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Analyze the application of common law of contracts and UCC Article 2 as they relate to whether a contract was formed.


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Scenario 1

Food Fair recently developed an online ordering service for home delivery within a 10-mile radius of each of its stores. To use the service, Food Fair requires customers to agree to terms and conditions described on the website when first entering an online order. The terms and conditions specify that that advertised sales prices do not apply to online purchases, and that orders are limited to inventory on hand at the nearest store to the purchaser. Ernie saw a Food Fair newspaper advertisement for frozen burger patties at a reduced price. He uses the patties in his catering business. Ernie attempted to make an online purchase of all the remaining patties at the store nearest to him. The store advised him that it was sold out; however, he was told that there were 10 cases available at other stores in town and that there were 12 cases in inventory at the regional warehouse. Ernie requested that the store obtain the patties from the warehouse. Food Fair refused, citing the online terms and conditions. Ernie sued, claiming the terms and conditions were not effective and that he should be able to obtain patties at the sales price from all stores in town, as well as those available at Food Fair’s warehouse; or he should receive damages equal to the amount of money he would have made from selling the burger patties in his business.

Discuss the following issues:

·Is there a contract? If so, what are its terms?

·Analyze the application of common law of contracts and UCC Article 2 as they relate to whether a contract was formed.

·Who will win the lawsuit and what, if any, will be the winning party’s damages?

·Discuss the contractual issues in this scenario that are unique to e-commerce?

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Scenario 2

Carol’s hobby was collecting American quilts. Her collection was large and consisted of many rare items. One day, while visiting with Ruth, a fellow collector, Carol said, “When I retire in a two years, I am going to sell my collection to you.” Ruth said she looked forward to the day when she could buy the collection. Ruth then spent a year and a great deal of money building a room in her house to display the collection. When Ruth told Carol that she was building the room, Carol said nothing. Carol also knew that Ruth had borrowed money to build the room. When Carol retired, she sold her collection to someone else. Ruth sued Carol claiming breach of contract.

·Are there any legal theories under which Ruth could prevail?

·Discuss the outcome of this lawsuit.

·Discuss the remedies available to Ruth if she wins the lawsuit.

·How would her damages be calculated?

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