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GROUP 9

CASE 7 - CHAPTER 9

Group member
-Ngo Van Linh
-Le Vu Thuy Linh
-Vu Ha Linh
-Vu Thanh Loan
CASE STUDY
• Borden, Inc.- the • Sons of Thunder’s
purchaser (SOT)- the seller

They had the contract of


purchasing the clam for five years
The contract allowed each parties
to cancel the contract by giving the
prior notice in writing 90 days
before the effective date of
cancellation
ISSUE
 Borden  SOT
- Did not take all the goods as
they required most of weeks
- New manager refused to
purchase from SOT
- Charged SOT for the
- Sold the clam for
shucking equipment other suppliers
- Cancelled the contract after Sued Borden for
90 days
breach of contract
and alleged; breach
its covenant of good
faith and fair dealing
QUESTION

Was Borden’s cancellation


in bad faith, therefore, in
breach of the duty of good
faith and fair dealing?
TERM
- UCC – the Uniform Commercial
Code is the main body of law that governs
transactions involving goods.
- The UCC governs the sale of tangible, movable
goods, property leases such as business
equipment, and financial transactions such as
bank deposits and letters of credit.
- Good faith means honesty in fact and the
observance of reasonable commercial
standards of fair dealing.
TERM
• This includes the requirement that neither party shall do
anything that will have the effect of destroying or injuring
the right of the other party to receive the fruits of the
contract
• This obligation is included in contracts that contain
express and unambiguous provision permitting either
party to terminate the contract without cause.
PRECEDENT
Case: Wood vs. Lucy, Lady Duff-Gordon in 1917

Plaintiff: Wood- top New York advertising agent,


representing major commercial clients as well as
celebrities
Defender: Duff Gordon- a fashion designer
Appeal: - Trial court
- Appellate court
- Supreme court
Precedent
• Duff signed a contract to give Wood the
exclusive right to market garments and other
products bearing her endorsement in one year
• Under contract, if Wood did no work to market
the clothes, no monies could be received and
no patents would become necessary.
• Lucy broke the contract by endorsing products
sold by Sears Roebuck without Wood’s
knowledge => Wood sued
• Lucy gave the reason that Wood was not
actually required to do any thing, so the
agreement was not valid
PRECEDENT
• Trial court found for Wood, Duff appealed
• Appellate court reversed and Wood appealed
• NY Supreme court reversed the reversal and
reinstate the Trial court’s decision
Wood won the case and Duff appealed for
breach the its covenant in good faith and fair
dealing.
NEW LAW
• Determine that a promise to represent the
interests of a party constituted sufficient
consideration to require the enforcement of
a contract base on that promise.
• A promise may be lacking, and yet the
whole writing may be” instinct with an
obligation” imperfectly expressed.
• The doctrine of consideration should not be
used to dismiss what are obviously
commercial contracts. The requirement of
reasonable effort can always be read into a
business contract as an implied
consideration.
CONCLUSION

Borden was not honest in fact


as required by the U.C.C.
and that it acted in bad faith.
IMPLICATION IN VIETNAM
Case: tranh chap in contract

•The plaintiff: Soi Dat Company (SD company)

•The defender: Dong Do Thanh Company (DDT


company)

•Court : HCM people court


EVENT
• There was a contract between two companies to
deliver a new Matiz Se 5 seats, silver color,
manufacturing in 2006 in Vietnam in value of
13.000 USD
• But when DDT company delivered the car, it was
not like in the contract. The car was manufacted in
2005 and even its quality was bad.
• SD company cancelled the contract and asked DDT
Company to refund but DDT company refused.
SD sued DDT in bad faith and fair
dealing and forced them to recover all the
damage.
VERDICT
• SD did correctly in cancelling the contract
• DDT did not do the obligation in good faith and fair
dealing
 The car was not like in the contract
 When the contract was cancelled correctly, they did do
their obligation to refund
DDT had to pay back all the money,
which SD gave, and recover all the
damage in total of 228.639.000 VND
Thank you for
listening