# The Vanishing Warehouse Deal

Canonical: https://www.barprepplay.com/essay-playbooks/contracts-mega/
Byline: BarPrepPlay
Last reviewed: March 12, 2026
Difficulty: Hard
Subjects: Contracts, UCC Article 2, Remedies

## Target topics

- UCC vs Common Law
- Battle of the Forms
- Modification
- Statute of Frauds
- Anticipatory Repudiation
- Seller Remedies
- Impracticability
- Restitution

## Fact pattern

Northgate Supply is a restaurant distributor. On September 4, it sent a purchase order to Riverbend Glassworks, a bottle manufacturer, for 10,000 custom-etched amber bottles at $3.20 each, for delivery on November 15. The purchase order said: "Acceptance is expressly limited to the terms of this order. Any additional or different terms proposed by Seller are hereby rejected."

On September 6, Riverbend sent back its own acknowledgment: "Seller accepts. Delivery is FOB Seller's plant. Any dispute shall be resolved by binding arbitration in Camden, New Jersey. Buyer agrees to a 10% restocking fee on any cancellation." Riverbend began production and Northgate wired a $5,000 advance deposit on September 12.

On October 1, Riverbend's primary furnace cracked. Its plant manager emailed Northgate: "Furnace down; earliest we can complete the run is January 20. Need you to agree to the new date. If you prefer to cancel, we'll waive the restocking fee." Northgate's purchasing lead replied the same day: "OK, agree to January 20."

On December 3, Northgate's new executive chef announced he would source his own bottles. Northgate's purchasing lead emailed Riverbend: "Our chef changed direction. We don't need the bottles. Please return our $5,000."

Riverbend continued production and, on January 20, tendered 10,000 finished bottles conforming to specification. Northgate refused to accept delivery. The custom amber bottles carry Northgate's proprietary logo and have no alternate buyer at anything close to contract price.

Riverbend sues for the full contract price. Northgate counterclaims for its $5,000 deposit and argues (i) no contract ever formed, (ii) any contract was unenforceable for lack of writing, and (iii) the January 20 tender was untimely.

## Scored issues to spot

- **UCC Article 2 Governs (Sale of Goods)** (Contracts, 5 pts): Custom amber bottles are movable goods at time of identification — UCC Article 2 applies, not common law.
- **Contract Formed Under UCC §2-207 Despite Conflicting Forms** (Contracts, 15 pts): Riverbend's acknowledgment is a valid acceptance even with additional terms — definite expression of acceptance under §2-207(1). The offeror's language limiting acceptance does NOT automatically defeat contract formation; at a minimum, performance confirmed the deal under §2-207(3).
- **Additional Terms Knocked Out (Between Merchants)** (Contracts, 15 pts): Both parties are merchants. Northgate's PO expressly limited acceptance to its terms, so Riverbend's additional terms (arbitration, restocking, FOB) do NOT enter the contract. Even absent that limitation, the arbitration clause materially alters and would be excluded.
- **Delivery-Date Modification Valid Under §2-209** (Contracts, 15 pts): No new consideration is required for UCC modification. Contract exceeds $500, so SoF applies, but the exchanged emails satisfy §2-201 as a signed writing between merchants. Good faith under §1-304 satisfied — furnace failure is a legitimate commercial reason.
- **Northgate's December 3 Email is Anticipatory Repudiation** (Contracts, 15 pts): A definite, unequivocal statement that a party will not perform is repudiation under §2-610. "We don't need the bottles" is unequivocal. Riverbend may (a) await performance for commercially reasonable time, (b) resort to remedies, or (c) suspend its own performance.
- **Seller Recovers Full Contract Price Under §2-709** (Contracts, 15 pts): Custom goods bearing buyer's logo cannot be resold at a reasonable price. Under §2-709(1)(b), seller recovers the full contract price for goods identified to the contract that cannot be resold after reasonable effort. Riverbend must hold the bottles for Northgate.
- **Impracticability Not Available to Northgate** (Contracts, 10 pts): Northgate's reason (chef changed direction) is not a supervening event that made performance impracticable — it is a change of preference. §2-615 excuses the seller for unforeseen contingencies, not buyers for buyer's-remorse. Riverbend's furnace event was addressed by modification, not excuse.
- **Northgate's $5,000 Deposit Offsets Price — Not Refunded** (Contracts, 10 pts): Under §2-718, a breaching buyer may recover the deposit only to the extent it exceeds seller's damages. Riverbend's damages equal the full contract price ($32,000) minus the deposit; the deposit is credited, not returned.

