Office #: (Law 524-001) M W 3:30pm-5:00pm; CLC 1403
August 9, 2022 Version
Master Course Assignments Document
Please sign up for the TWEN web site I have prepared for the course. I will also prepare a parallel SAKAI web site. Important supplemental course materials will also be posted on the course web sites.
Below I’ve set out the tentative assignments for the course. These assignments may be amended or modified from time to time, but whenever I do so the amendments or modifications will be posted on our course websites.
I do not anticipate getting beyond the key definitions listed in Section 2 of this Assignments Document and Problem 2.1 in our first week of the course.
- For an introduction to the course, please read pages 1-8 of Whaley and McJohn, Problems and Materials on the Sale and Lease of Goods (Aspen, 8th ed., 2019).
- GENERAL CODE PRINCIPLES
Any recent edition of the Whaley casebook will suffice, if you’re willing to accept differences in pagination and the numbering of the problems. Also, in a few instances (regardless of your edition), you will be asked to access specific cases online.
In addition, you should carefully read the following sections of the Uniform Commercial Code (the “Code”) in the statutory supplement for the course (Baird, Commercial and Debtor Creditor Law: Selected Statutes (Foundation Press 2022 ed.) Other recent editions of this statutory compilation will also suffice:
Please read through the following
1-205 (reasonable time)
1-304 (good faith)
1-302 (limitations on variations by agreement)
1-103(b) (incorporation of general principles of law and equity)
1-201(b)(3) (definition of agreement)
1-201(b)(12) (definition of contract)
2-612 (installment contracts)
2-601 (single delivery contracts)
1-303 (cp, cd, and tu)
2-209 (agreements of modification)
The express terms of a lengthy and detailed written installment contract between a seller and a buyer of widgets stipulates
(a) that the widgets are to be delivered around the 15th of each month over the course of a calendar year; and
(b) that the widgets are to be red widgets.
Subsequently, on the 15th of each month from January through August, the seller delivers blue widgets and the buyer accepts blue widgets without objection. On September 15, after the market price of widgets has dropped far below the contract price, the buyer rejects a shipment of blue widgets on the grounds that the express terms of the agreement call for red widgets.
(2) UCC 1-103(f) cross references UCC 2-209. At traditional Common Law agreements or promises of modification were required to be supported by consideration in order to prevent the “hold-up” game in which one party might attempt to coerce the other party into a modification with threats of non-performance.
By dropping the consideration requirement in relation to “agreements of modification” does UCC 2-209 now permit coerced modifications in relation to contracts for the sale of goods?
(3) UCC 1-303(f) also refers to the common law concept of “waiver.”
Please define the term waiver.
Is the invocation of waiver in 1-303(f) permissible under 1-103(b)?
(4) Explain why Problem 2.1 is an example of a so-called “installment contract.” See UCC 2-612 and Comments.
(5) Please carefully read and compare and contrast UCC 2-612 (installment contracts) and 2-601 (single-delivery contracts).
At first glance, UCC 2-601 appears to carry forward the old Uniform Sales Act’s “Perfect Tender Rule” in relation to single-delivery contracts. Does UCC 2-612 also carry forward the Perfect Tender Rule standard in relation to installment sales contracts, or is 2-612 more akin to the “substantial performance/material breach” paradigm generally applied by the common law in non-UCC cases?
- ARTICLE 2 PAROL EVIDENCE RULE
- Read Section 2-202 (Article 2 Parol Evidence Rule) and its Comments
- Read Columbia Nitrogen v. Royster on pages 82-86 of the casebook.
Does the Parol Evidence Rule in UCC 2-202 ultimately govern the disposition of the case?
If not, explain why not and identify the Code section that ultimately governs the disposition of the case. Please be prepared to discuss critically the manner in which the Columbia Nitrogen court applies the particular Code Section.
(c) We’ll next study Question on page 87 of the casebook.
(d) Then we’ll do the Parol Evidence Rule Summary and Problem Set (posted on course website).
(e) Next up will be Problem 11 on pages 81-82 of the casebook.
- ARTICLE 2 STATUTE OF FRAUDS
- ARTICLE 2 OFFER AND ACCEPTANCE CONTRACT FORMATION
(a) Read Section 2-20l (Article 2 Statue of Frauds) and its Comments.
