FALL 2018
*INTRODUCTION
TO UNITED STATES LAW--Discussion
Problem No. 1
--Last Modified:
Friday, 13-Sep-2019 10:30:08 EDT
DISCUSSION PROBLEM--No. 1
Required Text:
* E. Allan Farnsworth, An
introduction to the legal system of the
United States, fourth edition, Oxford
University Press 2010 [hereafter, INTRO
TEXT]. OXFORD
INTRO TEXT LINK . AMAZON
INTRO TEXT LINK . The INTRO
TEXT is available at the prior
links. It should also be available
at the bookstore on the UM Campus when you
arrive in Coral Gables. Note that
this book is also available in Kindle
format should you want to download it for
reading prior to acquiring a paper copy.
* Oliver Wendell Holmes, The Common
Law [hereafter CL TEXT].
GUTENBERG
CL TEXT LINK . There is no
need to purchase the CL Text. It is
available for free at the prior
link. However, it may be purchased
in paperback form or ebook form from a
variety of sources, including Amazon. AMAZON
CL TEXT LINK .
PURPOSE AND GOAL OF THE PROBLEM
This
problem gives the student an opportunity
to do a close analysis of a statutory
provision. This will give the foreign
student exposure to the type of close
analysis that often is expected in a US
law school class room. And, it provides
a vehicle to introduce students to how
they might experience the Socratic
method.
However,
the problem is intended to do much more.
It gives students an opportunity to:
analyze and compare case law
interpreting statutes; learn something
about the structure of the Florida
courts; gain a brief introduction to
proper citation form for legal
materials; apply what they have learned
to evaluate the relative strength of
different kinds of precedents; attempt
some limited basic legal research; gain
an understanding of the role of uniform
law projects in the United States; and
more.
FACTS:
You are an attorney licensed to
practice law in Florida. You have agreed
to represent a single mother of a child
and a disabled veteran in two separate
and distinct commercial disputes on a pro
bono basis. [You should
make time to read INTRO TEXT, Chapter
3, Legal Profession, Availability of
Legal Services, at pp. 38-40, to
understand how legal services are
provided to low income and indigent
clients,and the reference to "pro
bono" though these pages can be read
separate and apart from consideration
of the problem. Also, you
may read materials on the Florida Bar
website at this
link which describes pro bono
and legal services.]
In the first case, Mother has told you
that she contracted to purchase a pair
of prescription eye glasses for her 8
year old son with Fancy Look, Inc
("Fancy"). She had ordered the pair of
glasses for a total price of $440. Fancy
required Mother to pay a deposit of $220
before it would process the order.
Mother paid this deposit in cash.
Thereafter, Mother learned of a benefit
program through which she might obtain
eyeglasses for her son for free. Fancy
called Mother to advise her that the
order was ready for pick up. Mother told
Fancy that she was going to cancel the
order and obtain the eyeglasses
elsewhere. She asked for the return of
her deposit. Fancy told her that it
would not refund any portion of the
deposit.
Fancy was not able to re-use the lenses
in the glasses, which had cost it $60 to
have manufactured specially for
insertion into the frames. Fancy was
able to return the glasses frame into
its inventory for potential sale to
another customer. If it makes a
difference to you, Fancy would have made
a profit of $100 on the sale of the
glasses frames, and a $10 profit on the
sale of the lenses.
In the second case, Veteran ordered a
wheelchair from Wheels, Inc for a
purchase price of $4,000. Wheels
required a deposit of $1,500, which
Veteran paid in cash. Wheels made custom
adjustments to the wheelchair which cost
it $600 to make. Veteran cancelled his
order when a local charity gave him a
wheelchair for free. Veteran demanded a
full refund. Wheels refused to return
any portion of the deposit. As luck
would have it, Wheels was able to
promptly sell the wheelchair it had
modified for Veteran to another customer
for $3,400 (after it had spent $100
additional in labor to undo the special
modifications).
All the parties are located in
Miami-Dade County.
