New Jersey State Bar Examination Essay Questions and Answers

SS does not respond but begins to manufacture the sensors. One component of the sensor is manufactured overseas. SS and its supplier, All-Parts, have a contract under which All-Parts agrees to provide sufficient quantities of the component to meet SS’s requirements. Deliveries are made monthly. On January 30, SS advises All-Parts it will need 5,000 components before the end of March, which include the components for Buyer’s 2,500 sensors. All-Parts ships 3,000 in February. In March, the government in All-Parts’ country suspends the export of the components for four months, and All-Parts is unable to ship the remaining 2,000 components. SS cannot find a replacement supplier and is able to complete the manufacturing of only 1,500 of Buyer’s 2,500 sensors. On April 15, SS’s long-term provider of airfreight service goes out of business. After making several inquiries, SS determines it will be impossible to ship by air except by paying ten times the anticipated cost, and no sooner than May 25. SS instead ships in an appropriate temperature-controlled truck. The truck picks up the goods May 14, but breaks down, exposing the goods to desert temperatures. The goods arrive at Buyer’s place of business June 1. The 1,500 sensors are unloaded and a receipt is signed by Buyer’s foreman, noting “All rights reserved.”

On July 10, during quality control testing of the engines into which the sensors had been installed, Buyer discovers a 40% failure rate. Buyer notifies SS it will sue for failure to deliver 2,500 working sensors by May 25 unless SS cures by August 15. SS hires you to prepare a comprehensive memorandum outlining its rights, obligations, and liabilities.

PREPARE THE MEMORANDUM

Sample Answer 1

To: SS
From: Lawyer
Re: Buyer et al.
Date: July 29, 2004

Memorandum

There are several issues arising from your dealings with Buyer. The first issue is Buyer’s likely claim versus you and your defenses. The second issue is what claims you have against All-Parts and the trucking company.

To begin with, Buyer will likely be able to assert a valid claim for the defectively delivered 1,500 sensors, but not for the entire shipment of 2,500. You will have a valid claim against the trucking company, but not against All-Parts.

Buyer vs. SS

A. Contract Formation

Before Buyer can sue for any breach of contract, a contract must be shown to exist. Because this agreement deals with the sale of goods, it is covered by Article 2 of the UCC. Contracts under the UCC Art. 2 for more than $500 must be in writing, or have a valid exception, to satisfy the Statute of Frauds.

The Statute of Frauds prevents enforcement of any contract against a party, unless that party signed a writing containing sufficient information. The letter sent by Buyer to you satisfied the sufficient writing requirement, but was not signed by you. However, the UCC allows enforcement of a writing, such as this one that by its writing claims to be memorializing an oral agreement, if the other party does not contradict the writing within a reasonable time. Since you never disputed the assertion in the letter that it was confirming your agreement, that letter is viewed as a valid contract and binding on you.

Undershipment of 1,500 sensors.

A contract for goods under the UCC requires the goods sent to the Buyer confirm perfectly with what was ordered. Failure to provide perfect tender means the buyer can reject all the goods (allowing for time to cure), reject the nonconforming goods, and reduce the payment accordingly, or accept.

In this case Buyer ordered 2,500 sensors, but only received 1,500. This undershipment would count as a breach, except the UCC recognizes that when a seller cannot satisfy all of its order due to unforeseen problems outside of the seller’s control, the seller should proportionally reduce all of the orders by its underage. The Buyer cannot reject a shipment, but will have their price reduced accordingly.

Since you were prevented from filling your orders due to the actions of a foreign government, you were correct in proportionally reducing all of your orders. Furthermore, Buyer does not have the option to reject the goods for this reason, but will simply pay for 1,500 sensors at the agreed $250 per sensor.

Defective Goods

As described above, the perfect tender rule requires the goods sold be exactly as ordered. The 40% of sensors being defective violates the perfect tender rule, so Buyer has a valid claim for breach for those goods.

You have several defenses, but none are likely to be successful. First, you can argue the risk of loss was on Buyer because the contract was FOB at your plant.