(b) Do Statute of Frauds Problem Set (posted on course website).
(c) Problem 10 of the casebook and the ensuing comment discussing UETA (and similar statutes on pages 69-70 of the casebook).
(a) Read UCC 2-204, 2-205 and 2-206 carefully. Also carefully read UCC 2-207 and its Comments, with particular attention to Comments 4 and 5.
(b) Does the Code define the terms “offer” and “acceptance”? Are basic common law approaches relevant to our understanding of these terms in the context of Article 2? Re-read UCC 1-103(b).
(c) Do Problem 12 on pages 87-88.
- UCC 2-207 AND THE. BATTLE OF THE FORMS
- SCOPE OF ARTICLE 2 TRANSACTIONS
(a) Read UCC-2-207 and its Comments.
(b) Do Problem 14 on pages 89-90 of the casebook.
(c) Read Diamond Fruit Growers v. Krack on pages 90-95 of the casebook.
The following Problem is based on the fact pattern in Problem 16 of the casebook.
The buyer sent seller a written purchase order (the buyer’s offer to buy) for a new tugboat for use in buyer’s fishing business. The buyer’s written purchase order did not contain any express terms regarding the expected quality of the tugboat. The seller (a manufacturer of tugboats) sent a standard acknowledgment form (prepared by seller’s attorney) that contained a statement (in bold conspicuous print) purporting to disclaim the implied warranty of merchantability. Read UCC 2-314(2). The tugboat was then shipped by seller and accepted by buyer (see UCC 2-606) without either party reading the other party’s form. Afterwards, the tugboat had major problems staying afloat. You are the buyer’s attorney. Advise your client whether the contract contains the implied warranty of merchantability in the following scenarios.
(1) You are in a jurisdiction that follows the common law of contracts to determine whether seller’s disclaimer is included in the contract (including the traditional “Mirror Image Rule,” which arguably opens the door to the mechanical application of the so-called “Last Shot Doctrine” as the basis for having the contract formed on the basis of the terms in seller’s acknowledgment form by virtue of the happenstance that seller sent the last form).
(2) You are in a jurisdiction that follows UCC 2-207(1) and (2). With regard to the issue of “materiality,” please carefully read Comments 4 and 5 to UCC 2-207.
(3) What if instead of the warranty disclaimer the seller’s acknowledgment form included the following term: “Any disputes concerning this contract shall be subject to binding arbitration.” Would it matter if arbitration is a usage of trade in the particular industry? See UCC Sections 1-201(b)(3) and 1-303 and cases cited in Problem 15 on pages 95-96 of the casebook.
(4) What if (in addition to the warranty disclaimer as presented in the fact pattern) seller’s acknowledgment form included the following term: “Seller’s acceptance of buyer’s purchase order or its offer to buy is hereby expressly made conditional on buyer’s acceptance of the terms of this acknowledgment form.” Apply UCC 2-207(1) and (3) carefully, while keeping in mind that one of the purposes underlying UCC 2-207 is to avoid the mechanical application of the “Last Shot Doctrine” as the basis for having the contract formed on the basis of the terms in seller’s acknowledgment form by virtue of the happenstance that seller sent the last form). In other words, apply the approach in the Diamond Fruit Growers case in (c) above.
(5) After carefully reading Judge Posner’s description of the majority (“knock-out rule”) and the minority treatments of “different terms” as opposed to “additional terms” in the full paragraphs on pages 107-108, please do Problem 16 on pages 102-103 of the casebook. Since Judge Posner predicts that Illinois would adopt the majority (“knock-out rule),” I would only hold you responsible on the Final Exam for applying the “knock-out rule” if a UCC 2-207 question involves “different terms” rather than “additional terms”
(6) Do Problem 17 on page 110 of the casebook.
2-102 (transactions in goods)
2-106(1) and (2) and Comment 2 (definition of “sale” and conforming to contract)
2-105(1) (definition of “goods,” re “fixtures” compare 9-102(a)(44).
