SUMMARY

2 Snowmobiles: Advertised & Displayed

One was raced & hard used
displayed on a raised platform with the numerous
trophies it won.
The other was relatively new & only used as a
demonstation
displayed along with other models and equipment.
In response to the newspaper advertisement, the purchaser
called the company.
Advertised machines were still for sale? => Yes & Had
some hard use, said the Salesman
The machine was the one that the company had in its
display? => Yes
The purchaser offered to buy the machine for $8,000 =>

ISSUE(S)

1. Refund: Yes/No?
2. Liable for Fraud?

RULE(S)
2006 New York Code - Agreements Required To Be In
Writing
UCC - Article 2: Sales
2-201. Formal Requirements; Statute of Frauds
2-204. Formation in General
2-206. Offer and Acceptance in Formation of Contract
2-208. Course of Performance or Practical Construction
2-401. Passing of Title; Reservation for Security; Limited Application
of This Section
2-602. Manner and Effect of Rightful Rejection
2-607. Effect of Acceptance; Notice of Breach; Burden of Establishing
Breach After Acceptance; Notice of Claim or Litigation to Person
Answerable Ove
2-703. Seller's Remedies in General

Restatement (Second) of Contract

161: When Non-disclosure is Equivalent to an Assertion (Silence)

APPLICATION

1. Could it be considered as a valid contract; and

which elements make the contract enforceable?
2. Did the defendant, Snowmobiles Inc., commit
fraud, or should it be considered as an unilateral
mistake?

APPLICATION

1. Could it be considered as a valid contract; and

Which elements make the contract enforceable?

APPLICATION
Article 2 of the UCC, the agreement of the parties, which
exists when one party makes an offer and the other party
accepts the offer, creates a valid contract.
A contract has two essential elements, which are: (1) an
offer, and (2) an acceptance.
The agreement can be expressed orally or in writing.

APPLICATION
2006 New York Code - Agreements Required To Be In
Writing:
(3a) There is sufficient evidence that a contract has been made if:
There is evidence of electronic communication (including, without
limitation, the recording of a telephone call or the tangible written
text produced by computer retrieval), admissible in evidence under
the laws of this state, sufficient to indicate that in such
communication a contract was made between the parties
(4) For purposes of this subdivision, the tangible written text
produced by telex, tele facsimile, computer retrieval or other
process by which electronic signals are transmitted by telephone or
otherwise shall constitute a writing and any symbol executed or
adopted by a party with the present intention to authenticate a
writing shall constitute a signing. The confirmation and notice of
objection referred to in subparagraph (b) of paragraph three of this
subdivision may be communicated by means of telex, tele facsimile,
computer or other similar process by which electronic signals are

APPLICATION

2-201. Formal Requirements; Statute of Frauds:

(3c) Acontractwhich is more than $500 is valid without
being written is enforceable if in other respects to goodsfor
which payment has been made and accepted or which have
been received and accepted.

APPLICATION
2-204. Formation in General:
(1)Acontract for saleofgoodsmay be made in any manner
sufficient to showagreement, including conduct by both
parties which recognizes the existence of such acontract.
(2) Anagreementsufficient to constitute acontract for
salemay be found even though the moment of its making is
undetermined.
(3) Even though one or more terms are left open acontract
for saledoes not fail for indefiniteness if the parties have
intended to make acontractand there is a reasonably certain
basis for giving an appropriate remedy.

APPLICATION
2-206. Offer and Acceptance in Formation of
Contract:
(1) Unless otherwise unambiguously indicated by the
language or circumstances:
(a) an offer to make acontractshall be construed as inviting
acceptance in any manner and by any medium
reasonable in the circumstances;
(2) Where the beginning of a requested performance is a
reasonable mode of acceptance an offeror who is not notified
of acceptance within a reasonable time may treat the offer as
having lapsed before acceptance.

APPLICATION
2-401. Passing of Title; Reservation for Security;
Limited Application of This Section:
(3) Unless otherwise explicitly agreed where delivery is to be
made without moving thegoods,
(a) if theseller is to deliver a document of title, title passes at
the time when and the place where he delivers such
documents; or
(b) if thegoodsare at the time of contracting already
identified and no documents are to be delivered, title passes
at the time and place of contracting.

