III. A. Reed, a manufacturer, entered into an oral contract with Rocco, a retail
ID: 435848 • Letter: I
Question
III. A. Reed, a manufacturer, entered into an oral contract with Rocco, a retailer, to deliver 10 leather jackets to Rocco’s place of business within 15 days. The total sales price was $450. Prior to the delivery of the jackets, the market price of leather increased drastically. Reed knew Rocco needed the jackets within the 15 days and telephoned Rocco stating that he would be unable to deliver the jackets unless the sales price was increased by $150. Rocco agreed to the new price. The following morning Reed sent Rocco a signed letter indicating the new sales price and that the sale was for 10 leather jackets. Rocco received the letter the next day and has taken no further action.
B. Reed entered into an oral contract to purchase Smith’s truck for $50,000, giving $10,000 as a deposit. The parties intended to reduce their agreement to writing at a later date.
C. Reed also entered into an oral contract to purchase 100 bolts of leather at $500.00 per bolt and gave the seller a down payment of $10,000.
Required: Answer the following, setting forth reasons for any conclusions stated.
III A. Discuss whether the original sales contract and the subsequent change in price are enforceable under the UCC.
III B. Discuss whether the oral contract to purchase Smith’s truck is enforceable.
III C. Discuss to what extent the oral contract for the bolts of leather is enforceable.
III D. Assuming each contract is enforceable, discuss Reed’s damages if the other parties breach.
Explanation / Answer
Subsequent changes in the prices are enforceable under UCC as long as both of the parties agree on the situation and provides an oral or any written contract. If the previous contract is overriding buy the new contract and new conditions are agreed by both the parties, changes in the prices are enforceable.
Yes this contract is also enforceable as any kind of contract if it is written or oral is enforceable , in this is specific condition confirmation of the deal or contract is also provided as $10,000 were also paid as deposit of confirmation for the deal.
If the seller does not provide 100 bolts of leather to Reed then the contract is definitely enforceable but there is no specific time limit in the contract. As the down payment is already given for the specific contract, determination of delivery time should also be done in written or oral contract by read for the enforcement of the contract as other party can directly avoid being liable as there is no specific date or time is available for the delivery.
Is the contract is damaged at the first scenario then the specific party is liable for paying up to $50000 to the first party in condition of the breach of contract in the specific scenario.
Same would happen with the other contract as well as availability of 100 bolts would be impossible with the prices of $50000.