This is a three-hour examination for J.D. students. Any LL.M. student whose native language is not English is entitled to an extra hour.

There are three questions: You should answer any two of the three questions. When calculating the final grade, I will give each of your two answers equal weight.

This is an open-book examination. During the examination you may consult any written materials except materials checked out of the reserve section of the law library.

Read each question carefully and follow the directions. Think before you write. Organize your answer and emphasize those points you think are most significant. If you find an ambiguity or if you need more facts, make reasonable assumptions and state these clearly in your answer. Be concise. Be clear. If you find yourself under time pressure, outline the points you wish to make with relevant citations to the U.N. Sales Convention. Good luck!

Société Lorraine des produits agricoles is a French company that distributes fresh agricultural products throughout France. Agricultural Export Cooperative is a Turkish business enterprise that exports fresh vegetables from Turkey to western Europe.

On Thursday, March 15, Société Lorraine ("the buyer") sent a letter ordering two truckloads of cucumbers from the Turkish cooperative ("the seller"). The order specified that the price was to be the current price for similar products on the Paris wholesale market minus the cost of carriage of carrying the cucumbers by road. It also stated that payment was to be made in French francs at a Paris branch of a specified Turkish bank 30 days after the buyer received an invoice from the seller. Delivery was to be made at buyer's vegetable stall at the principal produce market in Paris.

Upon receiving the letter from the buyer on March 19, the Turkish seller promptly loaded two trucks with cucumbers. The trucks left the cooperative warehouse in Turkey on March 20 and arrived in Paris early in the morning on March 23. Before accepting delivery, the buyer's local manager examined a dozen cucumbers in one of the trucks and gave no indication that he was dissatisfied. When buyer took delivery of the cucumbers after this inspection one of the drivers handed over to the buyer's manager an invoice. At the bottom of the invoice there were two statements: (1) payment is due in two weeks, and (2) any dispute is to be resolved under Turkish law. Without reading the invoice, the manager accepted the invoice and later that day turned it over to the cooperative's accountant for payment.

The buyer's employees immediately unloaded the two trucks into a local warehouse. The following day the same employees brought out one-half of the cucumbers to place in the market stall. When placing them in the open air the employees discovered that twenty percent of the cucumbers were covered with a fungus that made them inedible. The buyer concluded that the fungus must have begun to grow on the cucumbers before they left Turkey. The buyer immediately faxed a message to the seller stating that twenty percent of the cucumbers delivered were covered with fungus and that the buyer "rejected" these cucumbers. The seller responded two days later with a fax saying that the buyer should dispose of the non-conforming cucumbers on behalf of the seller. Before receiving the seller's fax, the buyer had destroyed the non-conforming cucumbers.

On April 9 the Paris manager of Société Lorraine, the buyer, consults you about the buyer's rights and obligations under the circumstances just outlined. Advise Société Lorraine.

Shanghai Hotel Joint Venture is a Chinese business enterprise with 20 percent foreign ownership and several places of business in China. Wishing to purchase large central heating/air conditioning units for hotels it is now building, the joint venture entered into a contract for the purchase of four units from Westinghome Electric Company, an Illinois corporation with its place of business in the United States. The price of each unit is US $ 60,000. The contract provides for delivery of the units "CIF Shanghai (Incoterms 1990)" and for payment by letter of credit opened by the Bank of China. The units are to be delivered in four separate shipments with two months separating each shipment (i.e., January 1, March 1, May 1, and July 1). The contract does not designate the applicable law, but it does provide that disputes are subject to arbitration in Hong Kong.

Westinghome loaded the first unit on a ship in Tacoma, Washington, on December 10 and the unit arrived in Shanghai on December 31. Without inspecting the unit, the Shanghai joint venture transferred the unit to another ship for delivery to the cooperative's new hotel it has built in southern China. The other ship delivered the unit to the new hotel January 10.

The local joint venture employees promptly installed the unit but had difficulty getting the unit to work. The local manager sent a telex to Westinghome stating that it was unable to make the unit work but giving no details. Westinghome promptly responded with several telexes requesting details.

On January 27 the Chinese joint venture sent a telex stating that the control system did not function and requesting that Westinghome send engineers to repair the unit. Westinghome immediately responded by telex that it would not send engineers because of the cost, but would send by air freight a new control system that could be installed by the joint venture's employees.

On February 2 the joint venture replied by telex that it did not have employees with adequate training to install the substitute control system. The joint venture telex also stated that it would avoid the contract if Westinghome did not send employees to install the control system.

The same day Westinghome sent a telex stating that it had sent the control system by air freight; that it had loaded the second unit on a ship in Tacoma and had presented the bill of lading and other documents to the bank for payment under the letter of credit; and that Westinghome demanded prepayment of the other two units before it shipped them.

The following day, the Chinese joint venture telexed Westinghome that it was canceling the contract and that it would buy the units from another supplier. It stated that it would not accept delivery of the second unit but would sell both the first and second unit as agent for Westinghome unless otherwise instructed.

Westinghome immediately consults you for advice on its present legal position. Advise Westinghome.

California Computer Software Company is a California corporation with its place of business in Los Angeles. The company is interested in developing its business through electronic commerce. It has established a web page which allows potential buyers to order specific software developed by the California company. The software is delivered by downloading onto the buyer's computer hard drive the software programs purchased. Payment is made by sending an internet message giving a credit card number and stating that the California company is authorized to have the purchase price charged to buyer's credit card. At the bottom of the order form on the seller's web page is a statement that the sale is subject to the seller's General Conditions. To read the General Conditions, the buyer may click on an icon at the bottom of the order form. The General Conditions provide that the seller makes no representations as to the quality of the goods, that the buyer's exclusive remedy for any damage to the buyer caused by purchased software is limited to return of the purchase price, and that the buyer may not recover consequential damages.

Basic Concepts GmbH is a German business enterprise with its place of business in Germany. Wishing to purchase the California company's software on behalf of Basic Concepts, an employee of Basic Concepts completed the order form on the web page and sent it electronically to the seller. The employee did not read the seller's General Conditions. When the seller's computer system received the order and the credit card information, the seller's computer sent the relevant software to the buyer's computer in Germany.

Unfortunately, unknown to the California company, the program sent to Basic Concepts was infected with a virus. On April 1, one week after ordering and receiving the software, Basic Concepts found that all the files on its computer's hard drive had been destroyed by the virus. Some of these files related to a bid to provide computer services to the German Ministry of Defense. The loss of the files delayed Basic Concepts bid beyond the deadline for submitting bids.

Basic Concepts promptly notifies--by express mail--the California company that the Germany company claims damages for the losses caused by the virus, including its losses by not being able to make the bid. The letter from Basic Concepts expressly states that the seller's General Conditions are not enforceable under the German law regulating standard terms.

The California company asks you for advice on its legal position with respect to the claim of Basic Concepts. Advise the California company.