Sample Bar Exam Questions with Answers

(Reprinted with permission from the State Bar of California)

Question 1

Lee, who had been a party in a bench trial before Judge Bright, was dissatisfied with the outcome of the case. After the
trial was concluded, Lee held a press conference and told Reporter:
“Judge Bright is a very unfair judge. In a recent trial in which I was involved in his court, he clearly didn't understand
what was going on. I've heard he's often drunk on the bench.”
These remarks were published verbatim in the local newspaper. Judge Bright lost his bid for reelection. Judge Bright
sued Lee and Reporter for defamation, alleging that he lost the election as the result of the publication of Lee's remarks.
Both defendants moved to dismiss on the ground that the complaint failed to state a cause of action for defamation. The
court denied the motion.
Attorney offered to act as a consultant to Lee and Reporter. He agreed to advise them on law and strategy and to help
them prepare their case and obtain expert witnesses. He also offered to be an expert witness, but said he would not be
their lawyer in the actual trial.
Lee and Reporter agreed to hire Attorney and to pay him for his services, both as a consultant and as an expert witness,
a contingent fee based on the outcome of the case.
At the trial the court ruled (a) that Lee's statements about judge Bright were not defamatory; (b) that, in any event, both
Lee's statements and Reporter's publication of the statements were privileged; and (c) that, as a matter of law, Judge
Bright did not suffer any damage.

1. Were each of the trial court's rulings correct? Discuss.

2. What, if any, ethical issues arise as a result of the terms under which Attorney undertook to assist Lee and Reporter?
Discuss.
 Answer to Question #1

1. Trial court's rulings.

Before addressing the trial court's three specific rulings, it is helpful to consider generally the elements of defamation --
the tort on which Judge Bright is suing.

Defamation consists of (i) a defamatory statement of fact, (ii) of or about the plaintiff. (iii) in an intentional or negligent
publication, that (iv) causes damage. Here, factor (ii) is not in dispute --Lee mentioned Judge Bright by name in his
remarks to Reporter, which were published verbatim. Nor is there really any issue here as to element (iii) --Lee
"published" the information by telling a third party, namely, Reporter, and Reporter published it in the local newspaper.

Were Lee's statements defamation?

The trial court ruled that Lee's statements were not defamatory .The trial court was, at least in part, incorrect.

As indicated, a statement is defamatory if it is a statement of fact that somehow relates to the plaintiff’s reputation. Lee
made three separate statements to Reporter. He first told Reporter that Judge Bright “is a very unfair judge”. The trial
court was correct that this was not defamatory. Firstly, it is essentially a pure statement of opinion. It is not a statement
of fact. It is the type of statement that people make all the time about judges, especially in connection with elections.
Although a lawyer, as an officer of the court, should probably avoid making such a statement, Lee was simply a party
to a trial before Judge Bright, and is free to make such a statement. Secondly, it is probably not a defamatory statement,
because whether Lee believes Judge Bright to be very unfair does not directly injure Judge Bright's reputation. The
statement merely reflects Lee's overall opinion of Judge Bright, and does not cast direct doubt on his ability or
integrity, at least standing alone.

Lee's second statement to Reporter was that in the bench trial involving Lee, Judge Bright “clearly didn't understand
what was going on”. The trial court again correctly determined that this statement was not defamatory. Again, this is
essentially an expression of Lee's opinion, although here it does relate to one particular trial, rather than to Lee's overall
opinion of Judge Bright. But for that reason, the statement is less defamatory than the first statement discussed above --
it merely reflects that in one particular trial, Judge Bright didn't understand the case. This is often true of judges who
have little time to deeply understand every case that comes before them. Although an attorney would probably have to
be more circumspect in making such statements, Lee was free to do so.

The trial court incorrectly ruled on Lee's third statement. Lee's third statement was that Lee heard Judge Bright is often
drunk on the bench. This is a statement of opinion, like the first two of Lee's statements. Moreover, this does directly
relate to Judge Bright's reputation and character. A charge that a judge is drunk on the bench and simply not giving his
attention to the cases before him is quite serious and directly related to the judge's character. Therefore, the trial court
incorrectly decided that this statement was not defamatory.

