Download Misrepresentation of Goods and Services: Cases in Commercial Law and more Exams Law in PDF only on Docsity!
Exam number
Final Examination Sales Professor Hallinan
Spring term, 1997
INSTRUCTIONS
(1) Please write your examination number in the space above and on the front of each bluebook that .you use. Do not identify yourself in any other way.
(2) The examination consists of six questions on four numbered pages (exclusive of this cover sheet). You will have three hours to complete it. Each question will be weighted equally with each of the others in grading.
(3) You may have with you and use during the examination your copy of the statutory supplement (Selected commercial Statutes, commercial and Debtor-Creditor Law: Selected Statutes, or the like), which may be annotated in any way that you see fit. You m~y not have with you or refer to any other materials of any kind during the examination.
(4) Your answer to each question may not exceed one side of one bluebook page (two sides if you skip every other line). Any part of an answer that exceeds that limit will not be read.
(5) To the extent that it matters, and indicates otherwise, you should assume that under a bill of lading is a shipment wholly commerce.
unless a question any shipment of goods in intrastate
~(,#;;~ .S,((l>~ RESERVE e::"tA>?<
Ouest ion 1
Over the years, Fred and his next-door neighbor Barney have developed a system for mutual borrowing of lawn mowers, ladders, and so on. Under the system, the two have printed up $500 in Fred'n'Barney Bucks ("FnB Bucks") -- play paper money that they use as paYment for "renting" equipment from each other. The system has a rental paYments schedule, specifying the daily rental amount for various categories of tools and other items that the two might borrow from one another. Wh~never one of th~ two borrows something from the other, the borrower pays for its use in FnB Bucks according the rental schedule. If either party accumulates more than $300 in FnB Bucks, the other party has to buyout the surplus amount with genuine cash, thereby keeping the parties' positions relatively even.
Last summer, pursuant to this system, Fred borrowed Barney's $300 extension ladder, intending to use it in painting his home. without telling Barney, however, Fred then took the ladder to his used furniture store, planning to use it for paint jobs there. When he was done with the painting, Fred stored the ladder at the store, intending to take it back to Barney soon. In fact, Fred soon forgot that he had the ladder and didn't get it back to Barney. Three weeks later a clerk in Fred's store sold the ladder to Wilma, a customer who paid full price for it without any knowledge or reason to know of the ladder's history and provenance.
Barney has sued Wilma seeking return of the ladder. Should he prevail? Why or why not?
Ouestion 2
Framboise, a lawyer, decided to buy a new computer system for his office. After reading up on the subject (but not a whole lot), he visited his local CompAmerica superstore. While there, he examined several different models of computers. He was most impressed, however, by a system that was set up and operational on the showroom "floor. The brochure displayed with the system labelled its as an HV97Z. In fact, the system was an HV97Q.
The difference between the two models had to do with the size of the monitor: the 97Z had a 21-inch monitor, while the 97Q had only a 15-inch monitor. "The difference in price between the two systems would ordinarily be about $1,000. The floor model was a close-out item, however, and the price on its tag was substantially lower than either a 97Z or a 97Q would have been new. In any case, after talking to a salesperson, Framboise said, "I want that one," pointing to the mismarked floor model. The salesperson wrote the order down as "1 computer system, model HV97Z" and he and Framboise both signed it. The salesperson then took Framboise's money and loaded the computer into Framboise's car. Framboise took the computer to his office and set it up.
($10/pound) f.o.b. Acme's plant in Arizona. Transportation costs between Arizona and Dayton at all material times were ten cents per pound. Between June and October, the market price of lead was in a significant decline. By the time the first shipment was due, the market price had fallen to only $5/pound. Acme made the first shipment two days late, on October 3. When the lead arrived in Dayton on October 10, Braziletto rejected it. Market prices were dropping so precipitously that Acme could not find a buyer at a price above $3/pound. Rather than sell the lead at that price, Braziletto ordered it warehoused iriDayton at a cost if ten cents per pound. Braziletto, in the meantime, purchased lead from another supplier in Dayton at the then prevailing rate of$3/pound.
