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 two questions. You should answer both questions. When calculating the final grade, I will give each answer 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!

Brooklyn Bottling Company (BBC) is a company incorporated in New York and with its only place of business in Brooklyn. It bottles and distributes non-alcoholic drinks in New York. BBC now plans to expand its bottling plant and therefore proposes to buy a new machine to cap the bottles. The manager of BBC saw several bottle capping machines demonstrated in a trade fair held in New York.

You will no doubt be surprised to learn that the manager decides to buy a machine manufactured by Soci‚t‚ Ballard, a firm established under French law and with its headquarters in Rouen, France. The manager signs a purchase order form, printed in the English language, which specifies the equipment model ordered, the quantity (one machine), and delivery terms (C.I.F. [Incoterms 1990] New York). The blank for the price states: "Catalog price as displayed in NY." On the front of the purchase order form below the signature line is the following printed statement: "BUYER OBJECTS TO ANY TERM PROPOSED BY SELLER THAT DIFFERS IN ANY WAY FROM THE TERMS OF THIS PURCHASE ORDER." On the back of the purchase order form there are several printed terms, one of which states: "When accepting this order, the seller agrees that it will extend to the buyer its standard warranties as to the quality of the purchased goods without any disclaimers other than those disclaimers to which the buyer specifically agrees." The manager promptly mails the form to the seller in France.

Soci‚t‚ Ballard responds promptly on an order acknowledgment form, printed in the French language, which specifies the equipment model ordered, the quantity (one machine), and delivery terms (C.I.F. [Incoterms 1990] New York). As for the price, the form states "812,000 French Francs". This is not the same as the catalogue price, which was 800,000 French Francs, but is approximately the catalogue price plus the freight from a French port to the port of New York. On the front of the form, there is a printed statement which in English translation states: "To the extent permitted by the law of the buyer's place of business, the seller sells this equipment subject to the representations made in the seller's standard terms printed in its most recent catalog." Soci‚t‚ Ballard promptly mails this form to BBC.

The manager of BBC files the form from Soci‚t‚ Ballard without attempting to translate the printed text and without responding. Soci‚t‚ Ballard hands over the equipment to an ocean carrier in a French port within the time specified by the forms. BBC takes delivery of the equipment in New York and sets it up in its plant. The machine caps 9,200 bottles per hour. BBC complains to Soci‚t‚ Ballard that the catalogue states that the machine can cap 10,000 bottles per hour. Soci‚t‚ Ballard responds that there is also a statement (in the French language) that it is not responsible for "variations of less than 10 per cent in the estimated bottle capping capacity of any particular machine."

Do BBC and Soci‚t‚ Ballard have an enforceable contract, and, if so, what are the terms of that contract?

A New York importer of wine and an Argentine exporter of wine agreed to a contract of sale for 20,000 gallons of red wine produced by specified Argentinian wineries. The sales contract provided that the price of US $ 240,000 was to be paid by means of a letter of credit opened by a specified bank in New York. The delivery term stated that delivery was to be "CIF New York."

The exporter had the wine loaded into four containers usually used to transport wine by sea and delivered them to the carrier in Buenos Aires, Argentina. Promptly after receiving the bill of lading, the exporter presented to the New York bank the bill of lading and a sight draft drawn on that bank. The bank paid the draft and, on receiving reimbursement, delivered the bill of lading to the importer. The importer presented the bill to the carrier, which handed over the four containers.

Two days after taking delivery, the importer examined the wine in the four containers and discovered that wine in one of the containers was "musty" and therefore undrinkable. The importer immediately sent a fax to the exporter explaining the problem and stating that the importer avoided the contract. Within five days the importer sold the three containers to another wine merchant for $150,000 and the "musty" container to a producer of vinegar for $5,000. Almost immediately after the sale the importer received a fax from the exporter requesting an opportunity to examine the wine. The importer immediately replied by saying that this was no longer possible because the wine had been sold.

The exporter consults you and asks the following questions:

1. Did the importer have the right to avoid the contract?
2. Did the importer effectively avoid the contract?
3. If the answer to either of the previous questions is no, what remedies does the exporter have?
4. If, however, the importer effectively avoided the contract, what damages may the importer have? The exporter explains that he has learned the following facts: