Brenda owns “Brenda’s Widgets, Inc.” (“BWI”), a corporation located at 123 Main Street, Podunk, Iowa. Her company manufactures and distributes widgets. Jim owns a hardware store at 456 First Street, Secondville, Michigan, that sells widgets. He wants to buy 10,000 widgets from BWI. After Jim consults with Brenda, the parties agree to a price of $5 per widget. Jim comes to you and asks you to draft a sales contract for this transaction.
Since the shipment will not occur for several weeks after the payment, he does not want to pay anything without a written agreement. He asks you to draft a contract for him, bearing the following in mind:
1) He only wants to pay 10% of the purchase price initially and he will pay the remainder after the goods are received.
2) He really needs to have all 10,000 widgets in stock before the summer starts. He therefore is insistent that the contract demand shipment prior to June 1.
3) He wants to make sure that the contract provides that the widgets be shipped to his place of business. He is willing to pay the cost of the shipment.
4) Since Jim is afraid of the high cost of litigation, he wants to make sure that if there is a dispute under the contract, that it will be submitted to arbitration.
5) He is only comfortable with Michigan law and wants to make sure that Michigan law, and not Iowa law, applies to all disputes under the contract.
6) In general, he wants you to draft the contract in the manner most favorable to him (the buyer).
He states that if Brenda doesn’t like some of your language, she can always propose amendments to the agreement. But, in the meantime, protect Jim’s interest as best you can.
Please draft a sales contract for Jim that is consistent with his instructions. You can and should use the form available on the slides and documents page called “Sales Agreement” as a template, which should be modified to fit Jim’s instructions. You may (and are encouraged to) leave out terms that are mere “boilerplate” or irrelevant to the transaction.