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Sally’s Case Study

Read Sally’s Case Study below

Sally calls about an urgent issue with her catering company (Gravy Train, LLC) contract with the federal government. Her usual supplier was hospitalized and could not ship her weekly order needed to service her military accounts. Sally was referred by General Messhall to a different supplier to fill the order. Sally faxed her standard pre-printed order form to the new supplier for $17,642.54 worth of goods. The order form contained the foodstuff, quantity, payment terms, and the amount listed on the front and the usual boilerplate terms on the back. Within two days, Sally received the order from the substitute supplier. The supplier also sent his pre-printed invoice form with the supply delivered on the front and different boilerplate terms than Sally’s invoice on the back that also contained a payment term penalty. Jack’s business form included a price differential for $20,642.54, a three-thousand dollars price increase over Sally’s invoice. When Sally received the goods the next day, she immediately put them in cold storage. That same day Sally received a call from someone that identified himself as, “Jack, the Substitute Supplier.” Jack stated, “Ehey! Dis is Jack, the Substitute Supplier.” I want to inform you that your payment for the shipment is overdue, and “cause you’re late; the Vig rate is an additional $3,000 per day plus the base price.” Sally said Jack told her to review his invoice, which stated that a penalty of $3,000 per 12 hours default nonpayment surcharge attaches for late payments.

Sally retorts, “yea well, I don’t accept.” She instantly retrieved his invoice and read the terms on the back of the invoice and realized that the supplier’s form did have payment terms demanding payment for delivery of goods within 12 hours of delivery. That calculated out to be $6,000 over her regular invoice price and another $3000 due in 12 hours. Sally noted that her form had a different term for payment that gave her 30 days net payment. Jack, the substitute supplier, told Sally before hanging up that if he doesn’t receive his cash, plus any penalties due, he was going to file a lawsuit immediately for breach of the terms of his delivery order.

Sally retrieves her form and compares the two order forms side by side. She notes a substantial difference in the boilerplate terms but notes other conditions are similar but noticeably different enough to make the effect substantially unfavorable to her. Jack’s form matches the goods requested, listed the correct quantity, and the delivery terms were the same as her form required. Jack’s standard terms (often called “boilerplate”) were utterly unreasonable and one-sided not matching hers at all. He had the right to substitute non-conforming goods, did not warrant the quality of the products. His form demanded that dispute resolution through mandated arbitration to determine any dispute unless it involved the interpretation of a price term. Since the issue involved pricing, Jack could sue in Federal Court in his state based on diversity.

Is it normal to use purchase and acceptance order forms for commercial goods without a signed contract? It is very normal to use order forms without a signed contract in commercial transactions. Purchase/acceptance orders are fast and cover essential information and requirements of merchants. Contracts take time, and the process does not always result in an agreement, nor are contracts completed on time once the lawyers are involved. With merchants, time is of the essence; they need it now! Purchase orders, while written by a lawyer, do not have the benefit of a lawyer’s oversight when there are crossing forms designed to expedite a commercial transaction now. As a result, the merchants don’t end up with signed contracts. The question is, at what point is a contract formed, if at all, and what are the terms? Purchase order disputes continuously end up in litigation. These cases are very fact-specific, with the result determined by the specific transaction in question. The ultimate issue with competing purchase order form terms and no signed contract, is “what’s enforceable?”

Assignment

Sally asks that you advise her if the supplier is trying to rip her off or if there is simply a misunderstanding. She believes she is in the right because it was her order and invoice. She states she never agreed to the terms of his invoice, and it appears that Jack has agreed to her terms because he sent the supplies.

Based on the information Sally has provided, prepare an IRAC formatted response outlining the issues answering the questions below: An example of the IRAC format is located in the attachments along with additional resources that can assist your response. Use the link listed to also guide you answers. (https://www.lexisnexis.com/lexis-practical-guidance/the-journal/b/pa/posts/contract-drafting-advice-the-battle-of-the-forms-demystified)

Questions:

This question has four parts:

  • What are the elements needed to form a contract?
  • Is an agreement enforceable?
  • What is a “Purchase Order?
  • How would you characterize the terms of a Purchase Order?

