Jentz 11e-AM-Ch20 - CHAPTER 20 THE FORMATION OF SALES AND...

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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 C ASE 20.1—(P AGE 364) W HAT I F THE F ACTS W ERE D IFFERENT ? Suppose the contract had stated that the truck and other equipment were worth $50,000 and the goodwill value of the business was $100,000. Would that have changed the outcome? Why or why not?  If the parties agreed that the majority of the value in the contract was not in goods,  then   the   contract   would   fall   under   the   common   law,   which   has   tighter   standards   to  determine the existence of the contract than does the UCC. So the outcome is not as clear,  but given that the price was determined and that the Naffzigers took possession, it is  possible there was an enforceable common law contract nonetheless. T HE E THICAL D IMENSION Given that the business was not what the Naffzigers expected it to be, and that they returned everything, was it fair for the Jannuschs to demand full payment? Explain your answer.   Yes.  Otherwise, it would be like saying you should get to live in a house for four months and, if  you decide you do not like it, force the seller to take it back. There was no claim that the  Jannuschs were not cooperative or misled the Naffzigers; the business activity was just not  as profitable as they had hoped it would be. C ASE 20.2—(P AGE 371) T HE E THICAL D IMENSION 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  157
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158           UNIT FOUR:  DOMESTIC AND INTERNATIONAL SALES AND LEASE CONTRACTS party’s presentation of additional terms in the context of the principles cited in the  Sun  case  should only be done in good faith. T HE L EGAL E NVIRONMENT D IMENSION 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 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.
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