February 25, 2017

Homework Help: Business Law

Posted by Cho Ramirez on Sunday, June 17, 2012 at 1:34pm.

Grocery, Inc. has a written contract with Cereal, Inc. to purchase 20 cases of cereal per month at $22 per case. The contract does not state the types of cereal or how the 20 cases will be divided among Grocery, Inc.’s 20 stores in Any State. After a flood, Cereal, Inc. suffers severe water damage in its warehouse. With the exception of Soggy Flakes, Cereal, Inc. does not have enough undamaged cereal to comply with its Grocery, Inc. contract. On the day delivery was due, Grocery, Inc. receives 10 cases of Soggy Flakes at the three stores located in My Town and two stores in Your Town. Twelve days before delivery was due, Grocery, Inc. had requested, by facsimile, that 15 cases containing a variety of cereals be delivered to the 5 stores listed above with the remaining 5 cases going to Grocery, Inc.’s warehouse in Corp Town. Grocery, Inc. wants to reject the shipments of Soggy Flakes and cancel its contract with Cereal, Inc. Discuss Grocery, Inc.’s rights under contract law. Cereal, Inc. argues that, based on the gap-filling rule, it had the right to modify the terms of the contract.
Analyze the gap filling provisions of UCC Article 2 as they pertain to the terms of this contract. What rights or defenses, if any, does Cereal, Inc. have under contract law? Analyze the remedies available to Grocery, Inc. and Cereal, Inc. Explain all answers in detail.

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