SAMPLE QUESTION #l
Mabel Thorpe, a Tulania homeowner, tried to tame her garden, God knows. She diligently weeded, pruned, edged and mowed, all to no avail: 15 minutes after ceasing her labors, the vines had run wild again, the St. Augustine was kneehigh, and insects had infested yet another bush. She flipped through the yellow pages to "Landscaping" and elected to call Gardens by Gorgeous George because she remembered receiving in the mail a flier addressed to occupant which read "We will solve your garden woes!" Mabel dialed the number, and George answered the phone.

 "Help," said Mabel. "Please come right over and take a look at this mess." A short time later, George pulled up in his truck. He followed Mabel around with a clipboard, scribbling notes, as she pointed out the trouble spots. "I can't cope," sighed Mabel, "please make it perfect." George finally spoke. "I know just what to do," he cooed reassuringly. They sat down at the patio table. George wrote out a contract while Mabel slapped at the groping wisteria vines with a flyswatter. When George finished writing, he casually pushed the clipboard over towards Mabel and offered her a pen. Mabel, perspiring visibly, picked up the clipboard and reached for the pen.

 On the clipboard was a pre-printed work order form. Under the heading "Description" George had written the following: 1) Eradicate banana trees and wisteria vines; 2) Raise beds (Includes building brick borders); 3) Remove old dirt, replace with fresh topsoil; 4) Install sod; 5) Plant hibiscus, gardenias, elephant's ear, morning glories and assorted flowering perennials.

 The total price listed for the goods and services was $1,200. Mabel looked at George with raised eyebrows and poised pen: "Are you sure this will be low-maintenance?" George replied, "It will be stunning. All you will have to do is admire your garden, once I get through with it. " Mabel's eyes sparkled; she signed the form contract, right under the large print, which read: "THIS WRITING, INCLUDING THE TERMS AND CONDITIONS PRINTED ON THE BACK OF THIS FORM, CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES. BUYER ACKNOWLEDGES THAT S/HE HAS READ THE ENTIRE AGREEMENT PRIOR TO SIGNING."

 Needless to say, Mabel did not bother to turn over the form and read the 25 paragraphs printed there. If she had, her attention would certainly have been drawn to the following two provisions:

14. GORGEOUS GEORGE MAKES NO WARRANTIES WHATSOEVER, NONE, NEITHER EXPRESS NOR IMPLIED, N-O-N-E. COUNT YOURSELF LUCKY THAT WE ARE WILLING TO ATTEND TO YOUR PITIFUL PATCH OF TURF.

19. IN THE EVENT YOU HAVE THE POOR TASTE TO BE DISSATISFIED, YOU MAY, WITHIN 7 DAYS AFTER DELI-VERY, MAKE A DEMAND ONUS FOR REMEDY IN THAT CASE, OUR SOLE OBLIGATION SHALL BE TO PROVIDE YOU WITH A COUPON BOOK REDEEMABLE AGAINST FURTHER PURCHASES FROM US. AFTER THAT 7 DAY PERIOD, YOU ARE ON YOUR OWN. UNDER NO CIRCUMSTANCES WILL WE BE LIABLE TO PAY DAMAGES OF ANY KIND, INCLUDING CONSEQUENTIAL OR INCIDENTAL DAMAGES.

The following week, Gorgeous George and his crew came in and performed under the contract. When they finished, Mabel's garden was indeed a work of art. She wrote out a check to George, and retired to the patio with a mint julep to admire the new plants. Soon the rains came, and startling things began to happen. First, the sodded grass grew 7 feet in one night. Mabel could not leave her house because the spiky grass formed a dense, impenetrable wall around it, so she contacted a machete crew and arranged for them to come each morning (at $50/day) to cut a path for her to leave home. (She was able to get into the house each night by jumping over the day's 3 feet of growth.) Also, the rapid growth of the grass strangled the plumbing under Mabel's house and necessitated repair of the entire works (to the tune of $3,500).

