Contracts/UCC

Question 1

UCC - Discharge of Duty - Mercantile Terms

Answer 1

FOB Place of Shipment = Buyer has expense/risk once seller puts goods in possession of carrier.

FOB Place of Destination = Seller pays expense of transport + bears risk of loss to point of destination. Reasonble notice + Tender of delivery required.

Manufacturer was the seller. Company was the buyer. FOB company production facility is destination. Thus, manufacturer, as seller bears the risk.

Question 2

UCC - Discharge of Duty - Risk of Loss - Shipment Contract

Answer 2

If delivery to a specific location is not required, risk of loss passes to buyer when seller delivers to carrier.

Here the contract did not specify place of tender. Thus, the risk of loss passes to the buyer when the seller delivers to the carrier.

Question 3

Contracts - Acceptance - Mailbox Rule - Exceptions

Answer 3

1. Option Contracts: Mailbox rule doesn’t apply in case of exercising an option. In that the promise exercising the option must be received by the offeror for the option to be exercised.
2. Unilateral Contracts
3. Where offeror rules out i.e acceptance only effective upon receipt.

Here, said “acceptance must be received on or before that date.” Therefore mailbox rule doesn’t apply. Thus, the term controls and since acceptance received after date, no k.

Question 4

UCC - Acceptance - Offer for Prompt Shipment

Answer 4

An ambiguous order to buy goods for prompt or current shipment is construed as inviting acceptance by either a prompt promise to ship or by the act of shipment

Here, shipment sent before acknowledgement form - created a contract.

Question 5

Formation - Acceptance - Mailbox Rule

Answer 5

Acceptance - Rejection = K unless rejection received first and offeror detrimentally relied on rejection

Rejection - Acceptance - Look to see what comes first. If rejection, no k. If acceptance, k.