Is there a difference between a purchase order (Invoice) and a contract? If so, what is different between the two?
Are Purchase Orders (Invoices) controlled under Contract law or the Uniform Commercial Code (UCC)?
Is there an advantage of a contract over an invoice? If so, what are the advantages and disadvantages of each instrument?
Under the facts of this case study, how many transactions are there, one or two transactions? Explain?
How or when is an enforceable agreement formed in contract negotiation? How about with Purchase Orders (Invoices), when is an enforceable agreement established under the UCC? Is there a binding agreement in this case? Why or why not?
What facts are in Sally’s favor of canceling the order?
What facts are in Jack’s favor in enforcing payment?
In Contract Law, you must have a meeting of the minds before there is an enforceable agreement or, the Acceptance must match the Offer. What is this Contract Rule called?
Common-Law Contracts require that the Acceptance must not add or change any terms of an offer. What is it called when an Acceptance of an Offer changes terms of the Offer?
In this case, is there a meeting of the minds under the UCC using Invoices that differ in terms? Explain.
Have the parties formed a contract? If so, what are the enforceable terms? If not, how should this dispute be resolved?
What should Sally do to show she did not accept the goods? Has she accepted the goods? Explain?

Sample Solution

Introduction Both mental and developmental disorders in childhood, refers to syndromes in neurological, emotional or behavioral development, with serious impact in psychological and social health of children (Nevo & Manassis., 2009). Children who suffer from these types of disorders, they need special support firstly from their close family environment and then from educational systems. In many case, the disorders continue to exist in adulthood (Scott et al., 2016). According to Murray and partners (2012), mental and developmental syndromes in childhood, are an emerging challenge for modern health care systems worldwide. The most common factors that tend to increase such syndromes in low and middle income countries, is the reduced mortality of children under the age of five and the onset of mental and developmental syndromes in adults during their childhood One of the most common mental disorders in children with developmental disorder is anxiety disorder. In the Diagnostic and Statistical Manual of Mental Disorder, seven types of anxiety disorder are recognized both in childhood and adolescents. Among them are Separation Anxiety Disorder (SAD) and Generalized Anxiety Disorder (GAD) (American Psychiatric Association, 2000). The aim of this study is, to present a common mental disorder that affects children with a developmental syndrome. Thus, try to present the clinical features, the prevalence and diagnostic issues in this population. 1. Mental disorders in children World Health Organization (WHO) has identified mental health disorders, as one of the main causes of disability globally (Murray & Lopez., 2002). According to the same source of evidence, childhood is a crucial life stage on the occurrence of mental disorders, which are likely to affect the quality of life, the learning and social level of a child. Within this framework, possible negative experiences at home like family conflicts or bullying incidents at school, may have a damaging effect on the development of children, and also in their core cognitive and emotional skills. Moreover, the socioeconomic conditions within some children grow up can also affects their choices and opportunities in adolescence and adulthood. On the other hand, children’s exposure in risk factors during early life, can significantly affect their mental health, even decades later. The coherences of such exposure can lead on high and periodically increasing rates of mental health, and also behavioral problems. In European Union countries, anxiety and depression syndromes are among top 5 causes of overall disease burden among children and adolescents. But, suicide is the most common cause of death between 10 to19-year-olds, mainly in countries with low- and middle-income and the second cause in high income countries (WHO, 2013-2020). 