 The morning glory vines planted by Gorgeous George proved to be equally insidious. In the course of their vigorous growth, they wrested gutters from their mounts and tore wrought iron grillwork out of its concrete base. These vines proved unstoppable, so Mabel has not yet contacted anyone to repair this damage. When the vines started breaking through windows and demolishing furniture that happened to lie in its path, Mabel had to be taken to the funny farm for rest. The bills for her care amount to $1,000/day. Finally, the 6 hibiscus bushes withered and died, but no one was home to notice.

 Mabel's legally appointed guardian contacts you, a well-known plaintiff's attorney, and asks what contractual claims Mabel has against Gorgeous George. Please advise the guardian. For purposes of your answer, assume that the transaction is a purely domestic one, and that a contract has been validly formed between Mabel and Gorgeous George.

 

 

CONTRACTS II 1989 ANSWER KEY

PART I (60 POINTS):

 -Basics from readings (30)
 -Original ideas (30)

PART II (60 POINTS):

 -General (10)
 -Statute of frauds (5)
 -2-204 Formation in general (15)
 -2-206 Offer & acceptance (5)
 -Expanded scope of contract (15)
 -2-104 Merchant (5)
 -Other 2-205, 2-207, 2-209 (10)

PART III (120 POINTS): 

A.

    -Law governing formation (10)
    -Hurdles in general (5)
    -Formation rules (10)
    -Open price term 2-305 (5)
    -Statute of frauds (20)
    -Waiver of writing requirement (10)
B.
    -Terms of agreement (15)
     -General obligations (3)
     -Seller's obligation to tender delivery (27)
     -Risk of loss (15)
 

PART IV (60 POINTS):

-Transaction within scope of UCC (10)
-Express warranty (10)
-Implied warranty of merchantability (5)
- Implied warranty of fitness for purpose (5)
-Effective disclaimer of warranty (10)
-Effective limitation of remedy (10)
-Unconscionability (10)


BONUS:


TOTAL POINTS:



1989 CONTRACTS II ANSWER KEY

1. Does this transaction fall within the scope of the UCC?
    -GENERAL PROVISIONS
      -2-101: this Article shall be known and may be cited as UCCSales

      -2-102: unless the context otherwise requires, this Article applies to transactions in goods

    -DO WE HAVE A TRANSACTION IN GOODS?

      -2-105 (1): "goods" means all things which are movable at the time of identification to the contract for sale; also includes growing crops and other identified things attached to realty as described in 

      -2-107 -2-107 (2)-: a contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto [but not minerals or the like or timber to be cut] is a contract for the sale of goods within this Article whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting

    -DO WE HAVE A SALE?

      -Predominant factor test: thrust, purpose, reasonably stated, is transaction of sale with labor incidentally involved or vice versa
        -Either-or test; mechanical

        -Compare costs of each; separate price charged?

      -Sheehan policy-oriented approach to deciding whether to imply warranties with respect to goods sold as part of a hybrid transaction in which service predominates
        -Construct pool and sell equipment; diving board not structurally integrated into pool; optional accessory; movable when identified to contract; remains detachable; considered alone, it is goods

        -Shift loss, distribute risk; difficulties in proving negligence; consumer reliance

      -Anderson: apply UCC to hybrids insofar as contractor's obligations with respect to the goods themselves are involved, at least where goods involved could have been purchased in the general market and used by plaintiff

      -Gravamen test: does gravamen of action involve goods or services?

      -Common sense? Administrative convenience? Other basis for distinguishing sales from services?

    -SHOULD UCC BE EXTENDED BY ANALOGY TO CASES "CLEARLY BEYOND ITS SCOPE"?

