(a) resolve the issue raised in the question,
(b) explain your reasoning in reaching your conclusion, and
(c) have adequate support and justification to validate your reasoning.
In preparing your answers you are allowed to use your book, your notes, and the Internet. (If you use material from any source you must provide proper citationsto the source
Do not use Wikipedia
Southern Life, a regional magazine contacted Paul “Snap” Schotz, a professional photographer, asking him to submit some photos for possible inclusion in an upcoming issue of the magazine. Paul shipped 45 transparencies of some photos he had taken to Southern Life. The transparencies were sent via National Van Lines per the magazine’s instructions. The transparencies were lost while in transit. National admitted it had somehow lost or misplaced the package and offered to pay Paul $250, the amount stated in the contract for a lost package. Paul did not insure the package for a greater value, which he could have done for a small additional fee, nor did he inform National of the amount he believed the package was worth. Paul declined the settlement offer from National.
Paul then filed suit against Southern Life for $45,000, the value that he personally placed on the transparencies. According to Paul, this was a sales contract governed by Article 2 of the UCC, and the carriage by National Van Lines was a shipment contract, placing risk of loss on Southern Life upon Paul’s surrender of possession to the shipping company.
Southern Life denied liability. It argued that Paul’s failure to acquire insurance put the risk of loss for anything beyond the $250 provided for in the carriage contract on him. It also questioned the basis for Paul’s assertion that the transparencies were worth $45,000. It further argued that this was not the sale of goods since Southern Life was only considering the photos for possible inclusion in a future edition. It had made no commitment to use any of the photos, so there had been no sale of goods.
Required: Address the following issues in your reply:
a) Was this a sale of goods governed by Article 2 of the UCC? Explain.
b) Should Article 2 apply by analogy even if this was not a sale of goods? Explain.
Justin Case and his friend Paige Turner were sitting on Justin’s porch enjoying a pleasant summer evening. Because there were a lot of mosquitos around, they were burning a citronella candle. Justin had purchased the candle from The Olde Radford Candle Company (ORCC) a few weeks prior to the evening in question. The candle itself was made of paraffin and wax with a citronella scent in a metal bucket-shaped container. There was a label attached to the bottom of the container warning against trying to extinguish the candle with water. It stated that doing so might cause the candle to explode. Justin claimed never to have read the warning label, nor to have been warned of the danger by the clerk at the store.
At the end of the evening Justin tried to blow out the candle, but it did not extinguish. He then poured some water on the candle, causing it to begin to “snap and pop,” and the flame leaped higher. Justin then got up to look for something he could use to smother the candle. Before he could take any other actions, the candle exploded, spewing flames, hot wax, and paraffin over Paige’s lower body. As a result, Paige suffered severe burns over more than 15% of her body. She was unable to work while she was recovering from the burns. She also incurred substantial medical and hospital bills.
Paige filed suit against Olde Radford Candle Company to recover for her injuries and expenses, alleging breach of the warranty of merchantability, product liability, and negligence. The company denied any liability, arguing that (a) Justin had ignored the warning on the container and (b) had failed to use the candle properly as per the instruction on the label. IT also argued that any warranties in this sale were to Justin, the buyer, and that it has no duty to Paige, with whom it had not dealt. It argued that these facts combined to relieve it of any liability.
Required: How should the court rule in this case? Be certain that you explain and justify your answer.
Allie Katz owned a pet supply store in Radford, Virginia. She recently sent a purchase order to one of her regular suppliers in Johnson City, Tennessee, placing an order for a variety of cat food and toys from the “Purr-Fect Kitty” company. In the purchase order Ms. Katz specified that the goods should be shipped to her address in Radford via common carrier, FOB Johnson City. She also asked that payment be due 60 days after receipt of the order, and that any controversies should be settled by arbitration in Radford.
“Purr-Fect Kitty” was delighted to receive the order (Allie Katz was one of its best customers), but the company had a new manager who had not dealt with Ms. Katz prior to this order. He replied to her purchase order with an acknowledgement form containing the following information: the order had been received and the ordered items would be shipped to Ms. Katz within the next two business days, with delivery to be made by a local carrier, shipment to be FOB Radford; payment would be due 60 days after receipt, with a 2% discount in payment was remitted within 10 days; any arbitration hearing would be conducted under the guidelines and standards of the American Arbitration Association; insurance on the shipment at would be provided, with the cost included in the invoice to be paid by Ms. Katz.
Required: Given these facts, and based only on these facts, answer the following two questions:
(1) Do the parties have a contract? Explain and justify you answer.
(2) Without regard to your answer to part (2), assuming there is a contract, what are its terms? Explain and justify you answer.