Answer key 2010
(1) The delivery date in the purchase agreement is December 29. Why is
that true?
Assume that any offer was definite and complete. Assume that there was
a definite and seasonable expression of acceptance and that the
expression of acceptance was not expressly conditional on assent to any
additional terms. Only discuss offer and acceptance and no other
doctrines.
It is necessary to determine who made the offer and who accepted.
2/
Who made the offer? Sowle. The offer consists of the
purchase order and Sowle’s note.
4/
Definition of an offer
2/
Manifestation of a willingness to enter a bargain
2/
So made as to justify Stone in thinking his
assent will conclude the bargain
2/
Did Stone accept?
Shoes are goods.
2/
Statement of UCC 2-207(1)
2/
The additional terms do not prevent Stone’s
expression of acceptance from operating as
an acceptance.
2/
Terms are determined by 2-207(2).
2/
Statement of 2-207(2).
2/
Sowle and Stone are merchants.
2/
Between merchants the terms of the contract are the terms
of the acceptance.
The acceptance consists of the purchase order and Sowle’s note,
and Stone’s note. Thus, both the offer and the
acceptance contain the December 29 delivery date.
4/
Therefore, none of the exceptions is relevant.
2/
Therefore, the delivery date is December 29.
1/
(2) Does the purchase agreement contain a warranty of merchantability?
You may refer to rules you used in question (1). No need to restate them.
The warranty is a material alteration.
2/
The contract does not explicitly contain a warranty
of merchantability.
2/
The warranty is implied under 2-314.
2/
(3) Was there offer and acceptance in the case of the distribution
agreement? If so, does the agreement include the promise that Stone
shall be the sole distributor for the shoes purchased and distributed under
Sowle’s campaign, A New Sole Is A New Soul?
Assume that any offer was definite and complete. Assume that any
acceptance was made in a reasonable time and that it was in the manner
requested or invited by the offer.
Who made the offer? Stone. The offer consists of the signed
Agreement and Stone’s note, which contains the
exclusive distribution provision.
4/
Definition of an offer
2/
Manifestation of a willingness to enter a bargain
2/
So made as to justify Sowle in thinking his
assent will conclude the bargain
2/
Did Stone accept?
Distributing the shoes is a service, so the common law applies.
2/
The relevant rule is the mirror image rule. Rule statement.
2/
Offer and acceptance exactly match because the note
“Let’s further agree that you will keep your stores open until
midnight for the first week of distribution. What do you think?” is
not part of the offer.
2/
As shown by “Fantastic. Glad our deal is done.”
Therefore, the exclusive distribution provision is part of
2/
the contract.
2/
(4) Assume that the distribution agreement is an enforceable written
contract. Does the parol evidence rule then make the purchase agreement
unenforceable? Consider only the parol evidence issue; there is no need to
discuss offer and acceptance (or consideration) in the case of either
agreement.
You may use the parol evidence rule as formulated in class and in the
tutorials.
Statement of the parol evidence rule.
2/
Contradiction.
A contradiction is a commonsense contradiction that
cannot be explained away.
2/
The latter written agreement is silent as to the shoe purchase
agreement.
2/
Silence is not a contradiction.
2/
So there is no commonsense contradiction.
2/
Complete integration.
A written agreement is a complete integration if the parties
intend it to be the complete and exclusive statement of
their obligations.
2/
They did so intend as evidenced by the conversation
“Great. All looks good. This is the whole deal, right?”
Stone responds, “Right.”
4/
Scope
Statement of the normal inclusion test.
The parties would not normally have included the
purchase agreement in the distribution agreement.
4/
So the purchase agreement is not in the scope of
distribution agreement.
2/
Hence, the parol evidence rule does not make
the purchase agreement unenforceable.
2/
(5) Assume that Stone’s promise that information about the distribution
would be accessible on the Red Stein website included a promise to give
Sowle the correct Internet address. Is Stone excused from this contractual
obligation under mistake doctrine?
Mutual or unilateral mistake?
3/
Unilateral.
2/
Statement of unilateral mistake doctrine.
3/
Basic assumption? Yes.
2/
Who ought to bear the risk of loss?
Both parties are adversely affected by the mistake.
2/
Neither party is in any better position to avoid the
loss. Both could check to see if the address is correct, so
this is not a ground to decide between them as to
who ought to bear the loss.
3/
But even if one decided Stone ought not to bear
the loss, it would not be unconscionable to enforce the
contract.
3/
So Stone is not excused.
2/
(6) Assume Sowle breached his promise that Stone would be the exclusive
distributor of the shoes? What are Stone’s damages?
Expectation damages
Contract performed position
Result of the breach/proper mitigation
2/
2/
Difference
2/
Foreseeability
4/
Proof
1/
Reliance damages
Definition
2/
Recovery
2/
(7) Does the misunderstanding Sowle and Oprah have about “Oprah’s
studio audience” mean there is no contract for the shoe donation?
No trade usage
2/
Objective intent test
Statement
Unresolvable ambiguity
2/
4/
Misundertanding? Yes
2/
Neither party had reason to be aware
of the misunderstanding.
2/
So no contract under Restatement 201
2/
Restitution is a reasonable remedial option
4/
Alternate mistake analysis
Statement
2/
Mutual mistake (they think they mean
the same thing)
2/
Neither party should bear the risk of loss from
Enforcing the contract
2/