Were the statements Privileged?

The trial court ruled that the three statements discussed above, even if they were not defamatory, were privileged. The
trial court was incorrect.

Privilege as to Lee. Lee might try to assert one of several privileges. First, Lee might argue that his statements were
protected by a judicial proceedings privilege. Statements made in connection with a judicial proceeding (e.g.,
statements of a witness, or statements of lawyers in opening or closing arguments) are absolutely privileged. There is
good reason for this privilege to exist -- otherwise, the courts would be clogged with countless defamation claims based
on charges made during the conduct of civil trials. However, here, although Lee was a party to a case before Judge
Bright, he made his statements (i) after the case was over and (ii) not to the court, but to a reporter. The judicial
proceedings privilege will not attach under these circumstances, because the statements were not made in connection
with an ongoing proceeding. (The result would be different had Lee shouted his opinions from the witness stand.)

Second, Lee might argue that he is protected by the "interested in the transaction" privilege. If a defendant has a
legitimate interest in a transaction, he may be privileged if he makes certain comments. For example, this type of
privilege may apply if an employer gives an employment reference for a former employee. Here, Lee might argue that
he was interested in the case before Judge Bright (he was a party, after all), and that therefore this privilege attaches.
However, Lee would be wrong. The case before Judge Bright is over, and anyway Lee made the statement not to
someone who requested honest information but to Reporter at a press conference that Lee himself called. Therefore,
this privilege will not protect Lee.

Lee will also argue a constitutional privilege. Under New York Times a public official in a defamation claim must
prove both (i) falsity and (ii) actual malice. Actual malice means that the defendant knew that the statement was false,
or recklessly disregarded its truth or falsity.
As a preliminary matter, there is a question whether New York Times will apply to Lee. Lee is an individual, and the
New York Times standard is usually applied to media defendants.

Assume that the standard does apply to Lee. Lee's first two statements, as discussed above, were not even defamatory.
His third statement (“I've heard he's often drunk on the bench”) was defamatory. In order for the judge to succeed on
his defamation claim, he must show both falsity and actual malice. There is no indication in the facts given that Lee
was in fact true regarding this charge. Therefore, it appears that Judge Bright will be able to establish the falsity of the
statement. (Judge Bright, as a public official, does come under the New York Times standard.)

Judge Bright will probably also be able to show that Lee recklessly disregarded the truth or falsity of the statement.
This is not an objective standard, but a subjective one -- did the defendant have evidence that tended to indicate that his
statement was, in fact, false? Here, Lee participated in a bench trial before the judge. He did not himself notice that the
judge was drunk at his trial. Rather, he simply "heard" from unnamed sources that the judge was often drunk. Given the
unreliable nature of this information, and given Lee's firsthand knowledge of the Judge's behavior (where the judge
apparently was not drunk), Lee acted with reckless disregard of the truth or falsity of his statement.

Privilege as to Reporter. For the same reasons as discussed above in connection with Lee, the judicial proceedings
privilege and the interested in the transaction privilege will not apply.

Reporter may also argue that he was protected by the fair and neutral reporting privilege. This privilege protects a
journalist who simply reports what is said at a public meeting, if he does so in a fair and neutral manner. Reporter will
not succeed on this privilege claim. Lee's statements were made at a private press conference, not a public meeting.
The analysis for the constitutional privilege is largely the same as above, for Lee. Here, the New York Times standard
clearly applies to Reporter, who is a media defendant. However, it is not clear that Reporter knew that the statement
about the judge's drinking was false. Moreover, unlike Lee, who had personally observed the judge in a trial, the
Reporter apparently had not. Although it may objectively be unreasonable for a reporter to relate the hearsay statements
of his source, it cannot be said that Reporter was subjectively aware of information that would tend to show that the
statement was false. Therefore, as to Reporter (but not Lee), the constitutional privilege does apply.

