BS Law Project 2.docx - Contract Analysis Midwest Grains...

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Contract Analysis Midwest Grains, Inc., National Bakers, Inc. Contract University of Maryland University College Business Law I Robert Miller Introduction to Contacts In the United States, two primary sources of law govern our contracts: the common law and the Uniform Commercial Code . The Uniform Commercial Code (UCC) article 2 governs contracts between a merchant and the sale of goods. Common law governs contracts for services as well as contracts not otherwise governed by the UCC. The elements of common-law contract formation include offer, acceptance, and consideration. Article 2 of the UCC governs the sale of goods, and includes things that are moveable, but not money or securities. It does not include land or houses. Contracts between merchants are governed by article 2 of the UCC. Within contracts, not all merchants contain the same form of language, and this can lead to discrepancies between terms that would be fatal in common-law contract formation. Fortunately, the 1
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Contract Analysis UCC provides more flexibility in contract formation than exists in common-law contracts, and by being flexible, accommodates the reality of business practices. “Contracts are legally enforceable promises that, if breached, result in compensable damages. Contracts are a fundamental part of doing business, which require not only performance of the terms of the contract but also good faith in dealing. Parties may enter into a contract for any agreement with terms, providing the agreement is legal” (The Saylor, 2014) Also related to the UCC and this contract analysis is the Statute of Frauds . The Statute of Frauds requires and regulates certain types of contracts to be in writing to be enforceable. Specifically, “it requires contracts to be in writing for goods priced at five hundred dollars or more and signed by the purchaser, for those contracts to be enforceable” (The Saylor, 2014). Contract Terms and Agreement Midwest Grains, Inc. (Grains) is a large, privately-owned Iowa-based supplier of various grains to manufacturers and retailers throughout the country. National Bakers, Inc. (Bakers) is a large, family-owned corporation based in New Jersey with operations in 15 states. Beginning in the summer, 2016, there was an oversupply of grain. The over growth of grain was driving grain prices down. Consequently, on September 1, 2016, US Congress enacted a law, called the “ Limited Grain Act .” This law temporarily bans the production and sale of all grains in the US, and provides payment of a subsidy to farmers for not growing grain. On August 30, representatives for Grains and Bakers verbally agreed Grains would sell 1000 lbs. of wheat grain to Bakers for market price. The grain would be 2
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Contract Analysis shipped via truck to the Bakers’ warehouse in New Jersey by September 12, 2016.
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