Business Law 11th Edition by Kenneth Clarkson,Roger LeRoy Miller,Gaylord Jentz,Frank Cross

تمرين 4

Sun Coast Merchandise Corp. v. Myron Corp.
Superior Court of New Jersey, Appellate Division, 2007. 393 N.J. Super. 55, 922 A.2d 782.
lawlibrary.rutgers.edu/search.shtml a
• Background and Facts Sun Coast Merchandise Corporation, a California firm, designs and sells products that businesses distribute as promotional items. Myron Corporation, a New Jersey firm, asked Sun about a flip-top calculator on which Myron could engrave the names of its customers. In December 2000, Myron began to submit purchase orders for about 400,000 of what the parties referred to as "Version I" calculators. In April 2001, Sun redesigned the flip-top. Over the next few weeks, the parties discussed terms for the making and shipping of 4 million of the "Version II" calculators before the Christmas season. By May 27, Myron had faxed four orders with specific delivery dates. Two days later, Sun announced a delayed schedule and asked Myron to submit revised orders. Unwilling to agree to the new dates, Myron did not honor this request. The parties attempted to negotiate the issue but were unsuccessful. Finally, Sun filed a suit in a New Jersey state court against Myron, claiming, among other things, breach of contract. The court entered a judgment in Sun's favor. On appeal to a state intermediate appellate court, Myron argued, among other things, that the judge's instruction to the jury regarding Sun's claim was inadequate.
a. In the "SEARCH THE N.J. COURTS DECISIONS" section, type "Sun Coast" in the box, and click on "Search!" In the result, click on the case name to access the opinion.
FISHER, J.A.D. [Judge, Appellate Division]
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The era when a valid, binding contract could only come into existence when a party's acceptance mirrored the other party's offer ended with the adoption of the Uniform Commercial Code (UCC). The UCC altered the common law approach, finding it to be inconsistent with the modern realities of commerce. * * * Article 2 of the UCC radically altered sales law and expanded our conception of a contract. The heart of this revolutionary change in contract law can be found in [New Jersey Statutes Annotated (N.J.S.A.)] 12A:2-207(1) [New Jersey's version of UCC 2-207(1)], which declares that "[a] definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms." No longer are communicating parties left to debate whether an acceptance perfectly meets the terms of an offer, but instead the existence of a binding contract may be based on words or conduct, which need not mirror an offer, so long as they reveal the parties' intention to be bound. * * * [Emphasis added.]
Considering that the UCC permits the formation of a contract by way of conduct that reveals the parties' understanding that a contract exists, and notwithstanding the suggestion of additional or even non-conforming terms, the complex of communications between [Sun and Myron] demonstrates that neither can the formation of a contract be confirmed or foreclosed without a resolution of the existing factual disputes and the weighing of the significance of the parties' convoluted communications.* * *
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In short, it is conceivable-and the jury could find-that the parties' inability to agree on certain terms reveals the lack of an intent to be bound; in other words, that their communications constituted mere negotiations that never ripened into a contract. By the same token, the jury could find that a contract was formed despite a failure or an inability to agree on all terms. N.J.S.A. 12A:2-207(2) provides that an acceptance coupled with the proposal of new or different terms does not necessarily preclude the formation of a contract. In such a circumstance,* * * the new or different terms proposed by the offeree [could] become part of the contract * * *. [Emphasis added.]
All these questions required that the factfinder analyze the meaning and significance of the parties'communications based upon the legal framework provided by the UCC.* * *
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* * * [T]he trial judge correctly determined that the [contentions about] contract formation * * * raised fact questions to be decided by the jury * * *.
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In describing for the jury what it takes for the parties to form a binding contract, the judge stated:
A proposal to accept an offer on any different terms is not an acceptance of the original offer. If any new or different terms are proposed in response to the offer, the response is not an acceptance, but rather a counteroffer. A counteroffer is a new offer by the party making that proposal. The new offer must in turn be agreed to by the party who made the original offer for there to be an acceptance.
As we have already explained, the UCC does not require that a party's response mirror an offer to result in a binding contract. The offeree may propose additional or different terms without necessarily having the response viewed as a non-binding counteroffer. Instead, an offeree's proposal of additional or conflicting terms may be found to constitute an acceptance, and the other or different terms viewed as mere proposals to modify the contract thus formed.
The judge's misstatement in this regard was hardly harmless * * *. In describing when the law recognizes that a contract was formed, the judge provided the jury with erroneous instructions that struck directly at the heart of the case.
• Decision and Remedy The state intermediate appellate court concluded that the judge's instruction to the jury with respect to the question of whether Sun and Myron had formed a contract was "fundamentally flawed" and "provided insufficient guidance for the jury's resolution of the issues." On this basis, the court reversed the lower court's judgment and remanded the case for a new trial.
• The Ethical Dimension How does the UCC's obligation of good faith relate to the application of the principles concerning additional terms
• The Legal Environment Dimension Applying the correct principles to the facts in this case, how would you have decided the issue Explain.