Did the Judge suffer any damage?

In a libel case, special damages need not be proven. In a slander case, special damages must be proven, unless the
slander is a slander per se.

Here, Lee's initial statement was slander, because it was delivered orally. Thus according to the general rule, the judge
would have to prove special damages here.

However, the statement also constitutes slander per se. It relates to the judge's ability to carry on his profession in a
sober manner. This is one of the categories of statements that is considered to be slander per se. (It might also be
characterized as a statement tending to reflect moral turpitude on the part of the judge, but this is probably too great a
stretch.)

As to Reporter, Reporter's publication in the local newspaper was libel. Judge Bright does not need to show special
damages for libel.

Special damages consist of an actual injury to business, a contract, etc. Here, the judge would argue that he lost the
election, and these are special damages, even if special damages needed to be proven. However, they do not, so the
judge will be able to maintain his defamation claim.

It should be noted that the judge may continue to try to seek damages for his loss of a job. However, it is fairly
speculative to say that Lee's statement caused this particular injury. Unless the judge can produce evidence at Trial that
his injury was actually caused by the statement, he may not be able to recover for his lost job.

2. Ethical issues involving Attorney. [Editor’s note: Professional Responsibility issues may arise and should be
explored in answers to questions on the California General Bar. They should not arise and/or need not be explored in
questions on the California First Year Law Students’Examination.]

A preliminary issue is who, if anyone, was Attorney representing? Attorney indicated that he would not be the trial
attorney for the case. He therefore may argue that he was merely a "consultant" and not subject to any ethical
obligations.

Attorney's argument here will be rejected. Attorney met with Lee and Reporter about their case. He received
confidential information from the defendants communicated to aid in their case. Furthermore, he agreed to "advise
them on law and strategy and to help them prepare their case." This is clearly the role of an attorney. Attorney was
acting as a lawyer for Lee and Reporter, and cannot get around the ethical rules and obligations by calling himself a
"consultant."

Attorney offered to be an expert witness at the Trial. Because Attorney really is an attorney for Lee and Reporter, this
raises a potential conflict of interest issue, namely, that a lawyer was serving as a witness. This may confuse the fact
finder.

Under the ABA rules, a lawyer may nevertheless be a witness if (i) his testimony relates to a minor, undisputed matter,
(ii) his testimony relates solely to the fact of representation, (iii) not being a witness would cause undue hardship to a
client, or (iv) the other side simply may call him as a witness (but if the other side does and his testimony will be
prejudicial, he must withdraw). Here, it does not appear that Attorney's expert testimony will relate to minor,
undisputed issues or solely to the fact of representation. He will apparently be called in the case-in-chief for Lee and
Reporter, so (iv) does not apply. The facts do not indicate that Attorney is needed as a witness to avoid undue hardship.
Therefore, it is inappropriate for Attorney to function as an expert witness.

Under the California rule, which applies only to jury trials, Attorney can testify under (i) and (ii), above, which as
indicated do not apply. He can also testify if he discloses the conflict to his clients and gets their written consent.
Attorney did not do so here, so has violated an ethical obligation.

Attorney is being paid on a contingency fee basis. Again, it is for his services as an attorney, although he has
characterized himself as a consultant and a witness. Contingency fee arrangements are acceptable, but they must be in
writing, they must state the contingency percentage, and they must state how expenses are to be calculated.
Furthermore, in California, they must advise the client that the fee is negotiable. Attorney did none of these things here,
so is in violation of his ethical obligations.

Attorney is representing both Lee and Reporter. An attorney may represent multiple parties, despite a conflict or
apparent conflict, if (a) it is reasonable to do so, (b) he discloses the conflict, and (c) gets (written) client consent. At
the outset of the lawsuit, it was probably acceptable for Attorney to meet jointly with Lee and Reporter and agree to
work with both of them. As discussed above, the claims and defenses against Lee and Reporter are quite similar.
However, also as discussed above, Reporter, who had no first hand knowledge of Judge Bright, may be able to succeed
on his constitutional privilege claim, because he did not act with reckless disregard to truth or falsity. Lee does not have
this claim. There is thus a potential conflict between Lee and Reporter. It may not be serious enough to prevent outright
the joint representation, but at the very least Attorney should have followed the disclose/consent procedure. Attorney
did not do so, and is therefore in violation of another ethical rule.

