This is a case that involves John purchasing software on the Internet from a web site called Ace Inc. Computer Software. John identifies his two types of software he wants and Ace then sends John a letter of confirmation of his order. When the software arrives, John refuse to accept and does not take the delivery of the product. John found the software at a cheaper price. Did Ace violate any of these laws or was any error committed during contract formation? Or, is John the one that violated a cyberspace or contract law?
Let us consider John’s obligations as the buyer? Once the seller has adequately tendered delivery, the buyer is obligated to accept the goods and pay for them according to the terms of the contract. In the absence of any specific agreements to the contrary, the buyer must (1) furnish facilities reasonably suited for receipt of the goods [UCC 2- 503(1)(b)], and (2) make payment at the time and place the buyer receives the goods, even if the place of shipment is the place of deliver [UCC 2-310(a)]. When a sale is made on credit, the buyer is obliged to pay according to the credit terms, not when the goods are received. The credit period usually begins on the date of shipment [UCC 2-310(d)].
One remedy for the seller, Ace Inc., is the right to recover damages. The seller is entitled to damages if the buyer wrongfully cancels the sales contract or refuses accept delivery of goods covered by the contract. The appropriate measure of damages is the difference between the market price at the time and place of delivery and the unpaid contract price less any expenses the seller may have saved as a result of the buyer’ breach. Another remedy for the seller is the right to recover the purchase price. Before the UCC was adopted, a seller could not sue for the purchase price of goods unless the titled passed to the buyer. Under the UCC, an unpaid seller can bring an action to recover the purchase price and incidental damages.
The next thing to consider in this case are the various cyberspace laws that address authentication, attribution, warranties, signature verification, and the applications of Article 2 of the UCC. There has been some problems associated with cyberspace because of the limited legal environment developed for it. However, there are two governing laws for contracts that have evolved because of e-contracts. In most courts, to date, the traditional contract principles are derived from the Uniform Commercial Code to resolve disputes involving e-contract disputes.
Traditional laws, however, governing signature and writing requirements are not easily adapted to contracts formed in the online environment. New laws have been created to address these issues. For instance, a significant issue in the context of e-contracts has to do with how electronic signatures can be created and verified. Numerous new technologies are available to allow electronic contracts to be signed, including digital signatures.
The minimum contacts requirement is how jurisdiction over individuals and businesses is grounded in the American system. Essentially, this requirement means that a business must have a minimum level of contacts with residents of a particular state for that state’s courts to exercise jurisdiction over the firm. In the context of the Internet, most courts have not viewed the mere existence of a passive Web site as sufficient minimum contacts to exercise jurisdiction over a person or entity out of state. Rather, a state must offer a degree of interactivity to meet the minimum contacts requirement.
Ace didn’t violate any laws that I can distinguish from the case facts and that all requirements of the UCC as well as cyberspace legal customs were followed and the only one who didn’t meet his obligations was the buyer, John, who placed the order and accepted the letter of confirmation from Ace to go ahead and deliver the software products. Since this was done, John has agreed to a contract and formation has taken place over cyberspace. This letter of confirmation that was sent to John and accepted by John is sufficient evidence to establish formation.

Essay B – Contracts
Erma, a merchant, receives a brochure from Ammco regarding some merchandise that is sold in Erma’s business. Erma then sends a purchase order ordering 25 units of merchandise which exceeds $500 in value. Ammco upon receipt of the order sends a letter of confirmation containing additional information which states that the price did not include shipping and insurance costs and that the shipping costs and insurance costs would be added on to the total contract price. These additional terms added are important because of the fact that the truck was hijacked and all the merchandise was destroyed including Erma’s order. The issues in this case are – What law is applicable to this transaction and why? Was there proper formation? Is the carrier liable for the stolen merchandise? Is Ammco liable? Is Erma liable?
Under the UCC, risk of loss doe not necessarily pass with title. The risk of loss is resolved primarily under Sections 2-509 and 2-319 of the UCC. Risk of loss can be assigned through an agreement by the parties preferably in writing. The parties can generally control the exact moment risk of loss passes from the seller to the buyer. The risk of loss, however, generally passes from the seller to the buyer when the seller delivers or tenders delivery of the goods to the buyer. Generally, all contracts are assumed to be shipment contracts if nothing on the contrary is stated in the contract. In a shipment contract, the seller is required or authorized to ship goods by carrier. Risk of loss in shipment contracts passes to the buyer when the good are duly delivered to the carrier.