An FOB contract requires the seller get the goods to the required location, provide for shipping from there, and notify the buyer the goods are in transit. The method of shipment is whatever is commercially reasonable, unless specified in the contract. When the seller has properly delivered the goods to the FOB location, the risk of loss passes to the buyer.

You properly delivered the goods to your place by May 15 as required and, I assume, notified Buyer the goods are being shipped. However, you shipped the goods with a carrier not provided for in the agreement. Such a breach of the carrier agreement means the risk of loss did not pass to the buyer, but remained yours. Furthermore, the significantly higher cost of shipping by agreed upon terms is not a defense. You assumed the risk of carrier costs increasing, and the original agreement was not unconscionable.

Your second defense is that Buyer failed to do a timely inspection and did not report any problems within a reasonable time after they should have been discovered. The UCC allows a buyer a reasonable time after delivery to inspect the goods, and, if they do not conform, to reject them.

In this case the goods arrived on June 1, but were not inspected until July 10. That six week delay may be considered an unreasonable time to inspect, but even if it is seen as so, the buyer still has the right to revoke his acceptance.

After acceptance, a buyer can revoke his acceptance if the goods are discovered to be nonconforming. Such revocation must be within a reasonable time of discovering or should have discovered the defect.

It is unlikely a court would find both the inspection and the revocation time periods had passed from June 1 to July 10.

SS v. All-Parts

SS can sue for breach for All-Parts failing to deliver the 5,000 components. All-Parts has a valid defense that the contract became impracticable to perform. It no longer had to perform under the contract.

Impracticability requires that, although it may be possible to perform a contract, it is commercially extremely unreasonable to do so. The reason or cause of this problem must be from an unforeseen source outside of the breaching party’s control.

The problem here is a foreign government’s ban on exports. Such a ban makes it all-but-impossible for All-Parts to get the required goods to you. Therefore, All-Parts is excused from performance.

All-Parts could also claim the contract fails for lack of consideration because a quantity of whatever required is illusory. However, courts have long recognized that requirement contracts are valid contracts based on the illusion of illusoriness theory.

SS v. Trucking Co.

All contracts have a good faith requirement to perform. Although the trucking co. may not be at fault for its truck breaking down, it was a breach and resulted in damages to the shipped goods. Therefore, you can sue for breach and will win.

Sample Answer 2

Memorandum

To:
From: Bar Applicant
Date: July 29, 2004
Re: SS’s rights, obligations and liabilities

Is there a valid, & enforceable contract?

Under Article 2 of the UCC a contract for the sale of goods (moveable personal property) valued @ $500 or more requires a writing to be enforceable and not in violation of the Statute of Frauds. However, an exception exists when a merchant (one engaged in the business of selling/buying the goods at issue) sends a signed confirmatory memo to another merchant that sufficiently identifies the contracting parties, and the terms of the contract. If the merchant does not respond with 10 days of receiving this memo a contract has been formed.

Here, we have a contract for the sale of goods over $500 b/c sensors are moveable personal property and the total contract cost is $625,000. Also, both SS and buyer are merchants b/c SS is engaged in the business of selling sensors and buyer is in the business of buying sensors in order to manufacture ship engines.

Buyer’s written, signed memo sent to SS sufficiently identifies a contract b/c it identifies the parties (SS & Buyer), and it sufficiently identifies the terms of quantity (2500 model-T sensors), price ($625,000 to be paid w/n 5 days of receipt), and delivery (FOB, shipping by climate controlled air freight).

B/c SS failed to respond to this confirmatory memo, a valid contract was formed under the Merchant Confirmatory Memo Exception to the Statute of Frauds.

Did SS breach the contract?

Under UCC Art. 2, perfect tender is required. In other words, any non-conformity in delivery of goods that deviates from the contract’s terms is a non-conformity. A buyer has the right to reject non-conforming goods. Furthermore, a buyer may accept the goods and then revoke his acceptance if the nonconformities (1) substantially impair the value of the contract and (2) the non-conformities could not have been discovered upon delivery.