Finally, Attorney indicated that he would not represent Lee and Reporter in the actual trial. In some sense, Attorney
withdrew from active representation, although he still offered his services as an "expert." An attorney can withdraw
from a representation, but should not do so if it will materially prejudice his client's case. Here, Attorney indicated at
the outset that he would help up to trial, so he probably can permissibly avoid being trial counsel. However, Attorney
has an obligation to help Lee and Reporter find adequate trial counsel in time for that counsel to prepare for the case.
Attorney also must turn over his clients' files to the trial attorney so that he can act as an attorney for the trial.

If Attorney did not help Lee and Reporter find suitable trial counsel, and/or he did not turn over his files to trial counsel
prior to trial, then Attorney will have breached yet another ethical obligation.
 Question 2

Al, Bob, and Charlie planned to bring 50 cases of whiskey ashore from a ship anchored in the harbor near their town
and sell it to a local bar owner. They believed the whiskey had been produced abroad and was subject to a federal
import duty. They also knew that smuggling items into this country without paying duty required by the Tariff Act is a
crime. In fact, however, the whiskey in this shipment had been produced in the United States.

The three met at Al’s house on Monday and agreed to bring the whiskey ashore by rowboat on Friday night. On
Wednesday, however, Bob called Al to say that he and his wife were going to visit relatives that weekend and Bob
would not be able to help bring the whiskey ashore. Al said that was all right, that he and Charlie could handle the boat
and the whiskey, but that Bob would naturally be cut out of the profits on this job.

When Charlie learned from Al that there would be just the two of them he became apprehensive, but he was afraid of
what Al might do to him if he tried to back out. Therefore, on Thursday, Charlie informed the police of Al's plan and
did not show up on Friday night. Al was arrested on Friday night as he came ashore, alone, with the whiskey and was
loading it into a truck he had stolen from a nearby Coast Guard parking lot.

Al, Bob, and Charlie have been charged with theft of the truck and conspiracy to import dutiable goods without
payment of duty.

Al has also been charged with attempt to import dutiable goods without payment of duty. He has told Len, his attorney,
that he plans to testify that he knew all along that the whiskey was produced in the United States.

Based on the above facts:

1. Should Al, Bob or Charlie be convicted of:

(a) Conspiracy to violate the Tariff Act? Discuss.

(b) Theft of the truck? Discuss.

2. Should Al be convicted of attempt to import dutiable goods without payment of duty in violation of the Tariff Act?
Discuss.

3. If Al insists on testifying that he knew the whiskey was produced in the United States, what, if anything, should
Len do? Discuss.
 Answer to Question #2

1. Al, Bill, and Charlie's Liability/Culpability

a) Conspiracy
The crime of conspiracy requires (1) two or more people with (2) intent to agree and (3) intent to commit a crime.
Furthermore, in most jurisdictions, an overt act is also required
for the crime of conspiracy. Whether Al, Bill, and Charlie (ABC) can be convicted of conspiracy depends on whether
the requisite elements are met.

The first element is met because the agreement was between three people A, B, and C.

The second element, intent to agree, has also been met. A, B, and C planned to bring 50 cases of whiskey ashore. The
three met at Al's house on Monday and agreed to bring the whiskey ashore on Friday. The facts explicitly state that the
three agreed, thus this element is met.

The third element, intent to commit the crime is the more troubling element. A, B, C agreed to bring ashore 50 cases of
whiskey that they believed were produced abroad and subject to a federal import duty. Further they knew that
smuggling items into the country without
paying the duty required by the tariff act was a crime. Based on this information alone, they all intended to commit a
crime and it appears all are guilty of conspiracy.