A destination contract requires the seller to deliver the goods to particular destination. The risk of loss in destination contract passes to the buyer when the goods are tendered to the buyer at that destination. When the goods are to be picked up from the seller by the buyer, the risk of loss passes to the buyer only on the buyer’s taking physical possession of the goods. Buyers and sellers can also obtain insurance coverage to protect against damage, loss, or destruction of goods. But any party purchasing insurance must have a ‘sufficient interest’ in the insured item to obtain a valid policy. The UCC is helpful because it contains certain rules regarding a buyer’s and a seller’s insurable interest in goods on a sales contract.
Buyers have an insurable interest in identified goods. The moment the goods are identified to the contract by the seller, the buyer has this special property interest which allows the buyer to obtain necessary insurance coverage for the goods even before the risk of loss has passed. In this case, the insurance coverage was added to the contract final cost as stipulated by Ammco to Erma when sending the letter of confirmation. Ammco clearly stated that the shipping and insurance cots would be added on to the total contract price. This means that sellers have an insurable interest in the goods as long as they retain the title to the goods.
Even after the title has passed to a buyer, however, a seller who has a ‘security interest’ in the goods (a right to a secure payment) still has an insurable interest and can insure the goods. Thus, both buyer and seller have an insurable interest in identical goods at the same time.
This is one of those situations where the seller finds it impossible to fulfill the contract because the carrier of the goods, the truck was hijacked, and the goods were destroyed, including Erma’s order of 25 units of merchandise from Ammco. This risk of loss under the UCC is reevaluated in regards to circumstances of this nature when something unpredictable happens and the goods are loss in transit. The hijacking of the truck is one of those unpredictable circumstances that causes the seller to be unable to fulfill the contract to the buyer.
The buyer, Erma, also has some remedies available under Article 2 when a seller breaches a sales contract by failing to deliver goods conforming to the contract or repudiating the contract prior to delivery. On the breach, the buyer has the choice of several remedies under the UCC. One remedy is the right to reject nonconforming or improperly delivered goods. The second remedy is the right obtain specific performance. The third remedy is the buyer has the right to recover damages. The buyer may cancel the contract and recover as much of the price as has been paid to the seller. Following cancellation, the buyer may either cover by obtaining goods from another seller and seeking reimbursement for the extra costs incurred or recover damages for the breach of the sale contract.

Essay C – Anti Trust Violations
Fresh Markets controls about 45% of the market for selling organic fruits and vegetables and Willfresh controls about 35%. Fresh Markets has a capital total of $3 billion dollars and Willfresh about $2 billion. Fresh Markets has made a tender offer to purchase Willfresh to consolidate the industry. While this is pending, the two companies decide to divide the market into territories and not compete in certain markets in order to provide what they say is lower prices to the consumers of organic fruits and vegetables. There are some questions in regards to anti-trust legislation. Is this non-competitive agreement a violation of the Sherman Act? What are the provisions of the Clayton Act and are they applicable in this case? Do any of the other anti-trust legislative acts applicable? Will the FTC approve of this merger?
Section 1 of the Sherman Anti Trust Act prohibits a concerted activity on part of two or more persons to restrain trade. Section 2 applies to both unilateral and concerted actions. Section 1 of the act prohibits concerted activity that unreasonably restrains trade. Section 2 condemns individual anticompetitive behavior that produces, or is intended to produce, monopoly power. Both restraint of trade and monopoly power became fundamental concepts for the subsequent anti trust legislation.
In contrast to the Sherman Anti Trust’s broad terms, the Clayton Act’s provisions deal with specific practices that are not expressly covered by the Sherman Anti Trust Act but are considered to reduce competition or lead to monopoly power. These practices are divided into four categories – price discrimination, exclusionary practices, corporate mergers, and interlocking directorates. These behaviors violate the Clatyon Act only if they substantially tend to lessen competition or create monopoly power.
The Clayton Act was amended in 1936 by the Robinson-Patman Act as Congress sought to make it more difficult for businesses to evade the terms of Section 2 involving price discrimination. Price discrimination occurs when sellers charge different buyers different prices for the identical goods. Section 2 of the Clayton Act prohibits certain classes of price discrimination for reasons other than differences in production or transportation costs. To violate Section 2, the seller must be engaged in interstate commerce and the effect of the price discrimination must be to lessen competition substantially. Under the Robinson-Patman Act, sellers are prohibited from reducing prices to levels substantially below those charged by their competitors unless they can justify the reduction by demonstrating that the lower price was charged in good faith to meet an equally low price of a competitor.
