WILLIAM MITCHELL COLLEGE OF LAW

FINAL EXAMINATION

UCC-SALES

December 13, 2005 6:00p.m.

Professor Gendler

(Three Hours)

Student Test No. ________

1.         For anonymity, use your assigned test number which was mailed to you.

2.         Put your test number on this page and on all bluebooks.

3.         If you do not know your test number, you may obtain it in the Registrar’s Office (Room 119) during the first 30 minutes of the exam period.

4.         If you do not use your test number, you will be deemed to have waived your privilege of anonymous grading.

5.         TURN IN YOUR BLUEBOOKS AND THIS EXAM AT THE END OF THE PERIOD.

STUDENT CONDUCT CODE

IT IS A VIOLATION OF THE CODE:

1.   To use any sources which are forbidden by the instructor to complete an exam.

2.   To submit as one’s own work the work of another.

3.   To engage in any conduct which tends to give an unfair advantage to any student n any academic matter.

Knowledge of any violation should be promptly reported.

VIOLATIONS OF THE STUDENT CONDUCT CODE MAY RESULT IN

EXPULSION OR SUSPENSION FROM THE COLLEGE OR DISMISSAL FROM THE CLASS.

GRADUATING SENIORS:  If you are a graduating senior, note this fact on all bluebooks and this exam paper.  DO SO CONSPICUOUSLY.

This is an open book exam.  Good luck. 

QUESTION 1

(35 Points)

Sally Sellereux had just graduated law school.  Her student loan bills were coming due and her credit card was at its limit.  Sally didn’t want to wait to start earning an income.  She wanted to start a business right away.  Sally went to school in an area that had four law schools.  While many wondered why the area had four law schools, it gave Sally an idea.  Sally had always thought the cost of text books was too high and found out that if she sold the books in volume she could get them at a reduced price.  Sally formed Sellereux Books, Inc. (“SBI”).  Sally convinced all four law schools to sign exclusive contracts with SBI to operate the schools’ bookstores.  Your law school signed a five-year contract with SBI to operate its bookstore. Things did not go smoothly. The first semester SBI neglected to place the orders in time for delivery before the semester began. When the books failed to arrive until the third week of the semester, Sally was relieved to note that no time of performance was specified in the contract. When the school administrator called to complain, Sally hung up. The classes made do while they awaited the arrival of the assigned texts. The next semester, most of the timing difficulties had been worked out. But SBI carelessly ordered a number of incorrect texts. For example, Sally placed an order for a bankruptcy book instead of a U.C.C. Article 9 book.  She did this because the author of each book was the same and she failed to pay attention. At the start of the second year, the books appeared to be on the bookstore shelves. But students were not allowed to select the texts themselves—they were required to submit a written order form specifying their classes and an SBI employee selected the appropriate text. Unfortunately, the texts for one local law school ended up on the shelves of your school and vice versa.  To compound matters, SBI’s employees did not notice the error.  So when the students asked for a book for their classes, they received the book being used at a different law school.  Students did not notice (since the book was for the same class but at a different school) and started writing in the books in preparation for class. When the error was discovered and the students attempted to exchange the books, SBI refused because the books were no longer in their original condition. The dean of the law school has had enough. She has asked you advise her of the legal issues raised by SBI’s operation of the bookstore. She has told you that she would like to cancel the contract. If that is not possible, she would like to distribute a list of Internet sites to students and encourage them to purchase their textbooks online. Advise her.

QUESTION 2

 (30 Points)

Southeast Airlines was having financial difficulties, as was the airline industry in general.  Southeast sought certain concessions from its vendors and employees.  Jfuel, Inc. had been Southeast’s supplier of jet fuel for the past ten years.  Jfuel had always given Southeast a 10% discount on jet fuel on Jfuel’s list price.   For instance during part of 2004, Jfuel’s list price for jet fuel was $1.50 a gallon, so the price it charged Southeast was $1.35 a gallon.  Jfuel would charge Southeast the list price at the time the jet fuel was ordered less 10%

During 2004 and into early 2005 jet fuel prices soared.   Southeast was troubled by the increase in price and wanted to negotiate a fixed price for jet fuel.  Southeast contacted Jfuel and the parties agreed that Jfuel would supply Southeast with all the jet fuel it needed at a cost of $3.00 a gallon during 2005 and 2006.  

Late in 2005 the price of jet fuel dropped.   Jfuel’s list price was reduced to $2.60 a gallon.  It billed Southeast at $3.00 a gallon.  Southeast claimed that it was entitled to a 10% discount off the price because in the past Jfuel had always given it a 10% discount so it should not have to pay more than $2.70 a gallon.  Southeast and Jfuel’s contract provided for binding arbitration.  They have hired you as arbitrator.  Decide the case. 

QUESTION 3

(35 Points)

Rocken Rollers hand manufactures high-end roll-top desks.  The customer selects the kind of wood from a selection supplied by Rocken Rollers.  Rocken Rollers begins manufacture after it receives an order and a down payment.  The desks start at $20,000. 

Laura Lawgraduate had graduated from law school six years earlier.  Laura was an associate in a large law firm and was likely to be made a partner the following year.  Laura was an outstanding attorney.  She did not appear in court, but drafted and negotiated contracts.  She was a whiz at talking on the phone to clients and drafting the client’s contract on the computer at the same time.  Laura used her computer extensively for work.  Laura even did her timesheets on the computer.  Laura was also a pianist.  She was quite accomplished and frequently would be compensated for her performances. 

Laura had a banner year in 2004, billing over 2500 hours.  As a result, her year-end bonus was $50,000.  Laura decided it was time to treat herself.  During a rare moment when she wasn’t working or playing the piano, Laura went to Rocken Rollers and ordered a roll-top desk.   It cost $32,500 and was delivered to Laura’s house.  She loved it. 

During February of 2005 she was sitting at her new desk writing a handwritten letter to a dear friend.  Suddenly and without warning, the roll-top “unrolled” and came crashing down on her fingers.  It came down with such force that it broke eight of her fingers.  After a trip to the hospital, Laura contacted Rocken Rollers.  Rocken Rollers inspected the desk and admitted that it had improperly built the desk and that caused the desk top to unroll.  It offered to fix the desk and to pay Laura’s medical costs.  Laura was not satisfied with that offer.  Due to her broken fingers Laura was not nearly as effective at work.  While she made more use of her assistant, had voice recognition software attached to her computer and took other steps she simply was not as productive and could not bill as many hours.  Plus, she missed some time due to the injury.  As a result in 2005 she only billed 1500 hours-not enough for someone nearing partnership.  She was not made a partner and did not earn a bonus for 2005.  For the first time, her clients complained.  Her work was still quality, but her response time was much longer.  Laura also couldn’t play the piano.  She lost the income and the pleasure she derived from playing the piano.

Laura sued Rocken Rollers.  She sought damages of (i) $32,500 for the desk; (ii) medical costs of $22,000 for her broken fingers; (iii) $50,000 for lost income for not receiving a bonus in 2005; (iv) $3,000,000 for the difference in income that a partner would make at her firm compared to what she will make over the course of her anticipated career; (v) $60,000 in lost income from playing the piano; and (vi) $1,000,000 for loss of enjoyment for playing the piano.

You are an associate at a firm representing Rocken Rollers.  A partner has asked you to draft a memorandum setting forth any breaches on the part of Rocken Rollers and any damages to which Laura is entitled.  The contract between Laura and Rocken Rollers does not contain any provisions relevant to this situation.  Your partner is direct.  She has told you that under no circumstances are you to assume any facts that have not been provided to you.  Please draft the memorandum.