QUESTION FOR DISCUSSION
Is Mother entitled to the return of all
or any portion of her deposit? If so, in
what amount and why?
Is Veteran entitled to the return of
all or any portion of his deposit? If
so, in what amount and why?
APPLICABLE LAW
You know from your first year Contracts
class in law school that the contract
for the sale of glasses or a wheelchair
is governed by the Uniform Commercial
Code ("UCC") because the they are
moveable things which are classified as
"goods" under the Uniform Commercial
Code, and that Article 2 of the UCC
governs the sale of goods. You have
identified a section of Article 2 which
appears to govern the deposit
relationship between a buyer and a
seller of goods: Fla.
St.
s. 672.718. You are going to start
with a review of this section of the law
BUT you are alert to the possibility
that other sections of law may apply to
this transaction.
[As foreign lawyers have not taken a
first year course in U.S. contract law,
the following background may be helpful.
You should read INTRO TEXT, Chapter 11,
Private Law, Contracts, at pp. 133-138,
for a general overview of contract law.
For a more in depth discussion of the
common law of contracts, refer to CL
TEXT, LECTURE VII. CONTRACT. I.
HISTORY; LECTURE VIII. CONTRACT. II.
ELEMENTS. In the United States, contract
law is primarily state law (rather than
federal law). Moreover, the core of
state contract law is the common law,
rather than statute based law. There is,
however, a big exception: the law of
contracts for the sale of goods. All
fifty states have adopted some form of
the Uniform Commercial Code. Article 2
of the Uniform Commercial Code governs
the sale of goods. It can be confusing
to foreign lawyers because it would be
natural to think of the Uniform
Commercial Code as "uniform" throughout
the United States. However, this is not
always the case. A commission on uniform
state laws has promulgated a model
version of the Uniform Commercial Code.
However, this model version is not the
law in any jurisdiction. Rather, under
the system of federalism in the United
States, each state legislature must act
to adopt the model law as the law for
its state. In many cases, a state
legislature will adopt most of the model
law in the form recommended by the
commission on uniform state laws.
However, in the adoption process, the
state legislature may elect to modify
the recommended language or to omit
certain provisions. What this means is
that, for the most part, the Uniform
Commercial Code is uniform throughout
the land BUT it is not completely
uniform: think of it in practice as the
"mostly" Uniform Commercial Code. What
this means is that, even when you are
considering a sale of goods problem
under the Uniform Commercial Code, you
must determine which state law applies
to the transaction and then look at that
state's version of the Uniform
Commercial Code. The link to the above
Florida statute is to the applicable
section of the Uniform Commercial Code
as adopted by the Florida legislature.
However, because the Uniform Commercial
Code is mostly the same across the
United States, cases decided under the
laws of other states may serve as
persuasive, though not binding,
precedent to understand how particular
provisions of the UCC should be
interpreted and applied. The situation
with the Uniform Commercial Code is not
dissimilar from the state of the common
law. It is possible that the common law
has developed differently from state to
state. This is why, for example, you
sometimes must consider a majority
version of a common law rule and
contrast it with a minority
position--points we covered in Lecture 2
and the related reading in INTRO TEXT.
You may view the Uniform Law Commission
website here.]
In addition, through a preliminary
search for possible relevant case law
governing deposits, you have found the
following two cases, one in New York and
one in Florida (though in an exercise
below you will attempt to locate
additional possible case law and other
authority which might be relevant to
your question: an exercise we will
undertake only after initial
consideration of the problem). Until you
undertake your search for additional
authority, conduct your analysis
assuming the two below cases are the
only ones of relevance.
FEINBERG v.
J. BONGIOVI CONTRACTING
442
N.Y.S.2d 399 (N.Y. Dist. Ct. 1981)
DOUNIAS,
J.:
Plaintiff instituted a small claims
action to recover for return of down
payment in the amount of $400. Plaintiff
testified that he ordered wood, paid
cash, received a receipt and three weeks
later he canceled the order. He was
advised that the cancellation would have
to be forwarded to the woodcutter, who
in turn would approve same, and his
money would be returned to him.
