Clark_11e-AM-Ch20.doc

Clark_11e-AM-Ch20.doc - C HAPTER 2 0 T HE F ORMATION OF...

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159 C HAPTER 20 T HE F ORMATION OF S ALES AND L EASE C ONTRACTS A NSWERS TO Q UESTIONS AT THE E NDS OF THE C ASES CASE 20.1—WHAT IF THE FACTS WERE DIFFERENT? (PAGE 397) If neither Thompson nor Morris had any experience in the cattle-trading business, would the result in this case have been different? Possibly. The court’s determination in that situation would have been based on different criteria, particularly the conduct of the parties in the transaction (did they hold themselves out as having knowledge or skill peculiar to the goods involved?) and their intent toward the business (did they plan to continue, or was this a unique transaction?). THE GLOBAL DIMENSION Suppose that the transactions in which Thompson acted as an order-buyer had occurred in other countries. Would the court have still ruled that Thompson was a merchant? Why or why not? Yes. The transaction at issue before the court occurred in Kansas, and the law that the court was applying to that transaction was Kansan law. If the facts were the same except for the locations of the transactions, the documentation and other evidence of Thompson’s merchant status might have been slightly different, but the requirements for that status and the findings and conclusions drawn from that evidence would not be different. CASE 20.2—(PAGE 404) THE ETHICAL DIMENSION How does the UCC’s obligation of good faith relate to the application of the principles concerning additional terms? The parties to a contract have an obligation to perform in good faith [UCC 1–203]. Similar to the application of this duty in the context of a contract’s modification, a party’s presentation of additional terms in the context of the principles cited in the Sun case should only be done in good faith. THE LEGAL ENVIRONMENT DIMENSION Applying the correct principles to the facts in this case, how would you have decided the issue? Explain. The court presented a review of the case that found support for a binding contract between Sun and Myron, and grounds to refute that
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160 UNIT FOUR: DOMESTIC AND INTERNATIONAL SALES AND LEASE CONTRACTS finding. For example, Sun contended that a binding contract was formed on its acceptance of Myron's purchase orders and that the different delivery dates “were merely offers to modify or add to the terms,” which, under UCC 2–207(2), might or might not occur. It could be asserted that Myron's intent was to have the calculators available by the Christmas season, not necessarily on the precise dates indicated in the orders. Against this assertion, it could be maintained that strict and timely compliance with the delivery schedule in the orders was material to the contract. Myron argued in part that there was no contract because, as indicated by Sun’s request for revised orders, the parties intended any modification of the terms of the original orders to be in writing and signed by Myron, and there was no such writing. In other words, Myron characterized its original orders as offers, which Sun did not accept “but instead made a
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Clark_11e-AM-Ch20.doc - C HAPTER 2 0 T HE F ORMATION OF...

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