2-501 (identification to sales contract)
2-107 (when things attached to real property are to be removed from real property)
2-612 (installment contracts)
2-601 (single delivery contracts)
- SCOPE OF ARTICLE 2 PROBLEMS
- HYBRID TRANSACTIONS AND PREDOMINANT FACTOR TEST vs. GRAVAMEN TEST
Please do Subsections (a), (b), (d), (f), (g) and (h) of the casebook’s Problem 1.
- Milau Associates, Inc. case (Link to case posted on course website). Please be prepared to discuss the Predominant Factor Test applied in Milau
- Anthony Pools v. Sheehan on pages 32-40 of the casebook. Please be prepared to discuss the Gravamen Test applied in Anthony Pools.
You should also be prepared to compare the Gravamen Test in Anthony Pools to the Predominant Factor test applied in Milau.
- SOFTWARE SALES TRANSACTIONS
- WARRANTIES, THIRD PARTY BENEFICIARIES, STRICT TORT LIABILITY, AND AVAILABILITY OF CODE REMEDIES
(a). Read Simulados Software on pages 26-31 of the casebook. (Link to case also posted on course website).
(b). Compare the Article 2 approaches to software sales transactions discussed in Simulados Software to the Article 9 approach in Section 9-102(a)(75) (Article 9’s definition of “software”) and Section 9-102(a)(44) (Article 9’s definition of “goods” as including a computer program embedded in goods).
- EXPRESS WARRANTIES
- IMPLIED WARRANTY OF MERCHANTABILITY
(1). Read Sections 2-313 and Comments (Express Warranties).
(2). Read the paragraph under the heading “Express Warranties” on page 134 of the casebook.
(3). Read In re Toshiba America on pages 135-139 of the casebook.
(4). Do Problem 25 on pages 139-140 of the casebook.
(1). Read 2-314 and Comments (Implied Warranty of Merchantability).
(2). Read Introduction to Implied Warranties, Shaffer v. Victoria Station, Questions and the succeeding paragraph on pages 140—145 of the casebook.
- IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE
- CORE ARTICLE 2 REMEDIES AND DAMAGES SECTIONS
(1). Read 2-315 and Comments (Warranty of Fitness for a Particular Purpose.
(2). Do Problems 30 and 31 on page 161.
(1). Very carefully read Sections 2-711 through 2-714 (Recovery of Lost Product Value or Direct Economic Loss) and 2-715(Recovery of Incidental and Consequential damages).
(2). In relation to UCC 2-714(1), carefully study UCC 2-606 (acceptance of goods) and UCC 2-607, with particular focus on 2-607(3)(a) (requirement that buyer timely notify seller of breach or else be barred from any remedy).
In addition, please pay particular attention to Comments 4 and 5 of UCC 2-607.
(3). Read Connick v. Suzuki Discussion of 2-607(3)(a) Notification Requirement (Posted on TWEN and SAKAI.)
- RELATIONSHIP BETWEEN RECOVERY OF PERSONAL INJURY AND PROPERTY DAMAGES UNDER UCC 2-715(2)(b) and RECOVERY IN STRICT LIABILITY IN TORT UNDER 402A of THE SECOND RESTATEMENT OF TORTS; MANUFACTURING v. DESIGN DEFECTS
- DESIGN DEFECTS AND THE RELATIONSHIP BETWEEN UCC 2-314AND STRICT TORTS LIABILITY
(1). Re-read Section 2-715(2)(b) of the UCC.
(2). Read Section 402A of the Second Restatement of Torts (reprinted on page 220 of the casebook).
(3). Read Note on Strict Products Liability on pages 220-222 of the casebook, with emphasis on the distinction in the last paragraph of the Note on the distinction between Manufacturing and Design Defects.
(4). Read Summaries of Strict Tort Liability v. UCC Warranties and IWOM and SL re Manufacturing and Design Defects posted on TWEN and SAKAI.
(1). Do Subsections (a), (b) and (d) of Problem 27 (pages 145-146). Re Subsection (a) please follow the link to the discussion of tobacco-litigation cases posted on TWEN and SAKAI.
(2). Webster v. Blue Ship Tea Room (pages 146-150). Please carefully describe how Webster can be fit into the framework of a design-defect case.
