Reference no: EM132263724
Discussion 1
From what I am understanding the terms of the contract between Campbell Soup and the Wentzes were as follows:
Wentzes would sell all red-cored carrots grown on their farm in the 1947 season solely to Campbell Soup for a price of $30 per ton.
The contract prohibited the Wentzes to sell their carrots to anyone else except those that were rejected by Campbell Soup.
If the seller breached the contract, they were liable for $50 per ton
Campbell Soup reserved the right to delegate who could buy the rejected carrots
I am going to go out on a limb here and say that no, Wentzes did not perform under contract. The original contract stated that Wentzes needed to sell all over their carrots to Cambell Soup, not delegate another company to sell them (who still did not sell Campbells the entire amount).
Our text tells us that specific performance is "not a monetary award, but rather an order by the court compelling the breaching party to actually honor the terms of his contract by rendering the promised performance," (Raogers, 2012). So, no, the courts did not find that as a remedy because they did not require Wentzes to stop selling the carrots elsewhere.
The court refused to help Campbell Soup because they found the contract to not only be one-sided (in the strict benefit of Campbell Soup) but found it to be unconscionable or unreasonable and found that the court could not reasonable assist.
I think one main way that Campbell Soup could change the contract is to specify that delegation of the task or re-assignment of the task is not allowed, that the product must come directly from the farm in question for the agreed upon price. Campbell Soup also needs to make the contract more reasonable.
For example, if the seller must sell solely to them, Campbell Soup must give some leeway in where the rejected product goes. It should be strictly up to the seller what they are going to do with the rejected product.
Rogers, S. (2012). Essentials of Business Law [Electronic version].
Discussion 2
What were the terms of the contract between Campbell and the Wentzes?
The Wentzes were to hand over all of their Chatenay red cored carrots that were grown o their farm that season to Campbell fro $30 a ton.
The Wentzes could only sell their carrots to others only if Campbell said they could and if Campbell rejected/refused to buy them from the Wentzes.
Liquidated damages provision of $50 per ton if the seller breached, but no familiar provision in the event that Campbell breach.
Did the Wentzes perform under the contract?
No! Even though the fair market value was more than what Campbell was willing to pay the Wentzes and they were losing money, they still broke the contract. "The Wentzes harvested 100 tons od carrots and refused to deliver tem to Campbell and sold 62 tons of their carrots to a farmer who then sold some of those carrots to Campbell." (Rogers,2012)
Did the court find specific performance to be an adequate legal remedy in this case?
No! The contract was so unfair and one-sided. You can refuse to buy any product, but you can not deny a person from selling their own product elsewhere. Our text states that,"specific performance is not a monetary award, but rather an order by the court compelling the breaching party to actually honor the terms of his contract by rendering the promised performance," (Raogers, 2012).
Why did the court refuse to help Campbell in enforcing its legal contract?
The contract was unfair and the court found the legal contract to be one-sided and unconscionable.
How could Campbell change its contract in the future so as to avoid the unconsionability problem?
The first change is to offer a fair market price for the product. At the farmers discretion, Campbell should allow any rejected product to be sold elsewhere. They should also include punitive damages if Campbell Soup Company didn't hold up on its end of the deal.
References:
Rogers, S. (2012). Essentials of Business Law [Electronic version].
Discussion 3
Under UCC 2-302, who has the best chance of getting out of the contract due to unconsionability?
I think that Breanna ( the single mother) has the best chance of getting out of the contract. Due to her being a single mother with poor credit, the cost, fees and interest are too much for her to fulfill the contract.
The symbol for justice features a woman wearing a blindfold illustrating that the law should be applied the same way regardless of who the parties are. Does the UCC rule seem to contradict this? Which approach do you think is more ethical?
I do believe that the law should be applied the same way regardless of who the parties are. But I do not feel that the UCC rule contradict the symbol of justice. Our text states that "When parties are in disagreement and cannot come up with a conclusion, The UCC gives the parties a great deal of flexibility to decide on the terms of their bargain." Rogers, (2012). In this situation Breanna does not have enough funds and are unable to pay, and at the same time is being overcharged but is still expected to pay.
Note that both Glamour and Shady Rest are businesses, and courts rarely find that contracts between two businesses are unconscionable. The rationale is that a business is a sophisticated entity, familiar with transactions and able to protect itself. Do you think Glamour and Shady Rest are in a comparable position in regard to this contract? Why or why not?
Shady Rest and Glamour are not in a comparable position on regard to this contract. I feel that one (Shady Rest) purchased the product out of responsibility.
Their purchase was made based on the health of their patients. I feel it was a haste decision made to protect and keep their patients safe. On the other hand, I feel(Glamour) purchase and decision was not so haste and that their purchase was a convenience. I know that they want their employee and customers to be safe but I just feel the health of the patients were more of a risk and needed to be done as soon as possible. Besides they bring me way more money than Shady Rest and would be more able to pay.
References:
Rogers, S. (2012). Essentials of Business Law [Electronic version].
Discussion 4
Under UCC 2-302, who has the best chance of getting out of the contract due to unconsionability?
All can technically claim unconciousbility, Ace Heating and Cooling and heating is certainly overcharging on the price of the unit. I do feel Breanna is the one that actually has the long term contract and she is being taking advantage under the terms of the contract. The other three are aware that they are being gouged and they have accepted the terms. Breanna has been enforced into the contract under duress.
The symbol for justice features a woman wearing a blindfold illustrating that the law should be applied the same way regardless of who the parties are. Does the UCC rule seem to contradict this? Which approach do you think is more ethical?
Although the symbol for justice features a woman wearing a blindfold illustrating that the law should be applied the same way regardless of who the parties are. However, in reality this is not how it works. People are taken advantage of all the time. However, in regards to the UCC rule it does not seem to contradict this because the UCC rule concerning this case does not aid Ace Heating and Cooling in participating in price gauging. In my opinion Breanna can breach the contract due to it being an unreasonable contract.
Note that both Glamour and Shady Rest are businesses, and courts rarely find that contracts between two businesses are unconscionable. The rationale is that a business is a sophisticated entity, familiar with transactions and able to protect itself. Do you think Glamour and Shady Rest are in a comparable position in regard to this contract? Why or why not?
It is expected that businesses have more experience with contracts and know how to take protective steps. Shady Rest is in a similar situation as Breanna, since they have people they have to care for as well as she does for her child. Shady rest is a profit business and they are expected to be able to provide air conditioning during extreme heat, this is an expectation.
When you are a business it is expected that you will do what needs to be done to meet the needs of your clients. If something breaks you are expected to be able to fix it to keep your establishment running well. Glamour on the other hand is a business as well, they just got caught in a bad situation. When you run businesses you are expected to be able to repair what breaks down since you make profit from your business.