Mistake of Fact

However, A, B and C were mistaken about the origin of the goods. The whiskey was not produced abroad but rather
was produced in the U.S. Therefore, the whiskey was not subject to a federal import duty. Because of their mistake of
fact, A, B, and C were conspiring to commit an act that was not a crime in actuality.

For purposes of conspiracy, however, mistake of fact is not a sufficient defense. Had the whiskey been produced
abroad, as they believed, smuggling it in without paying a duty would have been a crime.

Overt Act

For conspiracy in most jurisdictions, an overt act in furtherance is required. When A stole the trucks from the parking
lot for the loading of the whiskey this element was met.

Culpability and Withdrawal once a Conspiracy is established

A conspirator cannot withdraw from the conspiracy itself, but can effectuate withdrawal from future crimes committed.

B and C both attempted to withdraw from the conspiracy and whether or not they successfully withdrew determines
whether they can be convicted of the theft of the truck.
However, their attempts at withdrawal took place after the three requisite elements of conspiracy were met and thus A,
B, and C can be convicted of conspiracy unless this jurisdiction requires and overt act. In that case, B can not be
convicted of conspiracy because he withdrew before A stole the truck. On the other hand, it may be enough that the
three met at Al’s house to make the plans. The same reasoning applies to C.

Despite this point, it is most likely that all three can be convicted of conspiracy.

b) Theft of the truck

While A, B, C can all be convicted of conspiracy, only A can be convicted of theft of the truck.

Co-conspirators are liable for the acts committed by other co-conspirators if the acts are committed in furtherance of
the conspiracy.

Here, A stole the truck because it was needed to load the whiskey once brought to shore. If C and B were still involved,
each could be convicted of theft. However, B and C had effectively withdrawn.

Withdrawal.

To withdraw from a conspiracy, a person must communicate that he is withdrawing before it is too late. It must be at a
point where the plan could be abandoned.

B called A on Wednesday and told A that he could not participate because he was going out of town with his wife. A
accepted B's withdrawal and told him that he and C could handle it alone and that B naturally would be cut out of the
profits. A's response indicates that he recognized and accepted B's withdrawal. Further, this was two days beforehand
and the plan could have been abandoned. Thus B is not liable for the theft of the truck.

Similarly, C also attempted to withdraw. And although C did not tell A expressly, C did not show up Friday, at which
point A still could have abandoned. C went further in his withdrawal and notified the police. C's effort to stop the
conspiracy from succeeding is enough for his own withdrawal and thus C is not guilty of theft of the truck. A, however,
stole the truck himself and therefore can be convicted of theft.

2. Should A be convicted of attempt to import dutiable goods without payment of duty in violation of Tariff Act?
A person cannot be convicted of an act that is not a crime. However, that person may be convicted of attempt if the
reason it was not a crime is mistake of fact.

Mistake of Fact vs. Mistake of Law

If A had believed that failure to pay a duty on the whiskey constituted a crime but in fact it did not, A could not be
found guilty. This is mistake of law.

However, in this case, A believed the goods were produced abroad and therefore subject to a duty, the failure to pay
such duty constituting a crime. A is correct in all his beliefs except the fact that the goods were produced in the U.S.
and, therefore, not subject to the federal duty.

While A couldn't be convicted of the crime of not paying the duty, he can be convicted of attempt.

Specific Intent

Attempt is a specific intent crime and requires that A specifically intended to commit the crime. A believed the whiskey
was produced abroad and intended to smuggle it in without paying a duty. Thus A had specific intent.

A's mistake of fact does not relieve him of culpability for attempt. He attempted to commit a crime.

He had the specific intent for attempt and also committed an act in furtherance of the crime. He stole a truck, went to
the ship and brought back the whiskey.

A can be charged with attempt here.

Merger

There is no merger for conspiracy and thus A can be convicted of both conspiracy and attempt.

4. Len's ethical duty . [Editor’s note: Professional Responsibility issues may arise and should be explored in answers
to questions on the California General Bar. They should not arise and/or need not be explored in questions on the
California First Year Law Students’Examination.]

