Contract Analysis

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Words: 1505

Pages: 7

Category: Business and Industry

Date Submitted: 05/28/2013 12:38 PM

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Part A:

1. The seller is Sunrich Foods Inc. and the buyer is Nutrisoya Foods Inc.

2. Based on the contract, the seller Sunrich Foods Inc. is not a merchant because a merchant trades items produced b y others to return a profit and Sunrich actually manufactures and packages the rice-based beverages. They do buy ingredients for the products they produce but since they are using them directly they would not be considered merchants.

3. The buyer is a merchant because Nutrisoya is buying the product from Sunrich foods to sell under another brand name, Rice-Um, which is owned by Nutrisoya. They are therefore making a profit off of the items produced by Sunrich.

4. Sunrich wants entitlement of the Intellectual Properties because they do not want to lose any profits or patents or trademarks that might come up while working with Nutrisoya. Sunrich wants to ensure any ideas, slogans, recipes or anything else the group creates remains in control of Sunrich outside of anything that is against legislative.

5. Nutrisoya is concerned that if there was any sort of quality failure they would not be held responsible. If anything caused damage and resulted in law suits, Sunrich would have to pay for any damages if someone sued or was hurt. If not for this clause Nutrisoya could have legal liability if there was cause to a customer. The biggest liability they would have is negligence. To prove negligence the criteria needed is (1) the manufacturer or seller owed a duty; (2) they breached the duty by supplying a defective product; (3) causation; (4) damages. If their product caused harm to a customer since Nutrisoya is the seller they would be held accountable as well. This clause is enforceable in the court of law because it was placed in the signed and agreed upon in the contract and Sunrich could have had the chance to try to allocate the risk more but chose not to. Section 2-303 is the article where allocation or divisions of risks are allowed in the contract and...