WILLIAM MITCHELL COLLEGE OF LAW
FINAL EXAMINATION
UCC-SALES
December 13, 2006 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 in 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.
QUESTION 1
(33 Points-One Hour)
David Day is the owner of a private daycare center for preschool children. David bought two air purifiers for use in his daycare center from Silent Air, a company that manufacturers and distributes air cleaners. Before buying the air purifiers David met with Sheila, Silent Air’s salesperson, at his daycare center. David explained that he needed an exceptionally high level of air quality because many of the children had asthma and/or allergies. Sheila assured him that Silent Air’s model would clean and purify the air in the daycare center to the “highest level of purity recognized by the state’s Environmental Protection Agency” (the “EPA”). Sheila also said that the purifiers would run “noiselessly.” David ordered two purifiers from Sheila and paid her. Sheila said the purifiers would arrive within the week
The purifiers were timely received. With them came an owner’s manual, which David did not read. The manual contained a section that read: “There are no warranties, express or implied, given by the seller in conjunction with the sale of these goods. The seller undertakes no responsibility for the quality of goods except as otherwise provided in this contract. The seller assumes no responsibility that the goods will be fit for any particular purpose for which you may be buying these goods, except as otherwise provided in this contract.” The manual also provided that it consisted of the entire agreement of the parties.
David immediately set up the air purifiers. They ran for only a few days and then malfunctioned. Silent Air tried to repair the purifiers, but could not get them to work properly. In addition one of the purifiers made a sound that scared the children. Also, David hired an indoor air quality consultant who came to the daycare center to measure air quality on the days that the purifiers were operating. The consultant found that the air quality didn’t meet EPA’s minimum standards.
Now three months later, David has demanded that Silent Air supply him with two functioning air purifiers that provide efficient, reliable noiseless operations and meet EPA standards. Silent Air responded that it has done as much as it can for David and that it gave no warranties. David is upset and two children have left the daycare center over concerns about air quality.
David has hired you as his lawyer and asked you if he has any recourse against Silent Air. How do you respond?
QUESTION 2
(37 Points-1:10)
The Buy at Home Network (“BHN”), holds a Gold Rush Day every May 1. The Gold Rush Day is a big hit because it comes just in time for Mothers' Day shopping. BHN needs its inventory in time to stock it properly and prepare for the show. In March of 2006, BHN entered into a contract with Goldy’s to provide all of the jewelry BHN would require for Gold Rush Day. The contract provided that BHN would pay Goldy’s $2 million for an assortment of necklaces, bracelets, earrings, watches and pendants, and that half of the assortment would be in 14K gold and half in 18K gold. Delivery was to take place on April 15. At a jewelry trade show on April 1, BHN repeatedly heard rumors that Goldy’s was in financial difficulty. Concerned that Goldy’s would not have the necessary merchandise by April 15, BHN faxed a letter on April 2 to Goldy's requesting assurance that the delivery would take place as scheduled. On April 5, BHN emailed Goldy’s reiterating its concerns. By April 12, BHN still had not heard from Goldy’s. BHN then faxed Goldy’s a letter informing Goldy’s that BHN was canceling the contract. On April 13, BHN contacted Fool's Gold requesting delivery of the identical assortment of jewelry for delivery on April 15. Fool’s Gold agreed to sell the assortment, at a price of $3 million because of the short notice. On April 14, Goldy’s called BHN and advised BHN that it would be able to perform and would deliver the next day. BHN advised Goldy’s that it considered the contract cancelled. Goldy’s delivered the correct assortment near the end of the day on April 15. BHN put the jewelry in its warehouse and sent Goldy’s an email and a fax saying that the contract had been cancelled and Goldy’s should come and get its jewelry.
On April 15, Fool's Gold delivered an assortment of gold jewelry, but it was all 14K gold. BHN did not discover that all the gold was 14K until May 1 at the end of Gold Rush Day when it went to ship the jewelry to its customers. During the show, BHN sold all of the 18K jewelry it was supposed to have received from Fool’s Gold. BHN’s called Fool’s Gold the morning of May 2 and insisted it immediately receive the 18K gold it was suppose to received and wanted to return the “wrong” 14K gold to Fool’s Gold. Unexpectedly on May 2, the price of gold skyrocketed. Fool’s Gold responded on the phone, “we’re sorry we erred and delivered all 14K, but we can’t get any 18K gold now. Why not send it to your customers, tell them it’s 14K and that you’re taking 20% of the price? Everyone’s happy that way.” BHN refused to do so and instead apologized to its customers who had ordered 18K gold and refunded their money. BHN claimed it sold the 18K gold for $2.2 million (the price attributable to its purchase was $1.7 million), that it had $100,000 of costs in contacting its customers and that it lost future sales to these customers in an amount exceeding $5,000,000. It sued Fool’s Gold and Fool’s Gold has counterclaimed for the $3,000,000 purchase price of the gold that BHN’s has refused to pay. Goldy’s has sued BHN for the $2,000,000 purchase price for the gold it was to have sold BHN claiming BHN breached by accepting that gold or wrongfully rejecting it. BHN’s has countersued Goldy’s for $1,000,000. The two cases were consolidated and assigned to you as judge. Decide the cases.
QUESTION 3
(30 Points-Fifty minutes)
Pioneer Peat, Inc. produces and sells peat moss which is used to construct golf course greens. Pioneer Peat markets the name of the peat it sells as Dakota Peat. Richard Colyer owns Golf Agronomics, a company that blends topsoils for golf course greens. Golf Agronomics purchases peat moss to blend with sand to obtain a "root-zone mix" that is placed on golf course greens to ensure proper drainage on the greens.
Colyer contacted Jerry Schmitz at Pioneer Peat in February 2006 to purchase Dakota Peat moss to use on a golf course where the project engineer's specifications required Dakota Peat. During this conversation, Colyer advised Schmitz that he needed to receive a shipment of peat "early" so that the peat could be calibrated with sand to determine the proper root-zone mix for the project. Because he did not have enough storage space for an entire peat shipment, Colyer did not initially order all of the peat he needed.
Golf Agronomics received the first shipment of Dakota Peat in March 2006. Samples were taken from the shipment and mixed with sand in a blending machine to create an appropriate root-zone mix. In April 2006, Golf Agronomics ordered another shipment of Dakota Peat and received a shipment that matched the first shipment. In June 2006, Golf Agronomics ordered the third and final shipment of Dakota Peat which was delivered June 30th. Raw samples of peat were taken from this shipment too and blended with the same sand, in an attempt to create the proper root-zone mix, based on the calibration of the previous shipments. Test results showed that the fiber content in the peat changed from the first two shipments to the third, and that the change affected the root-zone mix. On July 26, 2006, Colyer informed Schmitz that the project architect rejected the third shipment of Dakota Peat because it did not match the first two shipments and failed to comply with United States Golf Association specifications. Anxious to get the golf course ready, Colyer substituted Canadian sphagnum peat for the project. On August 1, 2006 Pioneer Peat delivered replacement peat that matched the fiber content in the peat from the first two shipments. Golf Agronomics said it was too late, that it had already obtained and begun using the Canadian sphagnum peat. Golf Agronomics refused to pay for the third shipment.
Pioneer Peat sued Golf Agronomics in November 2006 to collect payment for the third shipment. Golf Agronomics denied responsibility for payment.
Discuss