## Model answer

**1. UCC ARTICLE 2 APPLIES**
The transaction is a sale of movable goods (custom amber bottles) identified to the contract. UCC Article 2 governs, not common law. The UCC's more forgiving formation rules and gap-fillers are therefore in play.

**2. CONTRACT FORMED UNDER §2-207**
Riverbend's September 6 acknowledgment is a "definite and seasonable expression of acceptance" under §2-207(1), even though it contains additional terms. Northgate's PO tried to limit acceptance to its own terms, but Riverbend did not make its acceptance "expressly conditional on assent" to its new terms — it simply accepted and listed extras. A contract formed on September 6. Alternatively, performance by both sides (Riverbend starting production; Northgate wiring the deposit) confirms a contract under §2-207(3).

**3. ADDITIONAL TERMS DROP OUT**
Both parties are merchants, so §2-207(2) controls. Northgate's PO "expressly limited acceptance" to its own terms, so Riverbend's additions do NOT enter the contract. Independently, the arbitration clause and the restocking fee would be excluded as material alterations under §2-207(2)(b). The FOB term is a common allocation that might otherwise enter, but the express limitation defeats it here. The contract is Northgate's PO terms plus UCC gap-fillers.

**4. MODIFICATION OF DELIVERY DATE IS BINDING**
When Riverbend's furnace cracked, the parties modified the delivery date to January 20 via their October 1 emails. Under §2-209(1), no new consideration is required. The contract exceeds $500, so §2-201's Statute of Frauds applies to the modification as modified, but the exchanged emails are signed writings between merchants sufficient under §2-201. §1-304's good-faith requirement is satisfied: the furnace failure was a legitimate commercial reason, not a pretext for squeezing the other side.

**5. NORTHGATE'S DECEMBER 3 EMAIL IS ANTICIPATORY REPUDIATION**
"We don't need the bottles. Please return our $5,000" is a clear, unequivocal statement that Northgate will not perform. That is anticipatory repudiation under §2-610. Riverbend had three options: (a) await performance for a commercially reasonable time, (b) resort to remedies for breach, or (c) suspend its own performance. Riverbend elected to complete the run — permissible for a short, commercially reasonable window and supported by the custom nature of the goods.

**6. RIVERBEND RECOVERS THE FULL PRICE UNDER §2-709**
Custom amber bottles bearing Northgate's proprietary logo are not readily resalable at a reasonable price. Under §2-709(1)(b), the seller may recover the full contract price for goods identified to the contract that it cannot reasonably resell. Riverbend must hold the conforming goods for Northgate as a condition of the price remedy. The contract price is $32,000 (10,000 × $3.20).

**7. IMPRACTICABILITY IS NOT A DEFENSE FOR NORTHGATE**
Northgate cannot invoke §2-615 based on its chef's change of direction. §2-615 excuses a seller when performance becomes impracticable due to a supervening contingency, not a buyer whose preferences shifted. There is no non-occurrence of a basic assumption of the deal. Riverbend's earlier furnace issue was addressed by modification, not by excuse — and even if Riverbend had invoked §2-615, it would have allocated production among its buyers, not cancelled outright.

**8. THE $5,000 DEPOSIT IS OFFSET, NOT REFUNDED**
A breaching buyer may recover its deposit only to the extent it exceeds the seller's damages. §2-718. Riverbend's damages equal the full contract price, so the $5,000 is credited against the $32,000 owed. Net recovery to Riverbend: $27,000 plus incidental costs.

**KEY POINT:** The call of the question centers on whether the contract exists at all and whether Riverbend may recover the price for custom goods. Students should identify §2-207 formation, handle the knock-out of arbitration cleanly, recognize §2-209 modification without new consideration, and distinguish §2-709's price remedy from ordinary damages.

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