- SCOPE OF FORESEEABILITY OF RISKS OF INJURY IN DESIGN DEFECT CASES
- PRIVITY, THIRD PARTY BENEFICIARIES and UCC 2-318
(1). Do Problem 28 (page 150). In Problem 28, your casebook authors allude to the classic design-defect case Larsen v. GM, 391 F.2d 495 (8th Cir 1968), so please read the short excerpt from the court’s ruling in Larsen v. GM that is posted on TWEN. You should pay careful attention to the court’s approach to the foreseeability of Risks of Injury that might trigger a duty to redesign a product.
(2). We will close our study of design-defect cases by taking take a brief look at the famous McDonald’s “hot coffee” litigation, and how it might be evaluated from a Larsen v. GM perspective. See https://www.citizen.org/article/legal-myths-the-mcdonalds-hot-coffee-case/
(1) Carefully read Alternatives A and B of 2-318 (Third Party Beneficiaries of Warranties) and the Comments to 2-318.
(2) Carefully read Reed v. City of Chicago on pages 218-220 of the casebook.
(3) Were Mr. Reed and the sued defendants in “privity of contract” (i.e., did they have a direct contractual relationship with each other)?
(4) Discuss the Reed court’s application of Alternative A of 2-318, the Alternative to 2-318 adopted by the Illinois legislature. What would be the result if the Reed court applied Alternative A exactly as it is written? Did the court apply Alternative A exactly as it is written?
(5) If the Reed court did not apply Alternative A exactly as it is written, what was its basis for not doing so? Please read the Comments to Section 2-318 carefully, as well as Alternative B.
(6) Is the result in Reed consistent with recovery permitted under Section 402A of the Second Restatement in Torts (reprinted on page 221 of the casebook)?
(7) Was Mr. Reed’s estate subject to the 2-607(3)(a) notification requirement? If not, does another section of the UCC impose a notification requirement of sorts? See Comment 5 to UCC 2-607.
- Return to the Milau Associates case. (Link posted on TWEN).
- Were the plaintiffs in Milau Associates in “privity of contract” with the defendants(i.e., did they have a direct contractual relationship with each other) the defendants?
(a) Please be prepared to discuss in depth the passages in Milau Associates, Inc. in which the appellate court criticizes plaintiffs’ attorneys for missing a major argument. In your own words, please be prepared to describe the major argument that plaintiff’s attorney missed. Is this argument based on Article 2 or the common law of contracts?
(b) Review Question: Which provisions of Article 2 permit a buyer to recover Lost Product Value or “Direct Economic Loss”? See 2-711 through 2-714. What types of warranties of quality are recognized in Article 2? See 2-313, 2-314, and 2-315.
- Review. Please keep in mind that Alternative A and Alternative B of 2-318 permit parties who are not in “privity of contract” with a seller (so-called “third party beneficiaries”) to recover certain types of damages for the seller’s breach of warranty in some situations.
- How would their lost textiles be categorized from the perspective of the Milau Associate tenants?
In answering Question 12, you should also carefully review Sections 2-711 through 2-714 (permitting the recovery of Lost Product Value or “Direct Economic Loss”), as well as the categories of “Incidental and Consequential Damages” recognized in Section 2-715.
Would either Alternative A or Alternative B of 2-318 (as written) permit the Milau Associates plaintiffs to recover the value of their ruined textiles from the Milau Associates Defendants, if it were determined that the defendants had indeed breached an Article 2 warranty? Also re-read Section 2—715(2)(b).
Would Section 402A of the Second Restatement of Torts permit the Milau Associates plaintiffs to recover the value of their ruined textiles from the Milau Associates Defendants, if it were determined that the defendants had indeed breached an Article 2 warranty?
- 15. For the Illinois position regarding the issue raised by the preceding question, please carefully read pages 701-707 of Elward v. Electrolux, 214 F.Supp.3d 701 (N.D. Ill. 2016) (Through Part II of the Opinion).
- Water Heater Installation Problem (posted on course website).
Direct Dealings as an alternative basis for Privity.
Please carefully read pages 704-705 of Elward v. Electrolux, 214 F.Supp.3d 701 (N.D. Ill. 2016).
What sort of “direct dealings” between a buyer and a remote seller might provide a basis for a buyer to recover Lost Product Value (Direct Economic Loss) from the remote seller?