APPLICATION
2-607. Effect of Acceptance; Notice of Breach;
Burden of Establishing Breach After Acceptance;
Notice of Claim or Litigation to Person Answerable
Over:
(1) Thebuyermust pay at thecontractrate for anygoods
accepted.
(2) Acceptance of goods by the buyer precludes rejection of
the goods accepted and if made with knowledge of a nonconformity cannot be revoked because of it unless the
acceptance was on the reasonable assumption that the nonconformity would be seasonably cured but acceptance does
not of itself impair any other remedy provided by this Article
for non-conformity.
(4) The burden is on thebuyerto establish any breach with

APPLICATION
N.Y., Inc. v. Williams, 69 N.Y.2d 987 (1987)
In that case, a group of homeowners on Fire Island was
ordered to pay dues to a homeowners' association even
though there was no written contract between them. Instead,
there was an implied in fact contract: The homeowners
purchased the homes knowing the homeowners' association
existed, provided services to the area, and charged everyone
in the area their share of the associations' expenses.
Knowing this, they went ahead and purchased the homes
anyway. According to the court, that was enough to create an
enforceable contract to pay dues to the association. No one
can walk away from such an agreement simply because it is
not in a formal written contract.

APPLICATION

2. Did the defendant, Snowmobiles Inc., commit

fraud, or
Should it be considered as an unilateral mistake?

APPLICATION
2-208. Course of Performance or Practical
Construction:
"Where thecontract for saleinvolves repeated occasions for
performance by either party with knowledge of the nature of
the performance and opportunity for objection to it by the
other, any course of performance accepted or acquiesced in
without objection shall be relevant to determine the meaning
of theagreement."

APPLICATION
Frigaliment Importing Co. v. B.N.S. International Sales
Corp
A Swiss company, has ordered frozen eviscerated chickens from
a New York wholesaler of poultry. The order called for chickens
of two sizes: 1 - 2 pounds, and 2 - 3 pounds. When the
shipment arrives in Europe, Buyer discovers that the larger birds
are all stewing chickens. Expecting broilers and fryers, Buyer
cries "foul" and brings suit against Seller for breach of contract.
The plaintiff buyer contends that "'chicken" means a young
chicken, suitable for broiling and frying." The defendant insists
that a chicken is "any bird of the genus that meets contract
specifications on weight and quality, including what it calls
'stewing chicken'

APPLICATION
Available
Advertised
Machine

Common noun
Snowmobile

Had been raced

during the
season

Displayed at
local winter
festival

Raced
Snowmobile

APPLICATION
161 Restatement Law of Contract: When Nondisclosure is Equivalent to an Assertion (Silence):

A person's non-disclosure of a fact known to him is

equivalent to an assertion that the fact does not exist in the
following cases only:
(1) Where he knows that disclosure of the fact is necessary
to prevent some previous assertion from being a
misrepresentation or from being fraudulent or material.
(2) Where he knows that disclosure of the fact would correct
a mistake of the other party as to a basic assumption on
which the party is making the contract and if non-disclosure
of the fact amounts to a failure to act in good faith and in
accordance with reasonable standards of fair dealing.
(3) Where he knows that disclosure of the fact would correct
a mistake of the other party as to the contents or effects of a

APPLICATION
2-703. Seller's Remedies in General:
"Where thebuyerwrongfully rejects or revokes acceptance
ofgoodsor fails to make a payment due on or before
delivery or repudiates with respect to a part or the whole,
then with respect to any goods directly affected and, if the
breach is of the wholecontract, then also with respect to the
whole undelivered balance, the aggrievedseller may:
(a) withhold delivery of suchgoods;
(b) stop delivery by any bailee as hereafter provided;
(c) proceed under the next section respectinggoodsstill
unidentified to thecontract;
(d) resell and recover damages as hereafter provided;
(e) recover damages for non-acceptance or in a proper case
the price."

APPLICATION
Merrimack Mut. Fire Ins. Co. v. Dufault, 958 A. 2d 620
Merrimack Mutual Fire Insurance Co. issued a homeowners
policy including a personal umbrella liability policy to Mr. and
Mrs. Ronal Deufault. The policy covered relatives of the insured
who lived in the same household and owned a motor vehicle.
Frank Beauparlant was involved in an automobile accident with
the Dufaults son who lived with his parents and owned a pickup
truck. Merrimack asked the court the rule that it was not liable
for the sons accident. It alleged that the Dufaults did not intend
the umbrella policy to cover him. Therefore, Merrimack said
there was a mutual mistake about the policy covering the son.
The Court pointed out that any mistake in understanding the
terms of the contract was a unilateral one on the part of the
Dufaults and a unilateral mistake would not avoid the contract.

CONCLUSION
- The contract: Enforceable -> Buyer cannot
revoke
- No Liable for Fraud
- 2-208. Course of Performance or Practical Construction:
"Where thecontract for saleinvolves repeated occasions for
performance by either party with knowledge of the nature of
the performance and opportunity for objection to it by the
other, any course of performance accepted or acquiesced in
without objection shall be relevant to determine the meaning
of theagreement."

- Frigaliment Importing Co. v. B.N.S. International Sales Corp

case.