As an attorney, Len is subject to strict ethical duties owing to his client, the court and the public.

He has a duty of candor and truthfulness to the court, which requires also that he not assist in hiding evidence and that
he makes an effort to seek the truth.

L cannot assist in a crime. Perjury is a crime and thus L must not aid A in committing perjury.

L also has duties to A as his client. L must act competently, which includes following the rules and procedures of court.
Therefore L should counsel A that if A testifies, A must tell the truth. He should advise A of his Fifth Amendment right
against self-incrimination but should A insist on testifying, which is the client's decision, L must advise him to tell the
truth.

If A refuses to take L's advice, L's options depend on whether he is subject to California law or the ABA.

The ABA allows L to tell the judge about his client's perjury. L can violate his client's confidentiality in such a case to
prevent the perjury.

In California, L cannot tell the judge but is required not to help A in his perjury. Thus L can allow A to take the stand
but cannot ask A questions to help A' s perjury. Essentially A will just narrate on the stand.

If L learned of the perjury after A's testimony L would have to advise A to recant.
 Question 3
In January, in response to an inquiry, Seller sent Buyer a letter offering to sell 10,000 tires, assorted sizes to be selected
by Seller and delivered at the rate of 1,000 each month for ten months. This letter stated the price for each size and
specified that payment was due on delivery of each shipment. Buyer sent a letter agreeing to purchase 10,000 tires,
assortment to be specified by Buyer. Buyer's letter contained its standard provision that any disputes arising under the
agreement were to be resolved by commercial arbitration. The letter also contained Buyer's specification of the size
assortment for the first month's shipment of tires.
On February 1, Seller's driver arrived with the first installment, which consisted of the assortment specified in Buyer's
letter. The driver left the tires without asking for payment. Four days later Buyer sent Seller a check for the first
installment and a letter specifying the assortment for the second installment. On March 1, Seller's driver arrived with
the second installment, again containing the assortment specified in Buyer's letter. Again the driver left the tires without
getting payment.
Three days later Buyer sent a check for the second installment and specifications for the third installment. On April 1,
Seller's driver arrived, but the assortment was not exactly what Buyer had specified. Buyer accepted the tires anyway
and seven days later sent a check for the third installment, along with specifications for the fourth installment.
On May 1, Seller's driver arrived, again with an assortment that was not exactly what Buyer had specified. Buyer
agreed to take delivery, but Seller's driver insisted on payment. When Buyer was unable to pay, Seller's driver refused
to leave the tires and took them back to Seller's warehouse.
Buyer called Seller to complain about the driver's refusal to leave the tires and insisted upon immediate redelivery.
Buyer said he would pay ''as usual, a few days after delivery." Seller refused and told Buyer, "If you don't like it, why
don't you take me to arbitration? Buyer replied, "Look, I have no intention of arbitrating this dispute. But I'm not
accepting that last shipment unless it meets my specifications precisely and unless you allow me the same leeway for
payment as with past shipments."
Seller sued Buyer for breach of contract. Buyer simultaneously filed a counterclaim against Seller and moved the court
for an order staying the suit and compelling arbitration. Seller opposed the motion.
1. How should the court rule on the motion for an order staying the suit and compelling arbitration? Discuss.
2. What are the rights and obligations of Seller and Buyer, and who should prevail on the merits of the litigation?
Discuss.

Answer to Question #3

The UCC, Article 2, applies to the sale of goods. Also, special UCC rules apply when Seller and
Buyer are merchants who deal in goods of the kind transacted.

Here, UCC and merchant rules apply because tires are goods and the quantity involved suggest
both seller and buyer deal in tires.

1. Should Court Order Arbitration?

The court should order arbitration only if the arbitration clause was a term in a valid contract
between Buyer and Seller.

A valid contract must consist of (1) an offer manifesting intent to a reasonable person to be
bound by acceptance (2) acceptance (3) consideration or a substitute. Also, under the UCC, the
terms must state the parties and the goods involved, although quantity and price may be left
open.
Offer
This letter, although it does not have language stating how acceptance might be made, is
characterized as an "offer," with intent to sell goods as set forth in the letter. This offer does not
contain language expressly limiting acceptance to the terms of the written offer.

