Your mission for this week is to answer both of the following questions (one of which is from your text):
a) “Nina owns a used car lot. She signs and sends a fax to Seth, a used car wholesaler who has a huge lot of cars in the same city. The fax says, ‘Confirming our agreement, I pick any 15 cars from your lot, 30% below blue book value.’ Seth reads the fax, laughs, and throws it away. Two weeks later, Nina arrives and demands to purchase 15 of Seth’s cars.” Is Seth obligated to sell? Why or why not? What particular rules will come into play? Are there any defenses?
b) “Roger buys raw red bell peppers (“Rogers Raging Peppers, Inc.”), processes them and sells them to retailers like Wal-Mart and Target. Roger had existing contracts with Oregon retailers to provide 1,000,000 pounds of processed peppers. Fred the Farmer agreed to sell Roger 1,000,000 pounds of unprocessed peppers at $.30 per pound, with delivery from September through November 2010.
Fred and Roger signed a written contract outlining the above.
To fulfill his contract with Roger, Fred purchased pepper seeds through the seed store, “Peppers Plus.” He spoke with a Peppers Plus employee and explained that he needed to grow 1,000,000 pounds of peppers for an Oregon pepper processor.
Ultimately, Fred purchased the “Sweet Pepper Patty” variety because, in the words of the Peppers Plus employee who assisted him, “it is the sweetest pepper you have ever eaten–hands down.” One week after Fred planted the seeds, Peppers Plus sent an invoice that contained a disclaimer of “all warranties, including any implied warranties.” The disclaimer was in small writing in the far lower left-hand corner of the invoice.
Fred began timely delivery of the peppers. In October, Roger asked Fred to stop delivering peppers because of a scheduling problem on the processing line. Roger explained that such delays were “standard in the industry.: Fred, a farmer for 25 years, had never heard of this standard. Roger told Fred he did not know how long the delay would last and he should do whatever he needed to get rid of his peppers. Fred did not pick any peppers during the delay and the undelivered peppers remained in storage bins and began to rot (gross).
Ten days later, Roger told Fred that he could start delivering peppers again.
Roger asked Fred if he was going to be able to fulfill the contract, and Fred said “yes.” At the end of November, Fred had only delivered 700,000 pounds of peppers to Roger. The retailers that received the 700,000 pounds of peppers returned them to Roger because they smelled and were sour.
To meet his contractual obligations to these retailers, Roger purchased replacement peppers on the open market at a price much higher than $.30 per pound.”
Applying the Uniform Commercial Code, discuss and analyze any issues you see (and maybe sketch some things out before writing/typing).