Bill owns “Bills Widgets, Inc.” (“BWI”), a corporation located at 789 North Street, Podunk, Iowa. His company manufactures and distributes widgets. James owns a hardware store at 321 South Street, Sunnyside, Michigan, that sells widgets. He wants to buy 20,000 widgets from BWI. After James consults with Bill, the parties agree to a price of $5 per widget.
These are the provisions that James wanted in the contract:
1) James will pay 10% of the purchase price initially and he will pay the remainder after the goods are received.
2) James must have all 20,000 widgets in stock before the summer starts, so the goods must ship prior to July 1.
3) The widgets should be shipped to his place of business. James will pay the cost of the shipment.
4) If there is a dispute under the contract, it will be submitted to arbitration.
5) Michigan law, and not Iowa law, applies to all disputes under the contract.
The final contract, drafted by Bill’s lawyer, has the following provisions:
James must pay 50% of the purchase price upon execution of the contract, and the remainder upon receipt of the goods.
Bill acknowledges James’ need to receive all the widgets before the summer starts, but since this is Bill’s busy season, shipment after July 15 shall not constitute a breach.
James will pay the cost of shipping to his place of business.
Any dispute under the contract shall be submitted to arbitration.
The laws of Iowa shall govern this contract and any disputes hereunder.
James was in a big hurry when he met with Bill to sign the contract. He checked the names, address and confirmed the widgets would be shipped to his store. He signed the contract without reading further.
Widgets turned out to be the hottest item that spring, and Bill could hardly keep up production to fill his orders. He finally shipped James’ order on July 27, and he did not receive the widgets until August 5. By then, most of his customers had purchased their widgets from other retailers, causing James to suffer significant losses. James sues Bill for breach of contract in federal court for the District of Michigan.
What are the strengths and weaknesses of James’ case? What defenses can Bill raise? An IRAC style essay is NOT required, but a thorough discussion of the issues is necessary.
The postappeared first on .