Acceptance
Can be made in any reasonable manner, where none is requested. Here, Seller responds with a
letter indicating agreeing to purchase tires from seller.

Consideration: payment for goods is consideration

Terms: Under common law, the mirror image rule states an acceptance must mirror, or reflect
identical terms of an offer. Under the UCC, however, between merchants, an acceptance can
create a contract even though additional or different terms are stated. (2-207) Such terms will be
part of the contract unless: 1. they materially alter the agreement, 2. offer expressly limits
acceptance to terms of offer, 3. other party objects within a reasonable time.

Here, the offer contained no expressly limiting language. The arbitration clause was an addition
which likely does not substantially alter the terms of the parties' agreement. Seller did not object
to the clause, in fact, Seller is trying to enforce it.

Thus, the arbitration clause is enforceable as term in a valid contract and is enforceable here
because the dispute has arisen as to payment and conforming shipments under the contract.

2. The Rights and Obligations of Buyer and Seller Depend on Contract Terms and
Performance Under the Contract.

A. TYPES OF TIRES
a. Terms: As discussed above, a valid contract exists. Seller's offer stated that it could select the
sizes to be delivered. Buyer's acceptance stated that it could select the sizes to be delivered and
so specified.

Per the 2-207 discussion above, Buyer's acceptance states a term that would materially alter the
contract by affecting the type of goods involved, which goes to Buyer and Seller's willingness to
have entered into the contract in the first place.

Such a material alteration would knock out the tire-type language. This language could be filled
by trade usage or, even better when possible, the actions of the parties.

b. Performance: Here, the first two installments conformed with Buyer's specifications. This may
suggest that Seller was aware of and had agreed to deliver tires to Buyer's stated specifications. If
so, this performance indicates that Buyer's specifications control.
However, it is more problematic if two deliveries to Buyer's specification were merely
coincidence, which is not very likely.

If so, look to tire retailing custom to see whether Buyer's usually select the type they want.

Obligations: If Buyer's specifications control, Buyer is entitled to reject a nonconforming

installment and withhold payment for that installment. As to the April 1 installment, Buyer is not
entitled to any damages because he accepted an installment he knew was nonconforming.

Regarding Buyer's rejection of the May 1 installment, Buyer is only entitled to sue for breach for
a nonconforming installment if Buyer's selection terms control. Because Buyer's acceptance
stated specifications and the first two installments conformed to Buyer's needs, and Seller never
notified Buyer of its desire to not accept Buyer's changed term, Buyer is able to sue for breach on
the May 1 nonconforming shipment. Buyer's acceptance of one nonconforming shipment does
not waive his right to receive conforming shipments for the remainder of the installment
contract.

PREVAIL: Buyer will prevail regarding nonconforming shipment on May 1.

B. SELLER'S RIGHT TO PAYMENT ON DELIVERY

a. Terms: Seller's offer stated payment was due on delivery. Buyer's acceptance was silent.
Thus, Seller's term controls.

b. Performance: Although contractually entitled to payment on delivery, Seller accepted payment

after delivery on three straight deliveries, during which the driver never asked for payment on
delivery until the 4th installment. Because Seller had allowed late payments for 30% of the total
payments, Seller has likely waived his contractual right to payment on delivery.

c. Obligation: Thus, Buyer was not contractually obligated to pay Seller on delivery. Buyer was
not in breach and thus, Seller is responsible for providing Buyer with a conforming shipment for
May 1st.

d. Prevail: Seller will not prevail on breach of contract for buyer's failure to pay on May 1st
delivery.

CONCLUSIONS:

1. Seller can force arbitration clause

2. Buyer entitled to tires of his specifications
3. Buyer not entitled to damages for April 1st installment
4. Buyer did not breach by failing to pay on May 1st
5. Seller not excused from providing conforming May 1st shipment