Here, SS breached the contract by delivering only 1,500 out of the 2,500 model-T sensors it was obligated to deliver under the contract. Also, b/c these sensors were not shipped by control airfreight the sensors were damaged, and so 40% of them were useless to Buyer.

SS may argue that Buyer accepted the non-conformities by taking delivery on June 1st and not reporting any non-conformity until July 10. However, Buyer may properly revoke his acceptance b/c the delivered sensors substantially impair the value of the contract since when installed into engines there was a 40% failure rate. Also, Buyer had no reason to know of the sensors non-conformities until actual quality control testing occurred. As such, Buyer’s revocation of acceptance only one month after delivery is reasonable given the circumstances.

In addition, SS’s deviance from the contract requirement of shipping by air is not acceptable. Although SS could argue impractability based upon the fact that shipping by air was ten times more expensive, mere decrease in profits is not a sufficient excuse. Moreover, the change in delivery methods directly led to the sensors being damaged by overexposure to heat.

Thus, SS was in breach of the contract.

III. Remedies

Buyer’s remedies upon breach under the UCC include: the cost of cover (replacement goods) or market price damages if cover is not available plus incidental expenses or reasonable costs. Buyer in equity may also seek specific performance of the conforming goods at the Seller’s expense.

Here, Buyer has demanded that SS specifically perform the contract by August 15, or else Buyer can elect to sue for money damages under the UCC, for the difference between the market price of 2,500 sensors – the contract price of $250 per sensor, assuming of course that replacement model T sensors are not available. If they are available, then Buyer has a duty to mitigate damages by seeking cover in (1) good faith (2) w/o unreasonable delay and (3) at a reasonable price.

SS could attempt to argue excuse from performance based on the impossibility of its supplier All-Parts. Impossibility refers to the occurrence of an event whose non-occurrence was a basic assumption of the contract.

Here, government’s conduct is suspending exports in All-Parts’ country made it impossible for SS to meet buyer’s demands in time. In addition SS could not reasonably find a replacement supplier. Such events were not foreseeable to SS and Buyer at the time of contracting. However, this only served to delay SS’s time for performance b/c exports from All-Parts’ country were only suspended for four months starting in March. Thus, by the end of June, SS should be able to get a sufficient quantity of components delivered to meet Buyer’s demand for specific performance.

It should be noted, that b/c the government actions in All-Parts’ country were not foreseeable and made performance impossible, SS will not be able to sue All-Parts for breach of contract damages based upon All-Parts’ non-performance of their out contract w/SS since their performance was excused under the circumstances.

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QUESTION 6 (TORTS)

Cynthia owns and operates Archery Alley, where bow and arrow enthusiasts can practice their skills in an enclosed range. Cynthia purchases arrows from Barry, a dealer in archery equipment. On the outside of each box of arrows is a warning label as follows: “ARROWS INTENDED SOLELY FOR RECREATION – DO NOT TAMPER.” Because arrows eventually splinter due to repeated use, Cynthia purchases approximately ten boxes of arrows each week.

Pete works for Cynthia. His duties include opening each box of arrows upon arrival and inspecting them to make sure they are free from obvious defects. As a youth, Pete’s schooling was sporadic and, as an adult, he is functionally illiterate.

Pete dislikes Tony, a customer who frequents the premises. Knowing that Tony is practicing for an upcoming tournament, Pete shaves the tips of a batch of arrows Tony intends to use. Pete knows this will cause the arrows to fly in an unpredictable manner, making it almost impossible to hit the targets. Pete plans to watch Tony’s practice session and enjoy the sight of his frustration.

One evening, Tony is practicing with the shaved arrows. His first two shots are so wild they actually land in the area designated for bystanders, far from the targets. His third shot strikes Joe, a patron standing with other bystanders in that area. Joe is injured and requires hospitalization.

Joe hires your law firm. Discovery reveals the facts outlined here. The senior partner has asked you to analyze the case, list all potential defendants and the possible claims against, and defenses for, each such person. He has also asked you to discuss areas where an expert witness might be of assistance.