Work through this problem carefully because it is one of the Capstone Problems for the entire course.
DISCLAIMER OF WARRANTIES
Read Sections (1), (2) and (3) of 2-316 and its Comments carefully. Also read Comment 1 to UCC 2-313 and UCC 1-201(b)(10) (the definition of “conspicuous”). You might also find it helpful to review the chart summarizing Disclaimer of Implied Warranties that’s been posted on TWEN.
- 17. Return to the Anthony Pools case on pages 32-40 of the casebook. Please compare the standard version of Section 2-316(2)(in your statutory compilation) with Maryland’s version of Section 2-316(2). What policy is being advanced by Maryland’s non-standard approach to warranty disclaimer in its version of 2-316(2).
- 18. Is it easier or more difficult for a seller to disclaim express warranties rather than implied warranties? Compare Section 2-316(1) with 2-316(2).
- Subsections (2) and (1) of Problem 33 on pages 169-170 of the casebook.
- Subsections (a) and (b) of Problem 34 on pages 178-179 of the casebook.
PERFORMANCE OF THE SALES CONTRACT
- 21. Performance of Sales Contract Timeline (posted on TWEN) and pages 285-286 of the casebook.
- UCC 2-106(2), 2-301, 2-507(1), 2-511(1), 2-515, 2-601 through 2-607, 2-608, 2-609, 2-612, and 2-711 through 2-715.
INSTALLMENT SALES CONTRACTS AND SUBSTANTIAL IMPAIRMENT
- We’ll then do Problem 61 of the casebook on pages 286-287 which will allow us to review our earlier coverage of the standards that apply to installment contracts governed by Section 2-612.
- Also please be prepared to explain how Section 2-609 (right to adequate assurance of performance) might be useful in situations like the one described in this Problem.
2-601 SINGLE DELIVERY CONTRACTS AND PERFECT TENDER RULE
- Problem 62 on page 290 and Introduction to Perfect Tender Rule on pages 289-290.
- Please be prepared to discuss the various ways in which certain Code provisions can be used to temper the potential harshness of 2-601’s Perfect Tender Rule. Please note that we have previously discussed some of these approaches earlier in the course, so you might find it useful to review your notes.
RIGHT OF CURE (2-508) AND SHAKEN FAITH DOCTRINE
In addition to carefully reading UCC 2-508, please do the same with UCC 1-305 (Purpose of Code Contract Remedies).
- We will start with Problem 63 on page 291 of the casebook. Also, please pay careful attention to the discussion of the Shaken Faith Doctrine on page 291.
- Then we’ll go over Wilson v. Scampoli on pages 291-294 of the casebook.
REJECTION AND ACCEPTANCE IN SINGLE DELIVERY TRANSACTIONS
- Read UCC 2-711(1), 2-508, and 2-601 to 2-605.
- Ramirez v. Autosport and Questions on pages 298-305 of the casebook.
We will also look at Ramirez v. Autosport with regard to the fate of the Ramirez’s trade-in van. Accordingly, please also be prepared to discuss:
ENTRUSTMENT TO A MERCHANT UNDER 2-403(2) AND BIOCOBS UNDER 1-201(b)(9)
- Sections 2-403 (1) and (2) and the first sentence of 1-201(b)(9).
- And use the preceding provisions to explain why the court was correct in recognizing that 2-711(1) did not entitle the Ramirezes to get back their trade-in van from the “innocent” third party who purchased the van from Autosport in late October 1978.
- Regarding F.O.B. “shipment” contracts and the passage of risk of loss, please read 2-319(1)(a), 2-504, 2-509(1)(a), and 2-510(1).
- Regarding F.O.B. “destination” contracts and the passage of risk of loss, please read 2-319)(1)(b), 2-503, 2-509(1)(b), and 2-510(1).
- Subsections (a) and (b) of Problem 64 of the casebook on pages 297-298.
- Carefully review Sections 2-602, 2-603, 2-604, and 2-605.
BUYER’S REJECTION OF GOODS AND RELATED DUTIES UNDER 2-602 THROUGH 2-605
- Do Subsections (c), (d), (e), (f), and (g) of Problem 64 on pages 297-298.
