Week 6: Case Study #2
Read the following set of facts. This set of facts is to be addressed using the relevant sections of the UCC that you have read and are familiar with thus far in the course. Your response should not be more than four (4) pages, double spaced and should focus on why and how the relevant sections of the UCC will guide the parties to a conclusion, and which party should prevail under the UCC.
Phillip Eugene Wendling a Harvey County farmer and stockman, met Ted Puls, an active cattle buyer, in July 1973, at the Central Livestock Sale in Hutchinson, Kansas. Wendling indicated to Puls he might have some cattle for sale around the middle of August 1973. Puls asked Wendling to call him when he decided to sell.
On August 13, 1973, Wendling called Puls and informed him he had 103 head of cattle for sale. Puls associated himself with George Watson, a veterinarian, for financial assistance and on August 14, 1973, the two drove to Wendling’s farm and inspected the cattle. As a result of negotiation, the parties agreed on a price of 61 cents per pound for 98 head and 59 cents per pound on the remaining 5 head. The cattle were to be officially weighed August 16, 1973, on Puls’ trucks with 3% off for shrinkage. At the time of the agreement, Watson gave Wendling his check for $1,000.00 as a down payment on the cattle with the notation thereon, “103 cattle.” Wendling deposited the check on August 20, 1973.
On August 16, 1973, Puls went to Wendling’s farm and requested an additional week to take delivery. Wendling granted the additional week, providing the same terms and conditions applied. Puls assured him they did.
Wendling rounded up the cattle and penned them on August 23, 1973, in preparation for delivery pursuant to the agreement. However, Puls never appeared, sent trucks, or called on that day. Consequently, Wendling attempted to telephone Puls, but was advised Puls was not in and was putting up hay. Wendling then called Watson, who said he didn’t know why delivery hadn’t been taken but he would check with Puls. Finally, on August 27, 1973, Wendling reached Puls by telephone and demanded an explanation. Puls stated he was still working on his (previously undisclosed) problem of finding a place to put the cattle. Wendling requested additional down payment and Puls refused and suggested that maybe he should sell the cattle to someone else. Wendling told Puls he would need a written release before he was free to negotiate another sale. Puls made no response to the release suggestion. On August 28, 1973, Wendling sought legal advice and was advised he should obtain a written release from Puls and Watson before reselling the cattle. The next day Wendling could not locate Puls but was able to talk to Dr. Watson. Wendling requested Watson and Puls meet him at his lawyer’s office to give him a release so he could sell the cattle. They did not appear at the law office as requested, leaving Wendling uncertain as to their intentions.
Thereafter, on September 11, 1973, Wendling caused the following notice to be served on both men:
This is to notify you, Ted Puls and George Watson, D.V.M., individually and jointly that I, the undersigned, Phillip Eugene Wendling, at 10:00 a.m., on the 21st day of September, 1973, at the Farmers Coop Elevator, at Halstead, Kansas, will consider you to have breached the contract entered into with me unless on or before said date and time, you fulfill the terms of said contract entered into on the 14th day of August, 1973, at my farm in Harvey County, Kansas, which contract was as follows:
“You did purchase for cash and were to take delivery of 103 head of feeder cattle on August 16, 1973, at 7:30 a.m. on your trucks at my farm in Harvey County, Kansas and pay for the same in cash after the same were weighed on the trucks at the scales in Halstead, Kansas, as follows:
“98 head at $61.00 per cwt; 5 head at average weight at $59.00 per cwt; all at 3% shrinkage, which cattle at your later requests made from time to time and for your convenience, I have in good faith continued to hold and feed for your convenience awaiting for your compliance with said contract; and I will on the date at the time and place stated above, cause said cattle to be weighed and cause the same to be appraised and a fair market price of said cattle to be established at said time and place and will thereafter pursue such remedies for the breach of said contract as are afforded to me under the uniform commercial code, as provided by the statutes of the State of Kansas.
/s/ Phillip Eugene Wendling”
Neither Puls nor Watson responded to the notice. Wendling proceeded to comply with the terms of the notice. He weighed the cattle on September 21, 1973. They weighed 85,540 pounds. Wendling asked three qualified livestock dealers to make a bid on the cattle that same day. The market was so unstable on that date only one of the buyers made an offer. He bid 42 cents per pound. Applying the 3% shrinkage provided in the contract, the net weight for sale was 82,974 pounds. At 42 cents a pound, the total selling price on September 21, 1973, would have been $34,849.08 compared to $50,533.50 as a selling price applying the original contract terms to the same weight. The $50,533.50 contract amount does not include the $1000 down payment paid by defendants on August 14, 1973. Wendling later actually sold the cattle for $39,978.49 in two lots on October 18, 1973, and November 1, 1973.
Wendling is contemplating filing a civil action to recover damages for breach of an oral contract for the purchase and sale of cattle. He would ask for the price differential of what was originally agreed with Puls and what he actually sold the cattle for, which would be the amount of $14,755.02.
How would you use the UCC to help address this claim? Please be sure to cite the specific sections of the UCC that you would apply, and explain why and how those sections would apply.