In the instant case, the buyer notified
the seller in writing prior to the
delivery of wood that he was revoking
the agreement. Further, he was provided
by the seller with a written form
confirming the rejection for the purpose
of notifying the woodcutter who supplied
the seller with wood of the rejection of
the contract well before the delivery
date.
Since it
appears that the wood which was the
subject of the action was never tendered
to the plaintiff, there can be no
question of acceptance or rejection (see
U.C.C.
2-602 and 2-606).
Rather, it would appear from the above
facts that the buyer repudiated the
contract (2-301, 2-610). Under these
circumstances, U.C.C. 2-718(2) provides
that even if the buyer repudiates, he
may still recover a portion of his
deposit. The amount recoverable is the
amount deposited, less the lesser of
$500 or 20% the value of the total
performance. However, if the contract
contains a liquidated damage provision,
then the amount recoverable is the
amount deposited less the liquidated
damages. From this amount is deducted
any damages to which the seller is
entitled due to the buyer's breach.
Since the contract does not contain a
liquidated damage provision, the
plaintiff is entitled to the following:
$400 original deposit minus 20% of the
contract price of $895, $179, making a
subtotal of $221, minus $50 seller's
costs for notification to woodcutter,
leaving a balance of $171.
Judgment for the plaintiff in the
amount of $171, with costs and
disbursements, plus interest from the
date of repudiation, November 28, 1980.
HONSBERG v.
LYSTRA
410
So. 2d 661 (Fla. Dist. Ct. App.
1982)
PER CURIAM:
In
an action for declaratory and other
relief Friedrich and Margarete Honsberg
sought return of an earnest money
deposit which they had paid to Richard
Lystra toward the purchase of a mobile
home. They appeal the final judgment
which determined that they had breached
the purchase and sale agreement and
which permitted Lystra to retain a
portion of the earnest money deposit on
account of certain enumerated damages
together with an additional amount
resulting from the application of a
theory of equitable distribution. We
reverse that aspect of the final
judgment which credited Lystra with
$2,586.87 as an equitable distribution.
The parties entered into a contract for
the purchase and sale of a mobile home
on August 22, 1979. The agreement
provided for a sales price of $28,000,
of which $1,000 was to be paid to Lystra
on execution, an additional $9,000
within six days thereafter, and the
remainder on closing when Honsberg
house is sold. It is undisputed that
the Honsberg house was placed on the
market and that it had not been sold at
the time this action was commenced. The
parties' interpretation of the contract
as it relates to these facts is
divergent, but there is nothing in the
agreement or on the record that would
justify reversal of the trial court's
conclusion that the house could have
been sold by November 25, 1979, thus
establishing the date on which damages
began to accrue. The implied holding
that sale of the house was not a
necessary condition precedent to closing
on the sale of the mobile home is
sustainable under several alternative
theories, and therefore will not be
disturbed on appeal.
We come, then, to the issue of damages.
The final judgment first concluded that
the earnest money deposit constituted
liquidated damages, noted that a
provision for liquidated damages is
subject to the rule of conscionability
and proceeded to calculate the parties
respective rights in the $10,000
deposit, applying those principles.
The agreement of the parties provided
with respect to damages and the earnest
money deposit:
5. Upon
failure or the refusal of the purchaser
to complete said purchase within 30 days
of contract date, or an agreed extension
therefor for any reason (other than
cancellation on account of increase in
price) the cash deposit may have such
portion of it retained as will reimburse
the dealer for expenses and other losses
including attorney fees occasioned by
purchaser's failure to complete said
purchase. In the event a used car,
trailer or mobilehome has been taken in
trade, the purchaser hereby authorizes
the dealer to sell said property, at
public or private sale, and to deduct
from the proceeds thereof a sum equal to
the expenses and losses incurred, or
suffered, by the dealer by reason of
purchaser's failure to complete the
transaction. Dealer shall have all the
rights of a seller, upon breach of
contract, under the Uniform Commercial
Code 2-708, 2-710, 2-718, of the Uniform
Sales Act (as applicable).