- Carefully read 2-606, 2-607 (including, in particular, its subsection (3)(a)), 2-608, and 2-714. Also, in addition to 2-508, please read 2-515 and its Comment 1.
ACCEPTANCE OF GOODS UNDER 2-606 and 2-607 AND REVOCATION OF ACCEPTANCE UNDER 2-608
- Do Problem 65 on pages 305-306 of the casebook.
- Does 2-508 also afford a seller a right of cure in relation to a Buyer’s Revocation of Acceptance under 2-608? Read 2-608(3)?
How does the court in Wadddell v. L.V.R.V. (see below) address this issue?
- Waddell v. L.V.R.V. Inc. and QUESTIONS on pages 311-314 of the casebook.
- NOTE on Lemon Laws on page 319 of the casebook.
(a) Please be prepared to explain the Waddell court’s subjective/objective approach to ascertaining when a buyer has suffered a substantial impairment of value “to him [or her]” for purposes of 2-608(1).
(b) Also please closely follow the court’s application of the “Shaken Faith Doctrine” (first introduced in relation to our earlier discussion of Problem 63 on page 291.
(c) You should also carefully think through the Questions following the Waddell case.
REVOKING ACCEPTANCE AGAINST MANUFACTURER NOT IN PRIVITY OF CONTRACT
(d) Can a buyer revoke acceptance against a manufacturer with whom the buyer is not in privity of contract?
Review your notes regarding the Elward v. Electrolux case, and carefully read Newmar Corp. v. McCrary, 309 P.3d 1021 (Nev. 2013). (Link posted on TWEN)
LPV RECOVERY UNDER 2-711, 2-712 and 2-713
- PROBLEM 88 (and lead-in discussion) on pages 387-388 of the casebook.
- White and Summers Discussion of UCC 2-714 Damages Recovery Options (posted on TWEN).
In relation to Problem 88, should a Buyer always opt not to conduct an actual cover governed by 2-712 when a higher damages recovery is available under 2-713 in relation to a hypothetical cover? See 2-715(2)(a) and discussion on pages 387-388 of the casebook.
We will then review one of our favorite topics in the course:
2-714 LPV RECOVERY, NOTICE REQUIRED BY 2-607(3)(a), 2-715 RECOVERY of INCIDENTAL AND CONSEQUENTIAL DAMAGES, AND GOOD FAITH NOTICE REQUIRED OF 2-318 THIRD PARTY BENEFICIARIES PER COMMENT 5 TO 2-607
- Problem 39 on page 207 of the casebook.
- Problem 40 pages 211-212 of the casebook.
- Excerpt on 2-607(3)(a) Notice from Connick v. Suzuki (posted on TWEN).
- Problem 41 on page 212 of the casebook. Before doing this problem please review your notes regarding third-party beneficiary recovery under UCC 2-318 from earlier in the semester.
RETURN TO UCC 2-314 IWOM—LIST IN 2-314(2)
- UCC 2-314and its Comments (as well as all your prior notes re UCC 2-314)
- Shaffer v. Victoria Station, Inc. (pages 141-145)
DESIGN DEFECTS AND THE RELATIONSHIP BETWEEN UCC 2-314 AND STRICT TORTS LIABILITY
- Carefully re-review the two TWEN summaries regarding the relationship between Strict Liability in Tort and UCC Warranty Liability.
- Subsections (a), (b) and (d) of Problem 27 (pages 145-146). Please follow the link to the discussion of tobacco-litigation cases posted on TWEN.
- Webster v. Blue Ship Tea Room (pages 146-150). Please carefully describe how Webster can be fit into the framework of a design-defect case.
- Problem 28 (page 150).
EFFECT OF PRODUCT MISUSE ON FORESEEABILITY OF RISK OF INJURY
- The fact pattern in Problem 28 is partially inspired by the classic design-defect caseHoelter v. Mohawk, 365 A.2d 1064 (Conn. 1976), so please read the short excerpt from the court’s ruling in Hoelter v. Mohawk that is posted on TWEN.
- In Problem 28, your casebook author also alludes to another classic design-defect caseLarsen v. GM, 391 F.2d 495 (8th Cir 1968), so please also read the short excerpt from the court’s ruling in Larsen v. GM that is posted on TWEN. Please clearly identify the key differences between the Hoelter and Larsen approaches to design-defect cases.
