Seller's Remedies Worksheet
Prof. Bill Long 4/7/05
We will work on this sheet in class today for several minutes. I give it here if you want to get a "head start" on it. As you know, these are the kinds of problem I might be inclined to give on a final....
1. B goes into a gallery in early March to purchase a unique painting for $1,700 from S. On March 15, before delivery, B writes a note to S saying that she no longer "agrees to take the painting." On the strength of this representation, S decides to resell the painting but is only able to get $1,200 for it in resale to the neigboring art gallery, when she casually mentions that she was stiffed by B. S then sues B for the $500 difference. Does Article 2 provide an automatic or "slam dunk" verdict for S in this amount? If not, what might you need to know to see if S should get this amount?
1b. Instead of selling it to the neighboring gallery, S decides to put it up for auction in April. She gets $1150 for the painting. She then wants to sue B for $550. What must she do to make sure that this cause of action won't be dismissed by a court? Let's say, in addition, that in auctioning the painting S actually committed herself to paying a $50 shipping charge to the winner of the auction, which she would not have had to pay for B, who was planning to pick up the painting. But, she "saved" $90 in the auction for a frame, because she sold the painting unframed, while her contract with B was for a framed painting. Under these facts, what recovery might she expect against B?
c. Let us assume that S was able to resell the painting at the auction for $1,800. Does B have a cause of action against S for $100? What about if he reconsiders his letter of March 15 and wants to buy the painting now. Can he bring an action for specific performance under 2-716 to purchase the painting for $1,700?
2. B goes to S to order a unique emerald-green suit. B picks out the material, signs a contract for $1,000 for the suit, which has to be tailored by S, and leaves. Later that day B calls S telling him that the deal is off. S hasn't begun work on the project, but has set his heart on it and has even committed himself to a $1,000 vacation in the meantime. Does S have an action for the price against B?
2b. Changing the facts, let's suppose that B doesn't call it off immediately, but lets S work on it for a while. S calls and tells B that the suit is ready for a "try on," though it is customary in the business that significant alternations are still necessary after the "try on." B comes in, takes one look at the suit and says, "Do you think I am in the Land of Oz? I don't want that thing." Can S sue B for the price? What should S do with the partially completed suit in the meantime? If S receives some kind of judgment against B, what becomes of the suit?
3. S deals in fish and is in Salem, OR. B purchases fish in Boise. S enters into a contract with B on August 1 to sell a large quantity of salmon to B for a price of "$2 per pound FOB Boise" [Recall that 2-319 is the FOB article]. Delivery is to be made by August 21, with payment to follow. On August 4, the shipping day, B contacts S and repudiates. Here are additional facts that might be relevant:
Mkt price of salmon at Boise on August 1--$2.04/lb.
Mkt price of salmon at Salem on August 1-$1.54/lb.
Mkt price of salmon at Boise on Aug 4--$1.92/lb.
Mkt price of salmon at Salem on Aug 4--$1.40/lb.
Mkt price of salmon at Boise on Aug 21--$1.14/lb.
Mkt price of salmon at Salem on Aug 21--$1.00/lb.
Cost of shipping from S to B $.05/ lb.
a. If S sues B claiming damages under 2-708(1), what is the recovery?
b. What would be the result if the contract price on August 1 had instead been "$1.98/lb. FOB Salem"?
c. Assume that the price was "$2/lb. FOB Boise" and B did not repudiate on August 4 but rejected the shipment when it arrived in Boise on August 21. To what would S be entitled under 2-708(1)?
d. Assuming price in c., suppose B could demonstrate that when S heard that B repudiated, S had been able to arrange the sale of the shipped salmon to another buyer, C. C bought the salmon on August 21 at $1.30 per pound, though S had to incur an additional "agency fee" of $.03/lb in making the contract. What are the various theories regarding S's damages now? What damages do you think a court would award?
4. S wants to sell his used computer for $400. B offers $350 in writing and S accepts in writing, with pickup and payment to be the next week. B calls next week to say he can't raise the money. S puts an ad on a local laundromat bulletin board to sell it for $400, but only is able to sell it eventually to C for $350. If S sells it for that amount, what rights does he have against B?
4b. Meanwhile S is looking to purchase his own new computer. He goes to Computer World ("CW") and purchases a Super Pro 1000 for $5,000. CW has to order the computer, and when it arrives, they label it "S" and notify S to come and pick it up. S, however, repudiates and decides he wants the Super Pro 2000, which had come out in the meantime, for $6,000, which he also orders through CW. CW is incensed that S has rejected the model that was set aside for him and decides to sue S. Assuming that CW has access to an unlimited supply of Super Pro 1000s, where would you look for in Article 2 for CW's damages? Let's assume, further, that CW paid its supplier $3,200 for the Super Pro 1000. We also know, however, that CW's profits, when you account for overhead, comes out to 10% of its sales. To what measure of damages would you say CW is entitled?
4c. Would your answer to b. change if you knew that the Super Pro 1000 was a very popular model and that the manufacturer could not keep up with demand, but has to allocate only 100 of the computers, which quickly sell out, to each of the CW franchises?
Copyright © 2004-2007 William R. Long