key issues covered include 1) contract formation under the common law and the UCC; 2) when, if ever, does acceptance occur when the products delivered are damaged and there is an issue over payment; 3) what are the differences between agency and the various ways in which an agency relationship comes about versus an independent contractor; 4) must all contracts be in writing; 5) what are ethical conflicts to a company selling a product that potentially harms it users.
- Robot Products, Inc., offers to sell to Unlimited Sales Company one hundred iRobot vacuum cleaners at $200 a piece, subject to certain specific delivery dates. Unlimited Sales Company replies with a signed purchase order that reads, “Accept your offer for 100 iRobot vacuum cleaners at $200 each. Must be delivered to our warehouse.”
Robot Products does not respond or deliver the goods. Unlimited files a suit for breach of contract, to which Robot Products answers that there is no contract because Unlimited’s purchase order contained additional terms and is not signed by Robot Products, Inc.
Can Unlimited recover? Explain under Article-2, Sale of Goods, Uniform Commercial Code (UCC) and the common law of contracts.
- Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery. Signal tenders delivery in its own truck. Tuner’s manager notices that some of the cartons have scrape marks. Tuner’s owner phones Signal’s office and asks whether the sets might have been damaged as they were being loaded. Signal assures Tuner that the sets are in perfect condition. Tuner tenders Signal a check, which Signal refuses, claiming that the first delivery to new customers is always for cash. Tuner promises to pay the cash within two days. Signal leaves the sets with Tuner, which stores them in its warehouse pending its “Grand Opening Sale” on November 15. Two days later, Tuner’s stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair. Signal claims Tuner has accepted the sets and is in breach by not paying on delivery. Will Signal succeed on these claims? Explain.
- Roman is the chief executive officer of Salty Snax Corporation. Roman’s responsibilities include decisions on product development, marketing, and other significant business directions. Roman is subject to the approval and oversight of Salty Snax’s board of directors. Teri is a Salty Snax manager whose duties include the firm’s day-to-day hiring, firing, purchasing, and selling. Umberto is a Salty Snax salesperson, whose daily activities are controlled by Teri. Velma writes sales manuals and promotional materials for Salty Snax’s products according to Roman’s instructions and subject to Salty Snax’s control, but has no dealings with the company’s customers or suppliers. Warren writes copy on a contract-per-project basis and is not otherwise subject to Salty Snax’s control. Who is a principal? Who is an agent? Who is an employee? Who is an independent contractor?
- Juan, a businessperson, is a friend of Laura, the owner of a coffee and baked goods store. Every day, Juan spends around ten minutes in Laura’s store, looking at the baked goods and usually buying one or two items. One afternoon, Juan goes into the store, looks at the items, and picks up a $3 chocolate chip cookie. Juan waves the cookie at Laura without saying a word and walks out. Laura sees Juan wave the cookie and says nothing. Is there a contract? If so, how would it be classified in terms of formation, performance, and enforceability?
After answering the above question, now, assume the same facts as above, except the next time Juan comes into the bakery, Laura shouts out: “Hey, Juan you owe me some money for that chocolate chip cookie. Pay my sister the next time you see her.” What result?
- Recreation & Sports Equipment Corporation sells a product online that is capable of seriously injuring consumers who misuse it in a foreseeable way. Does the firm owe an ethical duty to take this product off the market? What conflicts might arise if the firm stops selling this product?
Apart from the ethical duties, might a government agency step in and examine any claim of harm?