- We will close our study of design-defect cases by taking take a brief look at the famous McDonald’s “hot coffee” litigation, and how it might be evaluated from aHoelter v. Mohawk versus Larsen v. GM perspective. See https://www.citizen.org/article/legal-myths-the-mcdonalds-hot-coffee-case/
- Many courts read the UCC 2-316(2)and (3) warranty-disclaimer formulas to be subject to the unconscionability framework established by UCC 2-302 . So please read UCC 2-302 and its Comments carefully.
DISCLAIMER OF IWOM AND UNCONSCIONABILITY (UCC 2-302)
There is “Procedural Unconscionability” when a party’s assent cannot fairly be said to be both “KNOWING” AND “VOLUNTARY.” On page 623 of Razor v. Hyundai, 854 N.E.2d 607 (Ill. 2006), Justice Freeman of the Illinois Supreme Court recognizes that a party’s assent isn’t “knowing” when there is a “situation where a term is so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware that he was agreeing to it.”
Later in the opinion the Razor court also recognizes that a party’s assent in essence isn’t “voluntary” when there is an “inequality of bargaining power.” With regard to the voluntariness of assent, pay particular attention to Justice Spears concurrence in Cate v. Dover, 790 S.W.2d at 565 (Tex 1990), in which he observes: “Finally, even if a buyer reads and understands [one sided terms such as ] a warranty disclaimer, chances are he will be without power to ether strike these terms or “shop around” for better ones. If the buyer attempts the former, he will likely run into an employee who is unauthorized to alter the form contract; if he attempts the latter he will likely confront a competitor who offers substantially the same the same form terms.”
- Are all concerns about procedural unconscionability(particularly in consumer transactions) necessarily satisfied by a requirement that language of disclaimer be conspicuous? Clearly explain why or why not in light of the of the UCC 2-302 unconscionability framework.
- Carefully read UCC 2-719 (and comments). What is the relationship between UCC 2-316 and UCC 2-719? See the last sentence of Comment 3 to 2-719. What is the time-line relationship between UCC 2-719 (1) and (2) and UCC 2-302? Carefully read the second paragraph of Comment 1 to 2-719.
UCC 2-719 CONTRACTUAL LIMITATIONS OF REMEDIES AND CONSEQUENTIAL DAMAGES
NOTE: Earlier in the semester we emphasized that a buyer cannot “rightfully reject” or “justifiably revoke acceptance” pursuant to UCC 2-711 so long as the seller has a remaining right of cure. And that in assessing whether seller has a remaining STATUTORY right of cure under UCC 2-508 a court might take into account buyer’s reasonable expectation of receiving a properly functioning good within a reasonable period of time after some reasonable number of repair attempts. This approach essentially mirrors the Illinois Appellate Court’s description of the essential purpose of a sole-remedy repair/replacement provision. Please see the excerpt on “Failure of Essential Purpose” posted on TWEN. If the parties’ contract contains a sole-remedy repair/replacement provision, in essence they have created a CONTRACTUAL right of cure governed by UCC 2-719(1) and (2) that supersedes the UCC 2-508 statutory right of cure. Why might sellers prefer a UCC 2-719 contractual right of cure over a UCC 2-508 statutory right of cure? Might a court be more inclined to extend the “reasonable” period for attempting repairs in cases in which the seller has the benefit of a 2-719(1) term making repair/replacement buyer’s sole remedy?
Please sign up for the TWEN web site I have prepared for the course. I will also prepare a parallel SAKAI web site. Important supplemental course materials will also be posted on the course web sites from time to time.
Technically and metaphysically, our first class on Wednesday, August 17, will count as a Monday class. For this class please review the ground rules set out in the Syllabus and carefully read the key UCC sections set out in Section 2 of the Master Course Assignments Document. As time permits, we will work on Problem 2.1.
During the week of Monday, August 22, and Wednesday August 24, after completing Problem 2.1, we will work through Section 3 of the Master Course Assignments Document.
THANK YOU FOR A WONDERFUL SEMESTER OF LEARNING!!!