homework help!?

Question

Mary Sue entered into an agreement to buy fifty computers from Alice for a total of $70,000. The price did not include $500 in freight and insurance and a $3,000 installation charge. Alice agreed to install the network for Mary Sue. Two days before delivery, Alice phoned and said she would not be able to deliver the computers and that she was going out of business. Mary Sue protested and said she needed the machines, as she had already sold her old network and had started removing it in anticipation of the new machines. Alice apologized but said there was nothing she could do for Mary Sue.

Mary Sue went out and purchased similar computers from Bill for $90,000. He charged her no freight but did add a $5,000 installation fee. In addition, Mary Sue paid Ruth $10,000 for emergency computer service so that Mary Sue could continue operations until the new machines were installed.

Mary Sue now sues Alice for breach of contact. Alice claims she is not liable, as she notified Mary Sue in advance and Mary Sue mitigated her losses with replacement machines. Please discuss the rights of the parties in this matter.

Answer 1

Good God, I'm glad I'm not at school now.

We never had homework like that.

You lost me on the fourth Mary Sue

Answer 2

I say that Alice is definitely in breach of contract with Mary Sue. One question, did Mary Sue pay all of the $70,000 up front or did she make a partial payment. According to contract law, in the agreement signed and approved by both parties, Alice is therefore responsible for providing the products that were purchased by Mary Sue. However, since Mary Sue had not paid for the $3,000 installation charge Alice would not be liable to install the network. The agreement to install was not put into contract.

Answer 3

A minor breach, a partial breach or an immaterial breach, occurs when the non-breaching party is unentitled to an order for performance of its obligations, but only to collect the actual amount of their damages. For example, suppose a homeowner hires a contractor to install new plumbing and insists that the pipes, which will ultimately be sealed behind the walls, are red. The contractor instead uses blue pipes that function just as well. Although the contractor breached the literal terms of the contract, the homeowner can only recover the amount of his damages. Since no damages were inflicted, the homeowner receives nothing.

Answer 4

While lawyers are not renown for their morals, they are not generally lazy. This is a fairly simple case so try to get the brain into gear as you will not have YA when you sit your bar examinations.

Answer 5

In a breach of contract problem, you have to first consider what law applies. Here we are clearly contemplating a commercial transaction of goods; however, it also includes services. Nonetheless, the clear intent of the contract is the computers and the services are ancillary to the delivery of the goods. If the UCC does not strictly control, Alice may have liability for services she still owes.

Therefore Article 2 of the Uniform Commercial Code (UCC ) would apply as the UCC governs commercial sales.

Mary and Alice appear to both be "merchants" within the meaning of the Code, rather than Mary being a plain consumer and Alice being a merchant.

The next step is formation. It appears clear from the fact pattern that Mary and Alice did, in fact, enter into an agreement and that steps were taken towards performance. It is also clear that the contract was capable of being performed but for Alice's decision to go out of business.

It is also clear that there are corresponding promises to undertake legal detriments, forming consideration which underlies the bargain.

However, the problem with the fact pattern is that there is no written agreement between the parties. The UCC at Article 2, Section 2-201 triggers the requirement that any agreement to be performed that exceeds $500 be in writing between the parties. The exceptions are as follows:

1. Merchant's Firm Offer. If one of the traders sends a writing sufficient to satisfy the statute of frauds to the trading partner, the recipient has reason to know of the contents of the sent confirmation and the recipient does not object to the confirmation within 10 days, the confirmation is good to satisfy the statute as to both parties.

2. Admission of the existence of a contract by the defendant under oath at trial or by affirmation in an affidavit or an adoptive admission of some kind. Runs against the party making the admission, but if the admission is never made, runs against the party attempting to enforce it.

3. Part Performance of the contract. The agreement is enforceable UP TO THE AMOUNT ALREADY PAID or FUNDS EXPENDED. Only covers the value of part-performance.

4, The goods were specially manufactured for the purchaser and the seller either (1) began manufacturing them, or (2) entered into a third party contract for their manufacture; and the manufacturer cannot without undue burden sell the goods to another person in the seller's ordinary course of business.
Runs against the purchaser; however, runs against the seller if the seller fails to deliver the goods.

In this case, the computers may have been intended to be specially manufactured but there is no evidence of this, and in fact, the fact pattern suggests that they were fungible with any other computer available in the market place. So without facts supporting the conclusion they were specially manufactured goods, option 4 is out.