      -UCC has rules not readily available at common law or under other statutes (e.g. omission from yellow pages, availability of 2-302)

      -Superior law; developed by commercial experts

2. Express warranty

    -2-313 (1)(a): express warranties by the seller are created ...by any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain

    -2-313 (2): it is not necessary to the creation of an express warranty that the seller use formal words such as "warrant" or "guarantee" or that he have a specific intention to make a warranty, but-an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty

    -Any part of a negotiation which ends in a contract is included; in actual practice affirmations of fact made by seller about the goods during a bargain are regarded as part of the description of those goods; hence no particular reliance on such statements need be shown in order to weave them into the fabric of the agreement;. rather, any fact which is to take such affirmations, once made, out of the agreement requires clear affirmative proof; issue normally is one of fact (Comment 3)

      -Unobserved and subtle analysis that has to do with reasonableness of plaintiff's reliance, seriousness of plaintiff's injury, and other factors

      -Consider nature of defect (obvious or not?); nature of plaintiff's reliance; and relative knowledge of buyer and seller (did seller assume to assert a fact of which buyer was ignorant, or did he merely express a judgment on something as to which wach of them might be expected to have an opinion?)

    -The precise time when words of description or affirmation are made or samples are shown is not material; the sole question is whether the language or samples or models are fairly to be regarded as part of the contract; if language is used after the closing of the deal, the warranty becomes a modification, and need not be supported by consideration if it is otherwise reasonable and in order (Comment 7)

      -Representation removed in time and place from actual sales negotiation (flier addressed to occupant "We will solve your gardening woes!"): must be read, at least

    -Concerning affirmations of value or a seller's commendation under subsection (2), the basic question remains the same: what statements of the seller have in the circumstances and in objective judgment become part of the basis of the bargain? All of the statements of the seller do so unless good reason is shown to the contrary; but common experience discloses that some statements or predictions cannot fairly be viewed as entering into the bargain (Comment 8)

    -Can Gorgeous George's statement ("all you will have to do is sit back and admire your garden") be admitted into evidence?

      -2-202: is writing intended by parties as a final expression of their agreement with respect to such terms as are included therein? How can you get around the parol evidence rule?

    -Fraud? Misrepresentation? (2-313, Comment 8)

    -Where seller has disclaimed all implied warranties, proof of an express warranty may be crucial to buyer's case

3. Implied warranty of merchantability

    -2-314 (1): unless excluded or modified, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind

      -Gorgeous George is presumably a merchant

    -2-314 (2): goods to be merchantable must be at least such as (a) pass without objection in the trade under the contract description; and (b) in the case of fungible goods, are of fair average quality within the description; and (c) are fit for the ordinary purposes for which such goods are used; and (d); and (e); and (f)

      -Subsection (2) does not purport to exhaust the meaning of "merchantable" nor to negate any of its attributes not specifically mentioned in the text of the statute, but arising by usage of trade or through case law; the language "must be at least such as" leaves open other possible attributes of merchantability

    -2-314 (3): unless excluded or modified other implied warranties may arise from course of dealing or usage of trade

    -Question when warranty is imposed turns basically on meaning of terms of the agreement as recognized in the trade (Com.2)

4. Implied warranty of fitness for a particular purpose
    -2-315: when the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified an implied warranty that the goods shall be fit for that purpose

 

5. Has there been an effective disclaimer of warranty? In this case, the contract states that "Gorgeous George makes no warranties whatsoever, neither express nor implied, n.o.n.e."

    -HAS AN EXPRESS WARRANTY BEEN DISCLAIMED?

      -2-316 (1): words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of 2-202 on parol or extrinsic evidence, negation or limitation is inoperative to the extent such construction is unreasonable

      -Express warranties rest on "dickered" aspects of the individual bargain, and go so clearly to the essence of that bargain that words of disclaimer in a form are repugnant to basic dickered terms (2-313, Comment 1)

    -HAVE IMPLIED WARRANTIES BEEN DISCLAIMED?