On November 1, Acme timely shipped the second shipment. The market price of lead on that date was $2/pound. The lead arrived in Dayton on November 8. By then the market price had risen to $4/pound. Braziletto refused delivery of this shipment and p~rchased lead elsewhere at $4/pound. Again, Acme warehoused the shipment rather than sell it in a depressed market. By mid- November, however, the market in lead had completely turned around. On November 15, Acme notified Braziletto that it was canceling the contract and would not make the December 1 shipment due to Braziletto's refusal to accept earlier shipments. Braziletto's demands that the shipment be made were unavailing. On December 1, Acme sold to other buyers both the lead originally intended for Braziletto and the two earlier shipments stored in warehouses. These sales were at the then-prevailing market price of $15/pound. On December 10, Braziletto attempted to purchase lead from other suppliers but it could find nothing available at less than $20/pound and so it made no purchase at all.
Acme and Braziletto have sued and countersued each other for breach of contract. To what monetary recovery is each of them recovered? Why?
Question 5
Jensen Medical Supply as buyer and Vivitex Mfg. as seller entered into a contract for the sale of 200 barrels of altium niphrate, a chemical increasingly used in cloning small mammals. Under the contract, the goods will be shipped from Vivitex's plant in Marysville, Ohio to Jensen's warehouse in Dayton, Ohio. Pursuant to the contract, Jensen's bank (First National) issued an irrevocable letter of credit to Vivitex. The letter committed First National to pay a draft drawn against the letter of credit in the amount of the contract price for the altium niphrate, if the draft was accompanied by a negotiable bill of lading showing the shipment of 200 barrels of altium niphrate on or before December 20. On December 21, Vivitex delivered 195 chemical barrels to Lionel Lines, a rail carrier. Vivitex received in
return a negotiable bill of lading describing the goods as " barrels said to contain altium niphrate." As a favor to Vivitex,
a valued Lionel customer, the bill of lading was back-dated one day to December 20. A few of the barrels (5) in fact contain a chemical called blentium citrate, which superficially resembles altium niphrate. The rest of the barrels do contain altium niphrate. The bill of lading and accompanying draft are likely to be presented to First National on December 24. The barrels themselves are unlikely to arrive until mid-January.
Jensen has learned of the foregoing facts and it has demanded that First National refuse to honor any drafts drawn against the letter of credit by Vivitex. First National has refused. Jensen has brought an action against First National seeking to 'restrain payment of the drafts. In addition, Jensen has brought an action for damages against Lionel. Who should prevail? Why?
Ouestion 6
Gates, a lawyer and amateur collector of exotic animals, met Erickson, a doctor and also an amateur collector, at an auction of zoo animals. The two are among the nation's leading amateur collectors. They struck up a conversation, and eventually Gates agreed to sell Erickson his prize breeding pair of Tasmanian devils. Erickson gave Gates a check for the purchase price, and Gates executed a bill of sale. At the time of the transaction, one of the pair was on loan to the Cincinnati Zoo for an exhibit ending two days later. Gates sent a note to the Zoo instructing it to release the animal to Erickson at the end of the exhibit.
The other Tasmanian Devil was in the possession of WorldWide Freight, a trucking company that was returning it to Erickson's farm following an exhibit in Washington, D.C. At the time of the transaction between Gates and Erickson, Gates issued instructions to WorldWide directing that the animal be delivered to Erickson's ranch instead. WorfdWide complied by re-routing the truck to Erickson's ranch. On the morning following the deal, however, and before Erickson could take possession of either of them, both animals died, one at the Cincinnati Zoo, the other in the truck bound for Erickson's ranch. The deaths were from natural causes
and neither the zoo nor the carrier has any liability for them. Upon learning of the deaths, Erickson immediately stopped payment on his check for the purchase price.
Gates has sued Erickson for the purchase price of the recently deceased Tasmanian devils. Who should prevail? Why?
END OF EXAMINATION
