Well, I just finished my Contracts exam a few hours ago and it was definitely not easy. Just a whole lot of issues packed into a fact pattern. A few of my classmates thought that it was by far the most difficult exam of any they have taken in law school. I've finished up two exams and two more next week (Torts and Property). M is up in Portland for the weekend and I'm going to be studying HARD for Torts. Of course, the fact that it is 75 and sunny doesn't make it very easy to be in the library all weekend.
A few extras:
Here is a great article about former Oregon Duck Joey Harrington. The article shows him as a class act even as he is leaving a bad situation in Detroit. I hope he does great in Miami.
The title of this blog entry reminds me of a song by Jason Mraz I heard once. You'll need a SHN decoder to listen to it.
Memo to Google: If Picasa is such a sweet program, where is the love for Mac users?
Here is a sample question similar to the one I had to analyze on today's exam:
Smedlach Grain Coop. is a wheat cooperative that sells wheat it purchases from local farmers in South Dakota. Frackton & Sons is a grain wholesaler that buys wheat and other grains from Smedlach and other sources and resells them in the grain marketplace.
On April 3, Frackton and Smedlach entered into a “forward” wheat contract— that is, a contract at a set price to deliver wheat at a specified date (or in this case dates) in the future. Specifically, Frackton promised to buy and Smedlach promised to sell it:
400,000 bushels of #1 wheat at $3.10/bu., in two installments: 200,000 bushels on September 15 and 200,000 bushels on December 15.
On June 3, the managing partner of Smedlach, Porky Smedlach, called Buzz Frackton, that company’s CEO, and said, “We are in trouble due to the present drought. Our predicted yield is down 30%— I don’t see how we can deliver for less than $3.20.” Frackton replied: “I’m sorry to hear that, but we can’t agree to a price increase.”
On August 13, Buzz Frackton e-mailed Porky Smedlach: “I am inquiring about your intent regarding our April 3 agreement.” On August 15, Porky Smedlach replied: “Nothing has changed on our end—sorry.”
On September 14, Buzz Frackton again e-mailed Porky Smedlach: “We are requesting performance on the April 3 contract.” Smedlach did not reply and did not deliver any wheat to Frackton the next day.
October 1, Frackton purchased 200,000 bushels of #1 wheat on the spot market (i.e., for immediate delivery) at $3.35 per bushel—two cents more than the spot market price for such wheat on September 15. On December 20, the spot market price for #1 wheat was $3.50 and Frackton bought 200,000 bushels at that price.
1. Does Frackton have any recourse against Smedlach for Smedlach’s non-delivery of wheat? Include in your answer a discussion of the remedies Frackton could hope to recover if it succeeds on the merits. (30 points)
2. How, if at all, would your answer to question 1 change if in his August 15 e-mail Porky Smedlach said that he has discussed the situation with the coop’s lawyer and is informed that the drought has excused the coop’s performance under the April 3 contract? (10 points)
3. How, if at all, would your answer to question 1 change if it were the customary practice in the South Dakota wheat trade to adjust long-term contract prices up or down to account for freezes, droughts, and similar extreme weather conditions? (20 points)
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