    -2-316 (2): subject to subsection. (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous

    -2-316 (3)(a): notwithstanding subsection (2) unless the circumstances indicate otherwise, all implied warranties are excluded by expresions like "as is", "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warrantv

    -2-316 (3)(c): an implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade

    -whether or not language of disclaimer satisfies the requirements of subsection (2), such language may be relevant under other sections to the question whether the warranty was in fact ever created (Comment 5)

6. Has there been an effective contractual modification or limitation of remedy? In this case, the contract states that buyer "may, within 7 days after delivery, make a demand on seller for remedy; seller's sole obligation shall be to provide coupon book redeemable against further purchases from seller; after that 7-day period, you are on your own; under no circumstances will seller be liable to pay damages of any kind, including consequential or incidental damages"

    -2-316 (4): remedies for breach of warranty can be limited in accordance with 2718 and 2-719

    -2-719 (1)(a): subject to subsections (2) and (3), the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure o= damages recoverable under this Article, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement o= nonconforming gccds or parts

    -2-719 (1)(b): resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy

    -2-719 (2): where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this Act

    -2-719 (3): consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable; limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation where the loss is commercial is not

 

7. Unconscionability?


    -2-302 expressly applies to "any clause of the contract" and

    - neither 2-316 nor 2-719 affirmatively states that limitations meeting its requirements are immune from 2-302

    -Purpose-prevention of unfair surprise and oppression (this is a stated purpose of 2-302 as well as 2-316)

    -Substantive unconscionability-oppressively one-sided and harsh terms of contract, e.g. unduly limit debtor remedies; price unduly excessive

    -Procedural unconscionability-manner and process by which terms become part of the contract, e.q. consumer ignorance; inconspicuous language (1-201 (10)reasonable person against whom it is to operate ought to have noticed it)

    -Party raising issue of unconscionability bears burden of proving, as a matter of law

    -Some courts hold that, if a modification or limitation complies with 2-316 or 2719, it may not as a matter of law be deemed unconscionable unless there are procedural irregularities

 

 

 

SAMPLE QUESTION #2

Archie and Mehitabel are old friends. Each has a substantial collection of art. It has been their custom for decades to admire and covet the paintings and sculptures in one another's collections. This year, covetousness got the better of them, and they agreed to an exchange. Mehitabel simply had to get her paws on the Rousseau painting ("The Dream") in Archie's collection, while Archie was dying to get hold of the post-post-post modern classic sculpture ("Roach in Aspic") in Mehitabel's collection.

One evening, over coffee and brandy, Archie and Mehitabel wrote out the following on a napkin:

      We agree to trade "The Dream" for "Roach in Aspic". Since we do not really know what these two works of art are currently worth, we will ask our friend Jay to help us determine the value of each of them. Whoever's artwork is determined to be worth less will then make up the difference in value by making a cash payment to the other. This is our whole agreement.
Each of them initialed the napkin at the bottom.
 The next day, Mehitabel tried to call Jay, who was an appraiser by trade, but discovered that he was off gallivanting around the world and was not expected to return anytime soon. She called Archie to tell him the news about Jay's absence. Archie, nursing a hangover, told Mehitabel that he had changed his mind and that he could not bear to part with "The Dream". "WHAT!", hissed Mehitabel, "you would break your word? Why, I have already hired Edgar to redecorate my living room around the Rousseau." Archie solemnly told Mehitabel that she was crazy if she really thought that he would part with "The Dream".

 A. Mehitabel calls you and asks whether, in your opinion, she has an enforceable agreement with Archie. Advise her of your opinion as to this matter, as well as to any steps you think she ought to take at this point in time.

B. After your conversation with Mehitabel (and regardless of the advice you gave her under A. above), she called Archie and told him that her lawyer said she had an ironclad contract and that he had better hand over the painting by Rousseau. This made Archie jumpy, since lawyers give him the creeps. He sighed and said, "OK, OK, I will go through with the trade ...but let's just swap and not worry about any difference in value between the two artworks. " Mehitabel purred her agreement. Two days later, Mehitabel sent her delivery truck over to Archie's place to deliver "Roach in Aspic". When Mehitabel's driver showed up, however, Archie refused to accept "Roach in Aspic" and also refused to hand over "The Dream". When Mehitabel found out about this, she called Archie and shrieked, "YOU INSECT! ARE YOU TRYING TO RUIN MY DAY? First you say you will, and then you won't..." Archie clicked his tongue and said, quietly, "Have you lost your mind? I never agreed to go through with the trade ...and that crumpled napkin will not be of much use to you, except to wipe your tears on."