Sample Answer 1

To: Partner
From: Applicant

Joe claims against Tony, Pete, Archery Alley and possibly Cynthia and Barry. They will raise the defenses of assumption of risk and comparative negligence, but these will not preclude recovery. An expert witness could help us prove that Pete’s misconduct caused Joe’s injury.

Joe v. Tony

Tony may be liable for negligence. He did not intend to hit Joe but is liable for negligence if he breached a duty of reasonable care, and caused Joe damages.

Tony has a duty to act as a reasonably prudent person and avoid harm to foreseeable plaintiffs. Joe was a bystander and it was foreseeable that an arrow could injure him. Therefore, Tony owed him a duty of reasonable care.

We have an argument that Tony breached his duty. Tony is a frequent archer who competes in tournaments. On the day in question, however, his first two shots were so wild that they landed in the area designated for bystanders. A reasonable person would have stopped shooting and inspected the arrows and replaced them. Tony was on notice that something was wrong with his arrows. He breached his duty. The arrows caused Joe’s injury, and Joe has been damaged.

Joe v. Pete

Pete intentionally shaved the tips of the arrows, knowing that they would fly in an unpredictable manner. He may be held liable for battery, possibly intentional infliction of emotional distress and negligence.

Battery requires intent to cause harmful or offensive contact to another’s person and causing such contact. A person can be liable for battery if he is reckless. Pete recklessly shaved the arrows, knowing the likelihood that they would fly unpredictably and hurt someone. Arguably, he intended a battery. He can respond that he had no idea the arrows would fly so far afield. He was not aware of the attendant circumstances. He may prevail on this theory.

He can probably be found liable for intentional infliction of emotional distress. He engaged in extreme and outrageous behavior, intending to cause distress to Tony. He is liable for damages caused by his behavior. Under the doctrine of transferred intent, he could be found liable for causing distress to Joe (although emotional distress damages could also be tacked on to a negligence claim).

Pete is liable for negligence, too. He had a duty to foreseeable victims, like Joe. He may claim that as a functional illiterate, he could not read the warning “DO NOT TAMPER.” However, his behavior will be compared to a reasonably prudent person, not to other illiterates. In any event, it was still negligent to tamper with the arrows.

We would have to show that the shaving of the arrows caused the injury. Expert testimony would be helpful on this point. Perhaps an engineer or physicist could explain the Motion of arrows.

Joe v. Archery Alley

If Archery Alley is a corporation and if it employed Pete, Joe should file a claim against it based on negligence and negligent retention.

Archery Alley is vicariously liable for the torts of its employees under the doctrine of respondent superior – as long as the torts were committed in the scope of employment. Here, Pete shaved the arrows while employed by Archery Alley. It will be held liable for his negligence. It may argue that intentional torts are not foreseeable and outside the scope of employment. That is generally the law, except where the tortfeasor is furthering his employer’s business or torturous conduct is foreseeable.

Archery Alley can also be held liable for negligent retention. It was negligent to hire a functional illiterate to inspect arrows, especially since he could not read the warnings on the box. As a seller of a defective product, it can be held liable for products liability.

Joe v. Cynthia

If Archery Alley is a corporation, Joe cannot hold Cynthia vicariously liable as an owner unless he can pierce the corporate veil. If she was directly negligent in her capacity as an operator of Archery Alley, he can hold her liable on a similar theory of negligent selection.

Joe v. Barry

A manufacturer can be held liable for defective goods even in the absence of negligence. Barry is a manufacturer and can be held strictly liable if the arrows had a manufacturing defect, design defect or warning defect.

Arguably, the warning should have been more detailed. An expert may help us prove that there was a design defect and shaving the tips shouldn’t have caused such sporadic behavior.

As a seller of arrows, Archery Alley can also be held liable, but can seek indemnity from Barry.

Defenses

All of the defendants who are sued for negligence can argue that Joe assumed the risk of injury. By standing near an archery range, he knew there was a possibility of injury. Joe can convincingly argue that the possibility was remote and rare and he was not aware of it.