This is not a provision for liquidated
damages. It is, in fact, exactly the
opposite. Simply put, paragraph 5 says
that the deposit shall constitute a fund
securing to the seller the actual amount
of damages he sustains by reason of
buyers failure or refusal to complete
the purchase. The trial court correctly
determined that the amount of actual
damages proven by the seller was
$4,826.26, leaving a deposit balance of
$5,173.74. Applying a theory of
equitable distribution this amount was
to be divided between the parties. The
net result is that Lystra retains
$7,413.13 and $2,586.87 is returned to
the Honsbergs. Neither the parties'
agreement nor any statute to which our
attention has been directed permits this
result.
Appellants breached the purchase and
sale agreement entitling appellee to
retain from the earnest money deposit
his actual damages in the amount of
$4,826.26. The balance, $5,173.74, is to
be refunded to appellants. The trial
court is instructed to modify the final
judgment to give effect to the foregoing
determination. As so modified, the final
judgment is affirmed.
AFFIRMED in part; REVERSED in part; and
REMANDED with instructions.
EXERCISES AND QUESTIONS FOR
DISCUSSION
1. Carefully reconstruct how the court
computed damages in each of Feinberg
and Honsberg. Was the method of
computation the same or different? How
does each method used in the cases
compare to the method of computation set
forth in the literal language of the
UCC?
2. What version of the UCC should you
consult to evaluate the law applied in
Feinberg? HINT: It is not the Florida
version of the UCC. See the New York law
here.
3. If you apply the method of
computation used in each of Feinberg and
Honsberg to the facts of Mother and
Veteran, do you get different results?
4. As between Feinberg and Honsberg,
which case provides a stronger precedent
and why? Is either precedent binding?
[Notes for Question 4:
In law school, particularly in writing
classes, you will likely hear reference
made to "The Bluebook." The Bluebook is
a style manual for legal writing which
sets forth the proper form to use to
cite different kinds of legal materials
in legal writing. It is widely used to
prepare legal academic publications. For
briefs, legal memoranda and court
opinions, the situation is more complex.
A student's first instinct would be to
use the Bluebook citation form for those
types of writings as well. However,
local rules in many states either
suggest or, more likely, mandate use of
another citation form. As part of a
lecture, the Professor will briefly
introduce students to a bit of the
arcana of legal citation. However, the
below discussion should give the student
an idea of what may be at issue with
legal citation. The issue of citation is
decidedly a bit of a detour from the
problem itself except to the extent it
illustrates how citation is used to
facilitate identification of binding
precedent as opposed to merely
persuasive precedent.
The citation to Honsberg v. Lystra
before the case begins [ 410 So. 2d 661
(Fla. Dist. Ct. App. 1982) ] appears to
be in proper "Blue Book" form. It tells
us that the case was decided by a
Florida District Court of Appeals. In
the hierarchy of Florida courts, this
court sits directly below the Florida
Supreme Court. However, the citation
does not tell us which Florida District
Court of Appeal decided the case. On
investigation, we learn that there
are, in fact, five
district
courts of appeal located in
Florida. On
further
investigation, we can discover
that Honsberg v. Lystra was a case
decided in the Fourth District in
Florida. In the legal shorthand used by
Florida lawyers, Honsberg would be
considered a "Fourth DCA" case. Now,
consider Lecture Topic 2: Common Law (in
particular the portion discussing the
difference between binding precedent and
persuasive precedent, including the
cross-referenced reading in INTRO TEXT).
It should occur to you that the failure
of the Blue Book citation form to convey
the information about the identity of
the Florida District Court which decided
the case could be very important. Why?
