Case Study
On January 15, 2019, Jim’s Wine Imports, a corporation registered in Florida and
located in Miami, ordered a shipment of wine valued at $10,500. The wine was ordered
online from Garces Silva Family Vineyards in Chile (https://www.vgs.cl/).
The order was placed through the winery’s website using a standard electronic
order form. When the terms and conditions of the sale appeared on the computer
screen, Jim Ruiz, owner of Jim’s Wine Imports, clicked on the “I agree” button. He did
not read the “Terms and Conditions” of the contract since he was busy talking on the
phone with his wife. “Honey, I just bought tickets for a safari!”
The “Terms and Conditions” for the vineyards’ contract stated, “Buyer is wholly
liable for any loss which occurs after the wine is delivered to buyer.” The language also
stated that the Uniform Commercial Code (UCC) would govern the contract.
Payment was scheduled through the buyer’s bank, Miami Trust Bank. The terms
of the sale stated that payment was due to the seller “on arrival of the wine in
PortMiami.” The Bill of Lading, emailed to Ruiz along with the invoices, stated that
notification would be given to the vineyard and Ruiz when the wine arrived in the port.
Jim’s Wines Imports completed the paperwork to have funds transferred
electronically from their account at Miami Trust Bank to the winery’s account at the Bank of Chile. However, Ruiz’s administrative assistant put the wrong information on
the documents for the transaction. She was busy sending a text message. “Mom, I’m
going surfing this weekend.” The money was scheduled to be sent upon confirmation of
delivery of the wine. However, the seller’s account number was not correct. As a result,
the money was scheduled to be sent to an account for an orange farm in Spain.
The wine was shipped “F.O.B place of destination” and arrived at PortMiami
(http://www.miamidade.gov/portmiami/home.asp) as scheduled on March 15. The
shipper, Florida International Shipping and Logistics (http://fisl-ships.com/index.html),
delivered the wine to warehouse “B”. This was the wrong warehouse; the Bill of Lading
stated that the wine should be delivered to warehouse “E”. Notice of the delivery was
sent via email to the vineyard and to Ruiz. The business manager at the vineyard read
the email but took no further action, assuming the wine would be picked up by the
buyer. Ruiz received the email, but did not read it since he was on safari in Africa. He
waited a week before taking further action.
When Ruiz returned from vacation, he contacted the bank and requested that the
payment be sent as scheduled. Miami Trust Bank sent the payment as scheduled by
Ruiz’s assistant; it was sent to the orange farm in Spain. Garces Silva Vineyards never
received payment for the wine.
Ruiz’s truck driver went to PortMiami to pick up the wine. However, when he
went to warehouse “E”, the wine was not there, since it had been delivered to the wrong
warehouse. No one could find the misplaced wine, so the wine sat in PortMiami for several weeks. During that time, there was a fire and the warehouse burned down,
destroying most of the contents. A few crates of wine survived the fire.
U.S. Customs took charge of the remains of the wine and hired a government
contractor, Sunshine Movers, to move the crates to storage. When the employees were
moving the crates, they dropped several of them in a nearby wetland. The water in the
wetland was contaminated with wine causing severe harm to fish, birds and other
wildlife. One bird, the Cape Sable seaside sparrow, is listed as “endangered” under the
Endangered Species Act. A number of Cape Sable seaside sparrows died as a result of
the wine spill.
U.S. Customs notified Garces Silva Vineyards about the wine which was now
worthless. Garces Silva filed suit against Ruiz and Florida International Shipping,
seeking payment and damages for the lost goods. Ruiz had contracts with several
retailers for sale of the wine. Ruiz sued Garces Silva and Florida International Shipping
for damages due to the loss of the sales to the retailers, including lost profits. The state
and federal governments are investigating potential lawsuits for the harm to the
environment.
Instructions
Case Study Analysis Paper
Complete a minimum 8- page, maximum 10-page (title page, reference pages
and appendices do not count toward the page requirements) research paper. APA
format is required, including double spacing. (Note: An abstract is not required and
should not be included.)
Conduct research on the relevant legal issues and analyze the issues in the
case. The paper should include analysis of applicable laws ,
including relevant Uniform Commercial Code (UCC) Article 2 sections.
Analysis of scholarly research is a key requirement. The paper must list and
discuss a minimum of 8 relevant scholarly references from UMGC’s online library
databases (websites and textbooks will not count toward this requirement). At
least two (2) references must be scholarly journal articles on the topic from the
UMGC Library.
The analysis must address the following:
1. Contract formation: Was a legal contract formed between the buyer and the
seller? Discuss the legal requirements for electronic contracts and how the
requirements apply to this contract.
2. Risk of loss: Which party should bear the risk of loss of the wine? Discuss at
least two (2), UCC Article 2 sections which address the risk of loss and analyze each
section’s application to the facts and issues in the case study.
3. Environmental Liability: Is the contractor liable for the harm to the Cape
Sable seaside sparrow under the Endangered Species Act?
4. Alternative Dispute Resolution: Assume the contract included a clause
requiring the parties to participate in mandatory alternative dispute resolution (ADR)
prior to filing a lawsuit. Which type of ADR would be appropriate in this case?
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