90,000. What can Seller recover as damages? 3. Same facts as #2 except Seller can’t find a buyer for the completed machine and has to sell it for scrap worth $10,000. What can Seller recover as damages? Chapter 15. Additional Sources Scott J. Burnham, Glannon Guide to Sales: Learning Sales Through Multiple-Choice Questions and Analysis (Wolters Kluwer 2d ed., 2012), Chapter 16 James J. White and Robert S. Summers, Uniform Commercial Code (West 6th ed., 2010), Chapter 7 222
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SALES AND LEASES: A Problem-based A
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About CALI eLangdell Press The Cent
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Table of Contents About the Authors
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5.1. Statute of Frauds - the Genera
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8.3.4. Remote Sellers under UCC §
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12.3. Qualifications to the Perfect
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16.4. Buyer’s Remedy of “Cover.
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Chapter 1. Introduction to the Unif
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asserted in the Code itself (see [
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(4) The requirement in § 2-511 tha
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unfair that a court refuses enforce
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(1) What factors should the consume
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Problem 1-8. Number from 1 through
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Was the court correct to distinguis
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Chapter 2. Introduction to UCC Arti
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the sale of goods, such as the stat
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714 (Mich. App. 1981) (court held t
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Advent filed a complaint in the dis
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That a computer program may be copy
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and available in the marketplace.
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having knowledge or skill peculiar
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2.4.5.2. Section 2-207(2) regarding
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Chapter 3. Formation of a Contract
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3.2.4.2. Quantity. Section § 2-204
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common law). The provision probably
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3.3.5.3. Section 2-206(1)(b) provid
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Commercial Code. Whether there are
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Case Notes: 1. Although UCC § 2-20
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a website and a little box pops up
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4.2.1. Section 2-207(1) requires a
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4.3. Second Step: Look for Language
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(2) the additional term materially
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522 U.S. 808 (1997) (arbitration pr
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eached orally . . . and is followed
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Terms. Accord Brown Machine, 770 S.
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Section 2-207(2) is silent on the t
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the approach. On the contrary, at l
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offered terms. And if there is nego
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Problem 5-1. Would the following co
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noted a 10 per cent discount on the
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All that is required is that the wr
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We do not mean to [imply] that term
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Problem 5-3. On July 10, 2014, Jack
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A more difficult question is whethe
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Chapter 6. Warranties Implied by La
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6.3.1 If a buyer provides specifica
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particular model of toaster would b
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etween the chowder and crackers whi
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unwholesomeness of the food itself,
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extent beyond that which would be c
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One of the purchasers asks for Joan
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Chapter 7. Express Warranties and W
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5. A picture of a watch with a face
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sorghum seed, but it didn’t grow.
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gets home. When the DVR breaks ten
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7.3.1.5.1. In any event, Home Appli
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merchantability is extended to thos
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court's reason for abolishing the p
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(e) in sales of any seed for planti
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the surrounding text of the same si
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does not claim title in himself (su
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(b) the purchase by a celebrity of
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Problem 8-9. Read § 108. What, if
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8.3.3. Alternatives. After receivin
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8.3.3.1. Under Alternative A, famil
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Problem 8-14. Jump High Inc. manufa
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of a consistent additional term to
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BUTZNER, Circuit Judge …. Columbi
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whether the buyer has in fact defau
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Problem 9-3. Betty owns a building
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Id. at 644. defendant for the lira,
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clauses such as this one are strong
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(1) Can the parties agree on a deli
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(2) Does your answer to the precedi
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Chapter 10. Delivery Terms and Titl
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10.1.2.3.2. So where do we go for g
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10.1.4. Common Carrier Contracts. W
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Rheinberg-Kellerei GMBH v. Vineyard
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Ted asks Outdoor Sporting Goods to
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10.2.2. Transferor’s Title. Secti
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levied on the car on behalf of Butl
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Id. at 266. contends its ownership
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Hollis v. Chamberlin, 419 S.W.2d 11
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Chapter 11. Impracticability (Excus
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11.3. Failure of Basic Assumption.
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(4) the promisor seasonably notifie
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[The court also rejected Bobby Murr
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performance has become commercially
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Transatlantic Financing Corp. v. Un
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4. See Lee Russ, Annotation, Imprac
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The facts are that the parties ente
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Watson Labs., Inc. v. Rhone-Poulenc
Page 186 and 187: preclude performance under the cont
Page 188 and 189: 2. RPR's express obligation under P
Page 190 and 191: 12.3.1. Section 2-602 sets out rule
Page 192 and 193: delivery or tender. It is ineffecti
Page 194 and 195: easonable time for rejection, U.C.C
Page 196 and 197: nor refused the offer. No mention w
Page 198 and 199: uyer can reject the entire contract
Page 200 and 201: 12.7.2. Under § 2-602(2)(b), if th
Page 202 and 203: Chapter 13. Acceptance; Revocation
Page 204 and 205: 13.2.4. After acceptance, the burde
Page 206 and 207: 13.3.2.2. Another important factor
Page 208 and 209: attempted repairs sufficient to kee
Page 210 and 211: miles after revocation was found to
Page 212 and 213: Problem 13-4. Whoopie Cereals purch
Page 214 and 215: Problem 14-3. Sally has agreed to p
Page 216 and 217: constitute reasonable grounds which
Page 218 and 219: On May 1, 1969, AMF met with McDona
Page 220 and 221: Case Notes: 1. When did someone fir
Page 222 and 223: 14.6.2. An effective retraction rei
Page 224 and 225: Chapter 15. Common Law Remedy Princ
Page 226 and 227: end that the aggrieved party may be
Page 228 and 229: 15.1.4.4. The terms “general dama
Page 230 and 231: in certain circumstances, the right
Page 232 and 233: Problem 15-11. Dollar Store decides
Page 234 and 235: everse. Kenco buys mobile homes fro
Page 238 and 239: Chapter 16. Buyer Remedies under th
Page 240 and 241: Schroeder v. Barth, Inc. 969 F.2d 4
Page 242 and 243: e.g., Indiana Ins. Co. v. Plummer P
Page 244 and 245: a condition precedent to any recove
Page 246 and 247: the manufacturer under the particul
Page 248 and 249: ottles of wine instead of 12 bottle
Page 250 and 251: "We first turn our attention to the
Page 252 and 253: severe loss. Therefore, the actual
Page 254 and 255: At first blush, the result reached
Page 256 and 257: Chapter 17. Limitation of Remedies
Page 258 and 259: April and October, while almost not
Page 260 and 261: Pa. Super. 470, 473, 168 A.2d 750,
Page 262 and 263: California Civil Code § 1671. Vali
Page 264 and 265: Problem 17-7. An 18-year old high s
Page 266 and 267: In May, 1976, plaintiff LeVon Schle
Page 268 and 269: limitations governing the elected t
Page 270 and 271: 18.4. Suits against Manufacturers a
Page 272 and 273: Spanierman prepared an invoice that
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Page 278 and 279: opinions from other jurisdictions a
Page 280 and 281: and the tailor says, “I’m kind
Page 282 and 283: Section 9-406.” The problem is th
Page 284 and 285: elevant to this appeal. First, each
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its intellectual property and trade
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“[t]o reveal the intent necessary
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University of Michigan. At the same
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20.3. Lease or Security Interest? S
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2. You cannot cancel the lease duri
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lessee acquires ownership, and that
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Note that incidental damages under
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