The Federal Trade Commission Act’s sole substantive provision is section 5. It provides as follows: “Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce are hereby declared illegal.” The Clayton Act prohibits specific forms of anticompetitive behavior. Section 5 of the FTC Act condemns all forms of anticompetitive behaviors that are not covered by other antitrust laws. The FTC also creates the Federal Trade Commission (FTC) which functions for the purpose of antitrust enforcement as well as other duties including consumer protection.
This is a clear case where the FTC would not approve of this merger in all likelihood because of the anticompetitive impact of the merger on the other smaller competitors in the marketplace. Fresh Markets and Willfresh will dominate the entire industry if merged together with 80% or greater of the total marketplace. These other smaller competitors will then be likely pushed out of the way by this monolith created by the merger through being able to offer the same products at lower prices. The current polices to coordinate pricing arrangements and to introduce non competitive agreements are clearly violations of the anti-trust laws. The FTC would charge these companies with violations of the Clayton Act and Sherman Act and would also refuse to back this merger because of its anti competitive impact on the industry as a whole.

Essay E – Intra-Business Relationships
Flo only has one client – Mac’s construction. She is also getting her equipment from this company, retains a space at the company6, and is available on request of this company at all times. The contract for Flo’s services classified as those provided by an independent contractor to Mac’s construction are $30,000 per year which are paid at fixed intervals to Flo once a month. This kind of relationship between Mac’s Construction and Flo seems to be more like an employee-employer relationship than one of an independent contractor providing services.
An employee can be defined as someone hired by a company, put on the payroll, and expected to work at a specific place for the employer following specific procedures, rules, and guidelines, while also utilizing the employer’s tools and provisions to perform work tasks. In the employer-employee relationship, employers are held liable as principals for the actions of their employee-agents if those actions are carried out in the scope of the employment. Also, federal and state statutes governing employee discrimination, workplace safety, and compensation for job injuries normally apply to only employees not to independent contractors. The tax liability is also affected by the determination of the worker status. Employers are responsible for certain taxes such as Social Security and unemployment taxes with respect to workers called employees but not independent contractors. By contracting Flo out as an independent contractor, Mac is saving all that time, money, and hassles to have Flo classified and provided for as an official company employee.
This is what could happen to Mac over the fact that he has also begun a sexual relationship with Flo. She has become obviously concerned about the workers at Mac’s construction teasing her about the sexual relationship with Mac. So, Flo complains to Mac about the arrangement but Mac refuses to change it. Flo could charge Mac first and foremost with sexual harassment if he continues to come after Flo in a sexual manner and refuses to take her refusals. Mac would then ask for a summary judgment based on the lack of proper standing for Flo since she is officially an independent contractor for Mac construction and therefore cannot pursue a sexual harassment charge against him. It is right here that Mac gets busted.
Here is the criteria that would be employed by the courts to distinguish any given dispute over whether or not the person was an employee or independent contractor: (1) How much control can the employer exercise over the details of the work? (2) Is the worker engaged in an occupation or business distinct from that of the employer? (3) Is the work usually done under the employer’s direction or by a specialist without supervision? (4) Does the employer supply the tools at the place of work? (5) For how long is the person employed? (6) What is the method of payment – by time period or at the completion of the job? (7) What degree of skill is required of the worker? When putting these tests up to the situation involving Flo and Mac’s Construction, Mac is in deep legal problems because he has violated many different laws involving the employer-employee relationship with his treatment of Flo at the workplace, including sexual harassment violations that are covered under Title VII of the Civil Rights Act of 1964.
Mac and his company will also be liable for all back payments for Flo’s unemployment fund, Social Security, and taxes for her work as really an employee for the firm rather than an independent contractor. Flo will also be responsible for violating tax laws by agreeing to this arrangement with Mac because of her filing as an independent contractor and not as an employee of the construction firm. In addition to these mutual tax violations, Mac will also be responsible for any back pay owed to Erma and provide any unemployment compensation she may pursue when she leaves this company in wake of these numerous violations of the law involving her status and her work for the firm.