Review After Restitution
Two scenarios involving promises made, contracts signed, and breaches of agreements, leading to legal complications and financial consequences.
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Review After Restitution Richard Warner
Sowle and Brill Steve Sowle hosts Sowle on Soul, a TV talk show in which people recount experiences which have been turning points in their lives. Ralph the Blues man Brill, a famous blues singer and Sowle discuss the possibility of Brill appearing on Sowle on Soul. Sowle says, Why don t you appear on my show on Thursday, December 20. I ll pay you $10,000. Just say Yes and we have a deal. Brill says, It s a deal. They also discuss making it possible to purchase some of Brill s CDs over the Sowle on Soul website. As they are discussing this, Sowle says, What about supplying your new CD, Sole Soul Blues? I really like that one. Brill says, So here s our deal. You prefer the Sole Soul Blues CD, but whatever I send is acceptable. Sowle says, That s the deal. The next day Brill sends Sowle a signed written agreement in which he agrees to sell Sowle 1000 CDs for $5,000. When he receives the agreement, Sowle calls Brill. He says, I see you specified the CD s as Sole Soul Blue CDs. Brill says, Right, I am pretty sure I can get those for you. Sowle says, If you can, great; otherwise, . . . well, just do your best. The next day, Sowle signs and returns the written agreement. (a) Brill promised to send the Sole Soul Blue CD s. (b) Brill did not promise to send the Sole Soul Blue CD s.
Sowle and Wright Steve The Soul Man Sowle runs Wild Vinyl, which sells vinyl records. Richard the 8 Man Wright owns and operates Eight Track, a store catering to collectors of eight- track audio tapes (Wright s motto: Ain t eight, ain t great ). Wright and Sowle agree that Wright will sell Sowle 100 Eric Clapton albums for $1000. Wright decides to make the delivery himself. He picks up the records, but, as he is crossing the Michigan Avenue Bridge, he thinks about just how angry he was when Clapton joined with Steve Winwood and changed the sound of the band s music. He remembers that Sowle liked the Winwood-inspired sound. Possessed by rage, he slams on the brakes, gets out the car, and begins to throw the albums one by one off the bridge, saying with each throw, Take that Sowle-less. When he finally gets control of himself, he has only 50 albums left. When Wright delivers only 50 albums, Sowle accepts the albums and pays Wright $500. There are no cover possibilities. The market price (time and place of breach) is $12 per album. Sowle s UCC damages are 2-713 damages MP KP = $600 - $500 (plus incidental and consequential damages minus expenses save). (a) True (b) False
Charles Whitebread III inherited an all wooden sailing schooner from his father. The boat--The Aphrodite--is famous, among the sailing community, as one of the last and most beautiful examples of its kind. It has aesthetic and historical value as well as sentimental value to Charles. It s market value is $1,000,000. The schooner needs repair and restoration. Charles undertakes the repair to honor the memory of his father and to preserve the aesthetic and historical value of the boat. He hires Mike Gougen to do the repairs. The contract calls for an all wood restoration and specially prohibits the use of fiberglass. The contract price is $100,000. Gougen repairs and restores the boat. In various places, he uses fiberglass impregnated wood. The repaired Aphrodite has a market value of $1,150,000. When Whitebread discovers that some of the wood is fiberglass impregnated, he hires Sarah Woode, who replaces all the fiberglass impregnated wood with regular wood. She charges $200,000 for doing so (assume this is a reasonable price for the work). The fully wooden restored boat has a market value of $1,150,00. If the court measures value by market value, Charles will not receive the cost of completion. (a) True (b) False
Halting Production I am a manufacturer of hair gel. You and I have a contract under which I am to make you a 1000 tubes of hair gel. Shortly after we make our contract, the hair gel market falls to $1 a tube. I have not yet begun to manufacture the hair gel you ordered when you breach our contract by telling me unequivocally that you will absolutely refuse delivery and refuse to pay for the hair gel. I go ahead and manufacture it and sell it at $1 a tube, the current market price. It costs me $1500 to manufacture the hair gel. The contract price was $2 a tube. (a) I am entitled to my UCC 2-706 damages of $1000. (b) I am entitled to my lost profits of $500 under UCC 2-708(2). (c) I am entitled to the difference between the contract price of $2000 and the market price of $1000.
The Liquidated Damage Clause In consideration of the special equipment [i.e., the new bagging system] to be acquired and furnished by LAKE-RIVER for handling the product, CARBORUNDUM shall, during the initial three-year term of his Agreement, ship to LAKE-RIVER for bagging a minimum quantity of [22,500 tons]. If, at the end of the three-year term, this minimum quantity shall not have been shipped, LAKE-RIVER shall invoice CARBORUNDUM at the then prevailing rates for the difference between the quantity bagged and the minimum guaranteed. Does this take mitigation possibilities in to account? (a) Yes (b) No
Count On Us Computers You buy a computer from Count on Us Computers. Your contract includes the following liquidated damage clause: If after two attempts to repair any malfunction, Count on Us does not successfully do so, Count on Us shall pay the purchase price to the buyer who gets to keep the computer. Suppose that Count on Us twice fails to repair a minor problem in the display, a problem that is merely a minor nuisance. Is the LDC enforceable? (a) Yes (b) No
The Injustice Requirement To recover in restitution (1) you must have conferred a benefit on the defendant, and (2) it must be unjust to let the defendant retain the benefit. If benefit was transferred to the defendant under an enforceable contract, then (a) It is unjust for the defendant to retain the benefit. (b) It is not unjust for the defendant to retain the benefit.
Basic Furniture and SleepAway Basic Furniture purchased 1000 TuckAway sofas with Grade B fabric at $400 a sofa from SleepAway. At the same time, Basic is negotiating with High End Hotel to resell the sofas to them at $700 a sofa. Before the negotiations with High End are concluded, SleepAway breaches the contract by refusing to deliver the sofas. Basic bought 1000 sofa beds from another supplier at $450 a sofa, the best deal they could get. The sofa beds were essentially the same as the TuckAways except they had Grade A fabric. What measure of damages is correct? (a) 2-712: CP - KP (b) 2-713: MP - KP (c) 2-714: AP AD