There does not appear to be any writing from one party to the other regarding this transaction. So option 1 would be out because there is no firm offer or other memoranda covering the transaction.

There is no admission in writing or under oath. So this option is out.

The only option as far as proof of the formation of a definite contract with a quantitative term is the oral agreement between the parties and part performance on one or both sides of the agreement.

To the extent that both parties have engaged in part performance, an agreement is formed, but the only potential recovery under the UCC is the value of the part performance.

Alice does not appear to have expended anything under the fact pattern. There is no evidence that she ordered the computers, or if she did, she cancelled them and suffered no loss.

The fact that Alice entered into an agreement to install the computers (a services agreement) survives as an oral contract to render services, however, which falls outside of the UCC. So to the extent that general contract principles might apply, Alice did promise to do the installation for $3,000.00. Under the "Common Law" English Statute of Frauds, any oral contract that was capable of being performed within the span of a year, was enforceable in the courts.

So there is a valid oral conract for services, and there is a valid UCC contract for goods to the extent that there is part performance rendered on either or both sides.

Conditions. There appear to be no specific conditions under either the contract for the goods, or of the services to be rendered in connection with the installation of the goods. The conditions would therefore be concurrent. That is payment due when goods are delivered, and when services are rendered.

Performance. The contracts clearly contemplated performance on both sides of the transaction. 50 computers for $70,000 and then separate installation services for $3,000. Alice merely needed to deliver the goods and install the computers and Mary would owe the money for both the goods and then the services.

Breach. The breach was anticipatory. That is, Alice advised Mary that she would not be delivering the computers or performing the installation. Therefore the breach occurred before delivery or installation. Mary had the right to urge performance (which she did, but did not do in writing), or merely has the right to sue for damages for non-performance. The breach is the failure in performance of these contracts.

Damages. This is the tricky part:

A. UCC/Computers: Damages would have to equate to part performance already rendered by Mary. In this case she suffered $10,000 in losses for emergency computer services so that she could continue operations until the new machines ordered from Bill arrived and Bill's later installation services.

This is one of those cases where "consequential" damages are apparant. That is, the issue turns on whether or not it is reasonably to be expected that a breach by Alice would naturally and anticpatorily cause Mary to suffer these damages?

I think the answer would be "no" under Hadley v. Baxendale, 9 Ex. 341, 156 Eng. Rep. 145 (1857). Unless the parties contemplated, as a part of their bargain, that Mary would dismantle and sell her old computer system and network in anticipation of Alice's delivery, and without a firm and fixed date in writing by Alice, and without any facts showing that "time is of the essence" in this contract, I think that the parties did not anticipate this consequence when the traders made their bargain.

Therefore, the $10,000 paid to Ruth for emergency computer services, though consequential to the breach, were neither anticipated in the fact pattern, nor was there any "time of the essence clause" in writing which would anticipate loss of ability to continue business operations. Moreover, there is no evidence that this $10,000 was "part performance" which would put it within the UCC so that Mary could recover her losses for actual money paid in part performance.

The $20,000 difference in the cost of the computers. Since Mary's recovery is limited only to the amount of money she spent towards part-performance (and there is no evidence there is a deposit anywhere) and no fact which points to Mary expending any money, other than a promise to pay. Though Mary's consideration was valid, since there was no delivery and no services, Mary's performance is excused but she can't recover what she did not pay.

Installation services. The oral contract to install the computers is enforceable. Here Mary had to pay $5,000 to Bill to install similar computers rather than pay $3,000 to Alice. Here Mary can recover the $2,000.00 difference in cost of services.

Damages. One cannot win a breach of contract claim without damages. No damages equals dismissal or directed verdict. So Mary gets no damages on the UCC contract for the goods since the facts show she paid nothing and expended nothing in part performance of the contract with Alice for the 50 computers.

Mary does recover $2,000.00 in damages for the additional installation costs. Mary is entitled to recover the benefit of her bargain with Alice. So the $2,000.00 makes Mary whole on the oral promise to install 50 computers.

Conclusion. Mary cannot demonstrate damages for the UCC sale of goods claim. Mary can demonstrate damages of $2,000 for the breach of the services contract.

There you go. Not bad for a quick answer. Eh?

Answer 6

and why are you not doing this yourself

is this the new generation/ think they can go onto the computer and ask someone to do there homework for them whilst they go out vandalising ,drinking and mugging people