Mehitabel, in a rage, calls you again. She wants to know whether she can hold Archie to the - oral agreement to exchange "The Dream" for "Roach in Aspic". Advise her as to whether you think she would succeed in an action against Archie for breach of contract.

 

 

                  CONTRACTS II 1990 GRADING KEY


QUESTION I (100 points)

-Purposes of SF
-Abuses of SF
-Amendments


QUESTION II (100 points)

-Application of UCC/CISG/COL (20)
-BE's arguments (35)
-BE's terms control agreement (disclaimer)
-BE had right to substitute (no breach)
-No modification
-No express warranty
-PHILLIPS' arguments (35)
-PHILLIPS' terms control the agreement
-Express warranty
-Modification
-Other points (10)

QUESTION III (100 points)

-Scope of UCC/goods?/barter (10)
-SF requirements met? (10)
-Formation:2-204 (25)
-Open price term (10)
-1-103 (PE) (5)
-Effect of oral agreement (30)
-Other points (10)

 

 

SAMPLE QUESTION #3
After lengthy negotiations, Maria Machmal and Tom Tuwat entered into a written agreement under which Maria granted to Tom the exclusive right to sell Maria's patented GIZMOS in the United States west of the Mississippi River (the "Territory"). All GIZMOS would continue to be manufactured by Maria. Under the terms of the contract, Maria agreed to sell to Tom all the GIZMOS he would need to supply customers in the Territory (i.e. his requirements), and Tom agreed to use his best efforts to sell GIZMOS in the Territory. The contract was for a term of five years, unless sooner terminated, and could be renewed for an additional five-year term upon mutual agreement by the parties.

 One clause of the contract provided that "THIS WRITING CONTAINS THE ENTIRE AGREEMENT OF THE PARTIES AND MAY NOT BE MODIFIED EXCEPT IN WRITING." Another clause provided that "EITHER PARTY MAY TERMINATE THIS AGREEMENT WITHOUT CAUSE BY GIVING WRITTEN NOTICE TO THE OTHER PARTY. SUCH TERMINATION SHALL BE EFFECTIVE 30 DAYS AFTER RECEIPT BY THE OTHER PARTY." ["Without cause" means that the terminating party need not have any reason for terminating the contract; s/he may terminate in his or her unfettered discretion. "With (good) cause," in contrast, means that the terminating party must have some reasonable basis -- in the eyes of the court -- for terminating the contract.]

 After the contract was executed, Tom got busy. He signed a two-year lease on a downtown showroom for the GIZMOS, hired three people to help him sell and provide after-sale service for the GIZMOS, and placed an initial order with Maria to build up his inventory of GIZMOS and related spare parts. Tom was in hock up to his teeth. His efforts gradually began to pay off. During the first year of the contract, Tom sold 100 GIZMOS at $10,000 apiece (totalling $1,000,000). Tom was pleased with the level of GIZMO sales, although he was still deep in debt, due to the heavy start-up costs he had incurred that year. According to the business plan he had prepared when the contract was being negotiated, Tom would not break even until the end of the third year.

 Halfway through the second year of the contract, Maria sent Tom a letter purporting to exercise her right to terminate, stating no reasons for doing so.

 Upon receiving Maria's letter, Tom immediately calls his lawyer to make an appointment. The partner invites you, a new associate, to sit in on the meeting with Tom.

