Bentley is a manager at a high-end printing company called Graphic Communications Inc. (GCI). GCI designs and produces posters and other materials for advertising purposes for a variety of cl... ients, including a local symphony orchestra and Main Street University. After GCI received a large order from the university that required a special press, Bentley was assigned to locate a suitable press, negotiate the purchase terms, and arrange for delivery no later than July 1. Bentley negotiated a price with Armstrong Press Manufacturing for the Armstrong Model 2000 printing press. The press was sufficiently large as to require that it be delivered in three separate pieces, and then assembled on-site. One factor in choosing Armstrong as a vendor was that GCI had used Armstrong before for purchases of smaller presses and had been satisfied with their products and services. In those previous transactions, GCI had used their own standard preprinted purchase order and no disputes developed. Once the parties agreed on the price, Bentley issued a preprinted purchase order. The purchase order was one page long and had very few terms. It contained only the price, description of the press, the date of the purchase order, a provision that agreed that all three pieces of the press would be delivered and operational by July 1, and Bentley’s signature. After Armstrong received the purchase order, Armstrong’s manager handwrote the phrase “Acknowledged as a destination contract. To be delivered and assembled in three installments to GCI over May” in the delivery section of the purchase order. Armstrong’s the manager then signed the purchase order, faxed the purchase order back to Bentley, and began to process the order. Armstrong shipped the first part of the press using its delivery service. Before delivery, the the truck was involved in an accident and the first part of the press was destroyed. 1. Is Armstrong's addition of the delivery term binding on GCI? Explain the UCC analysis governing the additional terms added by Armstrong. 2. Does the fact that the parties had a history of past dealings with each other impact your analysis in Question 1 above? Why or why not? 3. When did the title to the goods pass in this contract? Who has the risk of loss? How is your answer related to your analysis of Question 1 above? [Show More]

By CPA Guru 9 months ago

Answers to the above Question

Please Note. I only answered Question C When did the title of the goods pass in this contract? After Main Street University (the remote buyer) and Bentley (the immediate buyer) agreed to the price and a purchase order printed. The title of the goods passed immediately Armstrong Press Manufacturing Manager signed the purchase order and faxed back to Bentley. According to (UCC sect. 2-213) the receipt of a fax has legal effect, and it will have to be affected even if no individual is aware of the script. Who has the risk of loss? Since the first part of the press was shifted to Armstrong Press Manufacturing own delivery service. And the truck used was involved in an accident. According to (UCC sect.2-322) Since the press was delivered by an “ex-ship” under such terms, the risk of loss is not passed to Main Street University until the press leaves the truck, and the property is unloaded. Therefore, Armstrong Press Manufacturing Press Manufacturing bears the risk How is the answer above related to question one? Armstrong Press Manufacturing delivery of press using its delivery service is bidding to GCI. This contract is binding because a GCI was faxed, even though, the company was not aware that Armstrong Press Manufacturing has accepted the order (UCC sect.2-213). It is also acceptable to deliver goods using any other vessel if it is not restricted (UCCsect.2-322). But this does not imply that GCI should bear the loss since the truck was involved in an accident before the press was unloaded (UCC sect.2-322).   References

By CPA Guru 9 months ago . . .   helpful (90)    Marked as unhelpful (71)


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