March 9, 1999

Review Burnham exercises in preparation for guest speaker that will be here on Thursday

Williams v. Walker Thomas Furniture Co

Case refers to it as a lease - is not really a lease - should be called a sale with a security interest - store is entitled to repossess if payments are not made.

Analyzation of unconscionability

2 steps:

1. procedural - process of consent

1. duress
2. mistake
3. mistake
4. lack of capacity
5. inequality of bargaining power
6. lack of understanding

1. substantive content

1. extreme
2. harsh
3. very unfair
4. unreasonable favorable
5. unconscionable
6. shocking the conscience

Excerpts from Uniform Consumer Credit Code

Section 3.301 Security in Sales and Leases

(1) With respect to a consumer credit sale, a seller may take a security interest in the property sold. . . . . Except as provided with respect to cross-collateral (Section 3.302) a seller may not otherwise take a security interest in property to secure the debt arising from a consumer credit sale.

Section 3.302 Cross-Collateral

(1) In addition to contracting for a security interest pursuant to the provisions on security in sales and leases (Section 3.301), a seller in a consumer credit sale may secure the debt arising from the sale by contracting for a security interest in other property if as a result of a prior sale the seller has an existing security interest in the other property. The seller may also contract for a security interest in the property sold in the subsequent sale as security for the previous debt.

Section 3.303 Debt Secured by Cross-Collateral

(1) If debts arising from two or more consumer credit sales, . . . are consolidated into one debt payable on a single schedule of payments, and the debt is secured by security interests taken with respect to one or more of the sales, payments received by the seller after the taking of cross-collateral or the consolidation are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied first to the payment of the debts arising from the sales first made. To the extent debts are paid according to this section, security interests in items of property terminate as the debt originally incurred with respect to each item is paid.

Contracts of adhesion - contracts in which the parties have unequal bargaining power

Contrary to a policy - EXAMPLE: Williams v. Patton - wife sued for judgement on arrearages, husband and wife reached settlement right before going to trial. Court said the agreement was unenforceable because it was contrary to public policy - it would result in husbands not paying child support

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March 11, 1999

Lawyer's ethics

Not knowing what rights are is the same as not having them at all.

Problem with negotiating settlements:

Most of CA ethical rules are statutory

Can be disbarred for (§6106, 6128)

• moral perpetude
• dishonesty
• corruption

misdemeanor:

• any deceit
• illusion
• intent to deceive other party

Some ethical problems:

1. put client on stand know client will commit perjury
2. give client advice, such as self defense, to give client excuse to make false alibi
3. cross examine a witness to show that person to look like a liar

• must know everything about the case
• maintain strict confidentiality
• be candid with the court

intentional ignorance: tell your client that there are certain things you would rather not know

good movie: SHANE

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March 16, 1999

Holding special sections on Thursday s at 1-2pm

NO class April 22 (no extra session either) - there will be a makeup session to be announced later

Drafting assignment will be assigned soon.

Supercuts case:

Unconscionability analysis:

1. looked at line of cases in CA that preceded adoption of CA Civ. Code § 1670.50:

 

1670.5. (a) If the court as a matter of law finds the contract or

any clause of the contract to have been unconscionable at the time it

was made the court may refuse to enforce the contract, or it may

enforce the remainder of the contract without the unconscionable

clause, or it may so limit the application of any unconscionable

clause as to avoid any unconscionable result.

(b) When it is claimed or appears to the court that the contract

or any clause thereof may be unconscionable the parties shall be

afforded a reasonable opportunity to present evidence as to its

commercial setting, purpose, and effect to aid the court in making

the determination.

 

2. start by asking whether "this contract is unconscionable?"
3. Supercuts argued that P waived rights. But: Paragraph 18 provides that the contract "may not be modified or amended by oral agreement, or course of conduct, but only by an agreement in writing signed by the parties."

revocation - if someone makes an offer, they can revoke the offer before it is accepted

waiver - different than revocation, modification - a voluntary concession of a known right

integration clause - a clause that says this is a final expression of our agreement (partial integration), or says a final and complete expression of our agreement (complete integration) - purpose is to exclude parole evidence

In order to establish unconscionability you need:

• a substantive component
• a procedural component

numbering between UCC and CA CC is pretty similar. CA calls the sections "divisions"

will focus mainly on 1 and 2 - general provisions, sales

(1) "Goods" means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in action. "Goods" also includes the unborn young of animals and growing crops and other

identified things attached to realty as described in the section on goods to be severed from realty (Section 2-107).

Unless the context otherwise requires, this Article applies to transactions in goods ; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this Article impair or repeal any statute regulating sales to consumers,

farmers or other specified classes of buyers .

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March 18, 1999

UNICISG - United Nations Convention on International Sale of Goods

Course of dealing v. course of performance

Couse of performance -

Course of dealing - problem 1.2b

The Hierarchy (some may be waived if shown)

1. Express terms over
2. Course of performance over
3. Course of dealing over
4. Usage of trade.

Lumber

Williams v. Walker Tomas furniture (furniture goods)

Frigaliment Chicken (goods - chicken)

Raffles (delivery of cotton)

Sale of land

employment

shoe company contract - test question

hiring of a place to give a party

design of a web site

building of a swimming pool

repair of mill shaft

Review of question 3 - 1998 final exam

Depending on where the problem lies is whether article 2 governs

On issue on exam will be whether it is covered by Article 2 UCC or not.

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March 23, 1999

Drafting assignment due in 2 weeks.

Read ch 18 of Burnham - plain language drafting - do exercise number 2 in 18.2 - redraft contract in plain language

Can see sample purchase orders on page 590 of our other casebook

Common law mirror image rule - the acceptance needs to be like a "mirror image" to the offer, otherwise there is not a valid contract; only used during formation

Under the UCC, 2207, "a written confirmation operates as an acceptance even though it states terms additional" unless several factors are met

Read comments to 2104, particular attention to comment 2 to 2104

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March 25, 1999

Problem 3.4

2715(2) - consequential damages

2719(3) - excludes consequential damages

knock out rule - a way of handling different terms between the offer an acceptance of a contract. The court will knock out the different terms and use the UCC to fill the gap left by the knocked-out terms

some courts say 2207(2) only applicable for additional terms, NOT different terms - in these jurisdictions, they usually use the knock-out rule (does not work as well for a written confirmation with an oral contract in cases where 2207(2) does not apply)

some courts say 2207(2) does apply no matter if different or additional

3.1(a) - seems to be additional terms sent after the contract was formed - a written confirmation with additional terms is what this should be characterized as

sometimes a judge will ignore a section of the UCC - as in the Gateway case. This shows that the UCC is still not widely accepted

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March 30, 1999

the power to revoke terminates the power of acceptance. As long as an offer is revoked before the other party accepts, there will be no contract