2. Anxiety disorder in children with neurodevelopmental disorder According to American Psychiatric Association (APA, 2013), anxiety disorder is characterized by excessive or improper fear, which is connected with behavioral disorders that impair functional capacity. Furthermore, anxiety is characterized as a common human response in danger or threat and can be highly adaptive in case of elicited in an appropriate context. Is clinically important when anxiety is persistent and associated with impairment in functional capacity, or affects an individuals’ quality of life (Arlond et al., 2003). Especially in childhood, clinical characteristics of anxiety is complicated when complicated by developmental factors, due to the reason that some type of fears maybe characterizes as normative in certain age of groups (Gullone, 2000). Additionally, although a child is able of experiencing the emotional and physiologic components of anxiety at an early age, definite mental abilities may be prerequisites for the full expression of an anxiety disorder (Freeman et al., 2002). Within this framework, Separation Anxiety Disorder (SAD) is characterized by excessive and developmental inappropriate anxiety, as a response to separation from the close family environment or from attached figures. The most common symptoms in such disorder are, anticipatory anxiety concerning with separation occasions, determined fears about losing or being separated 2.1. Anxiety disorder prevalence in children Although an essential body of data are available about the epidemiology of anxiety disorders, the evidence for prevalence presented are highly fragmented and the reports for prevalence varies considerably (Baxter et al., 2012). According to global epidemiological data evidence, mental disorders is a difficult task, due to significant absence of officially data for many geographical regions globally. These evidence are less in pediatric patients – children, particularly in low to middle income countries where other concerns are in the front line. The above issue of data absence, is highlighted in the Global Burden of Disease Study 2010 (Whiteford et al., 2013). Childhood mental disorders epidemiologically data, were remain relatively constant during the 21 world regions defined by Global Burden of Disease Study 2010. However, these prevalence rates were based on sporadic data, for some disorders or no data for specific disorders in childhood. According to the12-month global prevalence of childhood mental disorders in 2010 is shown that, anxiety disorder rates were higher in adolescents between the age of 15 to 19 years old and especially in females (32,2% general rate, 3,74% in males and 7,02% in females). Moreover The anxiety disorder rates in children between the age of 5 to 9 years old were (5,4%) and 21,8% in children between the age of 10-14. In both groups of children, the percentages of prevalence were higher in females. These systematic reviews were then updated for GBD 2013, were the data for mental disorders in children and adolescents were sparse. This resulted in large uncertainty intervals around burden estimates despite mental disorders being found as the leading cause of disability in those aged under 25 years. Moreover, lack of absence of empirical data restricts the visibility of mental disorders in comparison with other diseases in childhood and makes it difficult to advocate for their inclusion as a priority in health initiatives 2.2. Anxiety disorder clinical features The main clinical features of Separation Anxiety Disorder (SAD) is, the inordinate and developmental inappropriate anxiety about separation from the home or from attachment figures. The leading symptoms of that type of mental disorder, refers to anticipatory anxiety regarding separation events, persistent concerns about losing or being separated from an attachment figure, school denial, unwillingness to stay alone in the home, or to sleep alone, recurrent nightmares with a separation theme, and somatic complaints. In particular, the clinical feature of school refusal has been reported to happen in about 75% of children with SAD, and also SAD occurs in 70%to 80% of children presenting with school refusal. In that case, epidemiologic studies exhibit that the rates of prevalence are from 3.5% to 5.1% with a mean age of onset from 4.3 to 8.0 years old (Masi et al., 2001). One area that has attracted considerable attention is the potential link between childhood SAD and panic disorder in adulthood. Indirect support for this hypothesis is provided by retrospective studies of adults with anxiety disorders. Furthermore, the developmental sequel between childhood anxiety disorders and panic disorders in adult age, is also supported by the biologic challenge study, of Pine et al. (2000). Researchers at this study found that, children who suffer from SAD (but not social phobia) they showed respiratory changes during carbon dioxide inhalation that which had common characteristics with adults’ panic attacks. In a similar study, children with SAD and parents who suffer with panic attacks, were found to have significant percentage of atopic disorders, including asthma and allergies (Slattery et al., 2002). On the other hand, Generalized Anxiety Disorder (GAD) in childhood, is characterized by immoderate worry and stress about daily life events that the child is not able to control effectively. That anxiety is expressed on most days and has a duration for at least 6 months, and also there is an extended distress or difficulty in performing everyday processes (Gale & Millichamp., 2016).
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