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1. Chapter 19 6 points
Terminal Grain Corporation brought an action against Glen Freeman, a farmer, to recover damages for breach of an oral contract to deliver grain. According to Terminal Grain, Freeman orally agreed to two sales of wheat to Terminal Grain of four thousand bushels each at $6.21 a bushel and $6.41 a bushel, respectively. Dwayne Maher, merchandising manager of Terminal Grain, sent two written confirmations of the agreements to Freeman. Freeman never made any written objections to the confirmations. After the first transaction had occurred, the price of wheat rose to between $6.75 and $6.80 per bushel, and Freeman refused to deliver the remaining four thousand bushels at the agreed-upon price. Freeman denies entering into any agreement to sell the second four thousand bushels of wheat to Terminal Grain but admits that he received the two written confirmations sent by Maher.
a. What arguments support considering Freeman to be a merchant who is bound by the written confirmations?
2. Chapter 20 4 points
Tammie contracted with Kristine to manufacture, sell, and deliver to Kristine and put in running order a certain machine. After Tammie set up the machine and put it in running order, Kristine found it unsatisfactory and notified Tammie that she rejected the machine. She continued to use it for three months but continually complained of its defective condition. At the end of the three months, she notified Tammie to come and get it. Has Kristine lost her right (a) to reject the machine? (b) to revoke acceptance of the machine?
3. Chapter 21 6 points
Harrison, a men’s clothing retailer located in Westport, Connecticut, ordered merchandise from Ninth Street East, Ltd., a Los Angeles–based clothing manufacturer. Ninth Street delivered the merchandise to Denver-Chicago Trucking Company (Denver) in Los Angeles and then sent four invoices to Harrison that bore the notation “F.O.B. Los Angeles.” Denver subsequently transferred the merchandise to a connecting carrier, Old Colony Transportation Company, for final delivery to Harrison’s Westport store. When Old Colony tried to deliver the merchandise, Harrison’s wife asked the truck driver to deliver the boxes inside the store, but the driver refused. The dispute remained unresolved, and the truck departed with Old Colony still in possession of the goods. By letter, Harrison then notified Ninth Street of the nondelivery, but Ninth Street was unable to locate the shipment. Ninth Street then sought to recover the contract purchase price from Harrison. Harrison refused, contending that risk of loss remained with Ninth Street because of its refusal to deliver the merchandise to Harrison’s place of business.
4. Chapter 18 4 points
Daniel agreed to erect an apartment building for Steven for $12 million, and that Daniel would suffer a deduction of $12,000 per day for every day of delay. Daniel was twenty days late in finishing the job, losing ten days because of a strike and ten days because the material suppliers were late in furnishing him with materials. Daniel claims that he is entitled to payment in full (a) because the agreement as to $12,000 a day is a penalty and (b) because Steven has not shown that he has sustained any damage. Discuss each contention and decide.
5. Chapter 22 5 points
John Doe purchased a bottle of “Bleach-All,” a well-known brand, from Roe’s combination service station and grocery store. When John used the “Bleach-All,” his clothes severely deteriorated due to an error in mixing the chemicals during the detergent’s manufacture. John brings an action against Roe to recover damages. Explain whether John will be successful in his lawsuit.
6. Chapter 23 5 points
Servebest contracted to sell Emessee two hundred thousand pounds of 50 percent lean beef trimmings for $105,000. Upon a substantial fall in the market price, Emessee refused to pay the contract price and informed Servebest that the contract was canceled. Servebest sues Emessee for breach of contract including (a) damages for the difference between the contract price and the resale price of the trimmings and (b) incidental damages. Discuss