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Case Scenarios: Grocery, Inc.

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by

John W. Tanaiewski, PMP

on 24 October 2013

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Transcript of Case Scenarios: Grocery, Inc.

Case Scenarios: Grocery, Inc.
LAW 421

Grocery, Inc. UCC
Chain based in Any State
Written contracts with individual and international vendors
Purchase vendor products to sell in stores

Does UCC Article two apply?
Do common law contracts apply?
Grocery, Inc. Renovations
Contracted Company A to renovate one of chain stores
Co A unable to complete
Co A subcontracted job to Co B
Co A sued for breach of contract & specific performance
Co A argued its right to delegate and/or discharge contract due to commercial impracticability


Who wins?
Grocery, Inc. (Jeff)
Jeff (a minor) purchased car from Steve (car lot)
Jeff made down payment & signed contract for $200/month
Six months later, Jeff can't pay
Jeff returned car to Steve
Wants to cancel contact
Wants money back





What are possible
outcomes?
Gap Filling Rule
Grocery, Inc. has contract with Cereal, Inc.
12 days before delivery due Grocery, Inc. requested order via fax
Flood results in severe damage to Cereal, Inc. warehouse
Grocery, Inc. wants to reject 10 delivered cases
What right or defenses, if any, does Cereal, Inc. have under contract law?
Harry & Tom Breach of Contract
Tom stated he would sell his trains to Harry after retirement projected in two years
Harry spent two years and most of savings building 2k sq ft room
Tom retired and sold trains to David
William L Johnson
Troy Miller
John Tanaiewski
October 24, 2013
Grocery, Inc. (Jason)
Jason shipped, via independent trucker, truckload of peaches
Truck broke down delaying shipment three days
Peaches spoiled on arrival
Terms of contract were F.O.B.






Who bears the risk?
Supplier, Inc., wholesaler, had contract with Grocery, Inc.
Sued Grocery, Inc for breach of contract - failed to place order
Each order worth at least $550
Grocery, Inc. contends Bill signed standard preprinted contract
No specific time/quantity
Bill had limited authority


Is there a contract?
If so, what are the terms?
Supplier, Inc. (Bill)
UCC Article 2 applies
Common law does not apply as the contracts are for goods
Grocery cannot sue for specific performance
Co A (delegator) responsible for material breach
Liable for performance of Co B (delegatee)
Cannot claim commercially impracticable
Unanticipated event does not directly affected basic assumption of contract
Questions?
References
Melvin, S. P. (2011). The legal environment of business: A managerial approach: Theory to practice. New York, NY: McGraw-Hill/Irwin.

University of Phoenix. (n.d.). Case Scenarios: Grocery, Inc. [Multimedia]. Retrieved from University of Phoenix, LAW421 - Contemporary Business Law course website.

Jeff as a minor (capacity) has right to disaffirm (avoid) contract
Contract does not state types of cereal or how divided up
No right to reject shipment; partial order delivered
Partial delivery protected by Gap-filling ruling of U.C.C. Article 2-204(3)
Contract for sale of goods does not fail for indefiniteness if there is reasonably certain basis for giving appropriate remedy

Cereal, Inc. can seek
impossibility defense
due to flood
Harry said he looked forward to
the day he can buy the trains
Contract is valid consistent with UCC principles

Who Wins?
1
2
3
4
5
6
7
Jeff can return car & get back
down payment/$1200-minus depreciation
If Jeff turned 18, he affirmed contract losing right to disaffirm
UCC Art 2, covers F.O.B. terms
Per section 2-319, para 1(a)
Jason (seller) bears risk
and expense of putting goods in possession of the carrier

Grocery, Inc. has right to reject shipment in a timely manner so Jason can “cover”
the shipment
Standard terms on signed contract
Verbal contract had been made
Full transcript