Reference no: EM133425194
Case Study: Facts: You own Sunshine Produce. You supply local restaurants with produce such as lettuce, tomatoes, onions, etc. You sell to approximately 40 restaurants in the Gainesville, Georgia area. Orders are placed to your business by the restaurants usually on the evening before the day of delivery. Freshness is important.
Your supplier has been Produce and More out of San Diego, California. They ship the produce to you via a carrier called Acme shipping. You have negotiated with them to supply you with all your produce needs. All of your negotiations with Produce and More have transpired by email.
Questions posed:
What are the elements of a valid contract?
State what you would put into your contract with Produce and More to fulfill these elements.
What facts make this difficult and how so?
What is risk of loss? How would you deal with it in this contact?
Does the UCC (Article 2) apply to this contract? Why or why not?
In making sure that you have a valid contract, do you need to actually draft a document or can the emails form a valid contract?
Additional Facts: You have now been working with Produce and More for three months, without any problems. You get a call from Produce and More that your recent order could not be filled because of a drought causing a shortage. They informed you that they would, of course, not bill you and would be able to make the next delivery as they had arranged to import the produce. This order was to have been delivered the day after you got notice from Produce and More. You called around to find someone who could replace what you needed. You found replacements for about ½ of your needs. However, you had to pay about 30% more for those items. You notified your customers. You were then contacted by several of your customers who said that they lost considerable business because they were unable to serve their customers. They are asking you to pay them for their losses.
Questions posed:
- What contract issues are raised by these new facts?
- What would be your defenses if your customers sue you for their lost profits?
- Could you sue Produce and More? If so, under what legal grounds? If not, why not?
- Assuming you could make out a legal claim against Produce and More, could you get damages for your customer's losses? Would your measure of damages include the additional amount you had to pay for the produce you got from another supplier?
- What defenses could Produce and More raise?
- Assuming you were sued by your customers and lost, what would the measure of damages be that the court would apply? Would the damages be categorized as liquidated or unliquidated?