Untitled Document

2014 Commercial Law Developments, Prepared by the Commercial Transactions Committee for the Business Law Section 2014 Annual Report

A. Scope

1. General

2. Software and Other Intangibles

B. Contract Formation and Modification; Statute of Frauds; "Battle of the Forms"; Contract Interpretation; Title Issues

1. General

2. Battle of the Forms

C. Warranties and Products Liability

1. Warranties

  • Source One Financial Corp. v. Road Ready Used Cars, Inc., 2014 WL 1013121 (Conn. Super. Ct. 2014) - A chattel paper financier acquired a secured car loan from the car seller had no liability to the used car dealership that purchased the car from the individual buyer as part of a trade in for breach of the implied warranty of merchantability. The buyer made no such warranty in the trade in and the used car dealer had no privity of contract with the financier.
  • VFS US, LLC v. Southwinds Express Construction, LLC, 2014 WL 2979035 (E.D. La. 2014) - Secured party was entitled to judgment on three of five secured promissory notes issued in connection with the purchase of construction equipment even though the debtors claimed that one of the items was defective. While the debtors might have a counterclaim for recoupment or breach of warranty to reduce the amount owing on one note, they must bring such a claim in a timely manner.
  • Deere & Co. v. Cabelka, 84 U.C.C. Rep. Serv. 2d 705 (W.D. Okla. 2014) - An entity that sold a combine to a buyer without disclosing the existence of a perfected security interest in the combine and without providing for payment of the secured obligation. The Seller was liable to the buyer for breach of the warranty of title for the amount that the buyer settled with the secured party.
  • Lyon Financial Services, Inc. v. Illinois Paper and Copier Company (7th Cir 2013) - Whether there can be a representation and warranty as to enforceability of agreement because that's a legal issue.

2. Limitation of Liability

3. "Economic Loss" Doctrine

D. Performance, Breach and Damages

E. Personal Property Leasing

  • Pacific Space Design Corp. v. PNC Equipment Finance, LLC, 2014 WL 6603288 (S.D. Ohio 2014) - A lessee, at the end of the lease term, had the option to return the equipment, buy the equipment for $17,000, or, if it failed to do either of those, continue to rent the equipment on a month-to-month basis. The lessee did not have a claim against the lessor for unjust enrichment after the lessee paid over $100,000 to continue leasing the equipment for 34 months. The lessee's failure to exercise its rights did not make the lessor's retention of the rent unjust.
  • Rentrak Corp. v. Handsman, 2014 WL 1342960 (E.D.N.Y. 2014) - An individual owner of a business rented video game equipment. The individual was personally liable to the lessor even though the owner did not guaranty the lease obligations because the owner orchestrated a sale of the equipment and used the proceeds - along with sublease revenue held in trust for the lessor - to pay debts that the owner had guaranteed, pay himself, and pay his expenses.

VII. Commercial Paper and Electronic Funds Transfers / Table of Contents