 During the meeting, Tom states that he wants you to find a way to nr event Maria from terminating the contract. He wants to continue selling GIZMOS in the Territory at least through the third year of the contract so that he can recoup his investment. Tom says that he and Maria had orally agreed when executing the contract that they would give each other at least 12 months' notice in case either of them had to terminate the contract. He also says that it is customary to require the manufacturer (i.e. Maria) to show good cause when terminating an exclusive dealership contract. The partner asks you to prepare a memorandum explaining the issues raised by Tom's case, and to be creative in looking for ways to prevent Maria from terminating the contract with Tom. ASSUME FOR PURPOSES OF YOUR ANSWER THAT THE UNIFORM COMMERCIAL CODE IS THE LAW THAT GOVERNS THIS CONTRACT.

 

 

SAMPLE QUESTION #4
Pierre Le Saucisse, a world class sausage maker, received a letter of inquiry from O'Levy Foods, a gourmet food distributor. In the letter, O'Levy's president expressed an interest in buying some of Pierre's sausage. Pierre responded by sending O'Levy a copy of his standard price quotation form. Pierre's form provided as follows:

      PIERRE OFFERS TO SELL SAUSAGES ONLY ON THESE TERMS. PRICES AS LISTED. DELIVERY WITHIN 30 DAYS OF DATE ORDER IS RECEIVED. NO WARRANTIES, EXPRESS OR IMPLIED, EXCEPT THAT SAUSAGES SHALL BE FIT FOR HUMAN CONSUMPTION.
Two weeks after receiving Pierre's price quotation form, O'Levy sent Pierre a letter which provided:
      WE AGREE TO BUY 1,000 SAUSAGES AT THE PRICE AND ON THE TERMS IN YOUR QUOTATION. WE INSIST, HOWEVER, THAT YOU AGREE TO THE FOLLOWING TERMS: FIRST, DELIVERY MUST BE WITHIN 14 DAYS OF DATE ORDER IS RECEIVED; SECOND, SAUSAGES MUST MEET U.S.D.A. [United States Department of Agriculture] STANDARDS FOR "GRADE A" CLASSIFICATION. NOTIFY US IMMEDIATELY IF THESE TERMS ARE NOT ACCEPTABLE.
Pierre received O'Levy's letter and immediately shipped 1,000 sausages to O'Levy. Upon receipt of the sausages, it became apparent that the quality of the sausages was inferior, and that they did not meet the U.S.D.A. "GRADE A" standards. The president of O'Levy consults your law firm and asks for advice in connection with her intention to sue Pierre for breach of warranty. Prepare a memorandum for your client, advising her what (if any) warranty applies to the sausages purchased from Pierre. Be sure to explain how you reach your conclusion.

 

 

CONTRACTS II 1991 GRADING KEY


QUESTION I.A. [100 points]

 -Scope of UCC
 -Transaction in goods
 -Hybrid (mixed goods & services)
 -Formation of Contract
 -2-204(1) Any manner sufficient to show agreement
 -2-204(2) Even though moment of its making is undetermined
 -2-204(3) Open term (price)
 -Statute of Frauds
 -2-201(1)
 -2-201(2)
-1-204 Is Stella a merchant?
-2-201(3)(a) Specially manufactured goods?
-2-201(3)(c) Part payment ...severable contract
 -Price of Dentures
 -2-305

QUESTION I.B. [50 points]

 -Express Warranty
 -2-313(i) By affirmation, promise, description, sample
 -Relates to goods & becomes part of basis of bargain
 -Modification of Contract
 -2-209(1) No consideration required
-2-209(3) Statute of frauds must be satisfied if contract "as modified" is within its provisions
-Pass through doctrine
-2-209(4) Waiver?



QUESTION II [75 points]

 -Parol Evidence Rule
 -2-202(a) Usage of trade evidence
-2-202 (b) Consistent additional term?
-Effect of merger clause
 -Unconscionability

QUESTION III [75 points]

 -Scope of CISG
 -Battle of the Forms
 -2-207(1)
 -2-207(2)
 -2-207(3)
 -CISG Article 19
 -Implied Warranty

TOTAL POINTS =___________________