The defendants will also argue that Joe was negligent in remaining in the bystander zone after two of Tony’s arrows had already landed there. Even if defendants can make a comparative negligence claim, this will only reduce Joe’s recovery, not eliminate it. His negligence was minor compared to the others.

Expert Testimony

Expert testimony can help us prove the following:

1. The arrow had a design defect;
2. The shaving of the tips caused the arrow to injure Joe;
3. The warning was inadequate;
4. Other Archery Alleys employ better qualified employees;
5 Joe’s medical problems were caused by defendant’s misconduct;
6. The effect of the injury on Joe’s employment potential, etc.

Sample Answer 2

MEMO

To: Sr. Partner
From: Applicant
Re: Broken Arrows
Barry – Strict Liability

A claim may exist against Barry. To succeed at strict liability, one must show that a person sold a defective product, unreasonably dangerous to users, that causes physical harm to users and the seller was in the business of selling and the product was in substantially the same condition as when it was sold. Barry was a retailer of arrows, however, Pete tampered with them so they were not in the same condition as when sold.

Joe may argue that the defective condition was a lack of warning, the condition was unreasonably dangerous and it caused his injury.

It is true that the arrows had written warnings, however, there was no picture. Warnings may constitute a defect when they are insufficient to protect against foreseeable misuse. Here, the misuse was foreseen. The warning itself addressed it – DO NOT TAMPER. Joe may argue that the cost of a picture on the box was minimal compared to the harm and as such Barry as a retailer was unreasonable in not having the warning and should be strictly liable.

DESIGN DEFECT

A product’s design may be defective in itself if it is unreasonably dangerous. Joe needs to establish that there was a reasonable alternative design. The Alternative needs to be cost efficient, i.e. not unreasonably prohibitive, and must not destroy the utility of the product.

Barry knew the arrows could be tampered with and the danger. Joe may use an expert here to establish that a different alternative design is available, not cost prohibitive and won’t harm the utility of the product.

TONY – NEGLIGENCE

Joe may bring a claim of negligence against Tony. Negligence requires a duty, breach, causation (Fact and Legal) and Damages.

Duty – person must conform to a specific standard of conduct as not to unreasonably risk harm to others. Generally, this is a reasonably prudent person standard, however, a person is required to act with any special skill or knowledge he has.

Here, Tony was an experienced archer. He competed in the sport. He shot two arrows that landed in the bystander area. He should have known something was wrong and not continued to shoot arrows into the bystanders. He breached his duty of care.

The breach was the but for cause of Joe’s injury. But for Tony shooting a 3rd bad arrow it would not have occurred. It was foreseeable that shooting an arrow into the bystanders would result in that injury. Tony is also the proximate cause. Finally, Joe was damaged – hospitalization.

DEFENSES

Assumption of Risk – contributory/comparative neg. It may be argued that Joe was also at fault because he failed to get out of the way. Two arrows landed previously; he should have acted reasonably.

VICARIOUS LIABILITY

Cynthia may be vicarious liable for the actions of her employee Peter.

Vicarious liability requires that the employee:

1. Act within scope of employment

- Time
– Place Frolic/Detour

2. Be acting generally for benefit of employer.

Pete was working for Cynthia. His duties were to open each box of arrows and inspect them for defects. He was at work during work hours and doing his job. Cynthia may be vicariously liable for Pete’s negligence. She may not be liable for Pete’s intentional torts unless they are in furtherance of the employment or the employment creates conflict. That is not the case here.

A claim may also exist against Cynthia for negligent hiring.

1. Employer/Employee relationship;
2. Employee unfitness for employment;
3. Employee’s defect causes harm;
4. Employer knew or should have known of unfitness, or, alternatively, failed to properly investigate;
5. Damage.

Here, Cynthia probably should have known that Pete can’t read. She gave him the duties of inspecting dangerous arrows w/written warnings. She breached her duty by not making sure Pete understood the dangers. Joe was injured as a result of Pete’s inability to read.

Causation will be difficult to prove here. It must be argued that had Pete read the warning, he would not tamper with arrows.

Pete

- Battery
– Negligence