Scenario
Careful Seller, Inc. sold to Manufacturer and Buyer, Inc. many parts over the years. They had very few disputes. Each time the dispute was settled under the commercial code of the buyer’s state. The commercial code sales article in that state duplicates the Uniform Commercial Code.
Careful Seller, Inc. has fallen on hard times financially. Like many small companies, they do not keep a large cash reserve, and some buyers have not been paying fast enough. Ann Daniels, who owns the company and manages it, has asked the small law firm that employs you to advise her on seller’s remedies to use.
The buyer and seller have a master contract that is complete and enforceable. It applies to this situation.
20 customized parts have been ordered from Careful Seller, Inc. by Buyer Manufacturer, Inc. The price is $1,000 per part. They are customized with painted advertising for the Buyer’s needs. 20 parts have been shipped to the Buyer. 10 have been rejected and 10 accepted. The buyer has not paid for any of the parts. The buyer held all the parts for ten days and then returned the 10 rejected parts with a message that said they were too large for use and said that the buyer intended to use the acceptable ones and obtain cover for the other 10 parts from a different company.
Ann Daniels, on behalf of Careful Seller, Inc. replied by email that she insisted on immediate payment for the 10 parts they kept and that she would cure the shipment by sending 10 replacements within ten days. Careful Seller produced 10 more parts, all conforming, but they were also rejected, due to Manufacturer and Buyer buying ten parts from another company. The buyer has paid nothing.
Instructions
By submitting your assignment to this drop box you agree to abide by the Academic Misconduct Policy set forth in the course syllabus. You acknowledge that your failure to do so could result in being expelled from the course.
The Master Contract will be used to complete portions b and c of the assignment.
Part of the Master Contract
Each order for parts shall be governed by this contract.
Customized parts orders shall be paid for in full either prior to delivery or within ten days after the first partial delivery of goods.
Cure and cover when defective parts are delivered.
Seller has the full right to cure any defect in parts within ten days of notification of the defect to the Seller, and the return of the defective parts. If the seller does not cure within ten days, the buyer may obtain cover parts from any other source. This paragraph is not intended to add to or change a UCC remedy, other than to give time limits.
Complete the following related to the scenario:
Define cover and cure in your own words, in the context of this contract. Cite a section of the law you are paraphrasing.
Complete the italicized portions of the partially completed IRAC table. Use the scenario, UCC, and the contract to complete the table.
Sample Solution