Because it will help us identify in a
case in Florida whether Honsberg
might be considered binding precedent or
merely persuasive precedent. For another
case heard in the Fourth DCA, Honsberg
(if it has not been overruled, modified,
supplemented, etc.) might serve as
binding precedent. However, in a case
heard in another district-the Third DCA,
for example-Honsberg could not serve as
binding precedent but would merely be
persuasive precedent.
Now, you might ask yourself how it can
be that the apparently official Blue
Book citation form omits this
potentially crucial information. The
answer lies in the fact that not all
courts accept the general Blue Book
citation form. In fact, courts often
publish their own rules of citation
which they expect litigants to follow.
In a brief filed in the Fourth DCA, for
example, we learn that the correct
citation form for Honsberg is: Honsberg
v. Lystra, 410 So. 2d 661 (Fla.
4th DCA 1982). This form of citation
tells us what we need to know for
purposes of evaluating its strength as a
precedent in a Florida court. The
citation rule to use is contained in
Rule 9.800. Uniform Citation System,
contained in the Florida Rules of
Appellate Procedure, at page 135. The
website for the Fourth DCA
contains a link to the applicable rules
of appellate procedure (find it in the
left hand column). The rules are found
on the website
maintained by the Florida Bar in a
section devoted to the publication of
various rules (note that the current
version of the Florida Rules of
Appellate Procedure was published on
July 1, 2016--a reminder that laws and
rules are subject to change and,
accordingly a lawyer must be vigilant
always to use the most current version).
You should know that an updated online
version of the Blue
Book now contains a specific
instruction to include the "4th DCA"
information for a citation used
in-state, i.e. in the State of Florida,
which may be found here.
You may note that for citations used
outside the State of Florida, the
citation as used at the start of the
case in your materials is correct.]
5. What is the version of the UCC which
appears at this link?
Read the following link about Uniform
Laws
in the United States.
6. [NB: This portion of the problem
will be addressed ONLY AFTER a full
class discussion of the basic problem.]
As an exercise, try to find other
authority which may be relevant to
answering our two deposit questions.
[Hint: there are other cases
interpreting the UCC provisions on
deposits and there is at least one case
which appears directly on point. When
you find other materials, you will need
to evaluate the strength of those
materials as precedent.] Explain whether
any of the additional materials which
you locate change your analysis of the
facts as presented.
Policy Implications for Discussion
Though links in the problem, as well as
cross-referenced material to INTRO TEXT,
give the student some indication of how
legal services in the United States are
provided to poor or indigent persons, it
is a fact that poor and indigent persons
within the United States are under
served by the legal community. There are
many reasons for this. In our problem,
for example, the dollar amounts involved
in the dispute are so low that no
private law firm would undertake
representation of the matter for profit.
Legal services simply are too expensive
to address many consumer problems, for
example, even if a party has the
financial ability to pursue a claim.
Here, the problem specified that the
matters were handled pro bono to provide
a realistic scenario in which the matter
might be addressed.
[You should know that there is a
procedure which we will briefly consider
later in the course called a "class
action" in which multiple similar cases
are considered in a single proceeding to
make pursuit of remedies cost effective.
Also, you will briefly be introduced to
small claims courts in which cases are
heard involving small dollar amounts
with streamlined procedures designed to
reduce costs of litigation.]
Legal services to poor and indigent
persons are often thinly staffed with
poor resources. This places a premium on
a detailed knowledge of the rules and an
ability to analyze problems quickly.
As we will see later in the course, in
criminal matters the state often pays
for counsel to represent the poor or
indigent defendant because such
representation is mandated by the U.S.
Constitution. However, even in criminal
matters, coverage by counsel often is
not complete. For example, in death
penalty cases, in some states a
convicted person sentenced to death is
not entitled to appellate counsel as a
matter of right (even though counsel was
provided at the trial level). In these
states, the defendant must handle his or
her appeal pro se--i.e. on their own.
Students are invited to consider how
problems of under representation of poor
and indigent persons should be handled
in a just society.
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