Answer to Weekly 3L Bar Question 03/10/08

(C) is the best response, because Pigstyle made no warranty about sterility.  A warranty, as the term is used in the UCC, is a kind of guarantee or promise by a seller of goods that they have certain characteristics.  Where a seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on seller's judgment to furnish suitable goods, the seller is deemed to make an implied warranty that the goods will be fit for such purpose.  If Pigstyle were found to have made an implied warranty that the boar was fit for breeding, Pigstyle would probably lose.

However, a court would decide that no warranty was made here.  The facts state that no express warranty was made.  Nor would there be an implied warranty of fitness for particular purpose, because there is no indication that Breeder "relied on the seller's skill or judgment to select or furnish suitable goods," a requirement under UCC § 2-315 for creation of an implied warranty of fitness for a particular purpose.  If no express or implied warranties were made by Pigstyle, then Breeder assumed the risk of the boar's sterility, and there would be no basis for recovery. 

(A) is not the best response, because the parties stipulated that the fertility of the boar was not known by either party at the time of the sale.  Mutual mistake allows a party to avoid a contract based on a mistake made by both parties.  The Second Restatement imposes three requirements which must be satisfied before the adversely affected party may avoid the contract on account of mutual mistake: (1) the mistake must concern a basic assumption on which the contract was made; (2) the mistake must have a material effect on the agreed exchange of performances, and (3) the adversely affected party must not bear the risk of the mistake.  Rest. 2d § 152.  The basic idea of the last requirement is that the party who knows that his knowledge is incomplete but who elects to proceed anyway must bear the risk that what he doesn't know can hurt him.

Here, none of these requirements is satisfied: (1) there was no "basic assumption" of fertility, since both parties knew that fertility couldn't yet be known; (2) even if there was a "mistake" about fertility, the mistake couldn't have had a "material effect" on the exchange, since both parties must have adjusted to the price to compensate for the fact that fertility couldn't yet be known; and most of all, (3) by proceeding in the face of known uncertainty about fertility, Breeder bore the risk of being wrong in his hopes. 

(B) is not the best response, because no implied warranty was made.  As the discussion of choice (C) covers in more detail, an implied warranty of fitness for a particular purpose is deemed made only where the buyer relies on the seller's "skill or judgment to select or furnish suitable goods."  UCC § 2-315.  Since both parties knew that fertility could not yet be known, and since there is no indication that Pigstyle said anything to indicate to Breeder that Pigstyle believed the boar would likely be good for breeding, there is no evidence of Breeder's reliance on Pigstyle's selection skills.  Therefore, no implied warranty of fitness for breeding was made. 

(D) is not the best response, because no "mistake" was made (whether unilateral or mutual), and because even the existence of a unilateral mistake here would not support recovery.  The same three requirements are imposed for unilateral mistake as for mutual mistake, but in addition, either of two things must be shown: (1) that the mistake is such that enforcement of the contract would be unconscionable, or (2) that the other party had reason to know of the mistake or his fault caused the mistake.

Breeder could not prove a mutual mistake was made, because, as described in the discussion of choice (A), Breeder knew that he didn't know anything about the boar's fertility, and thus did not make a "mistake."  Nor could Breeder show either of the two additional elements needed to prove unilateral mistake: (1) The deal was not unconscionable, since unconscionability is very rare in commercial settings, and since the price here was implicitly set by market conditions, and factored in the risk of infertility; (2) Nor did Pigstyle have reason to know of the mistake:  it was impossible for either party to have known the fertility of a two-month-old boar.