1. Valerie Stephan-LeBoeuf
Paralegal Independent Study
Legal Memorandum 2
BMI v. Minicom, Inc.
1
Valerie Stephan-LeBoeuf
Independent Study
UCC Contracts
Business Machines, Inc. v. Minicom, Inc.
November 14, 2009
MEMORANDUM
TO: Pam Packard
FROM: Valerie Stephan-LeBoeuf
DATE: November 14, 2009
RE: Contract & Breach of Contract, BMI v. Minicom, Inc.
QUESTIONS PRESENTED
Was there a valid contract between BMI and Minicom, Inc.?
Was there a breach of contract between BMI and Minicom, Inc?
If there was a breach of contract, who is the breaching party?
BRIEF ANSWER
Yes, as per the Uniform Commercial Code under which commercial transactions
are defined, there was a valid contract between BMI and Minicom, Inc., as the terms of
the agreement contained all essential elements of a commercial contract for sale.
Yes, there were several breaches of the contract.
BMI was the breaching party in that they failed to perform essential elements of
the agreement: insuring shipment as instructed and delivery within performance time.
FACTS
September 2007 – Minicom, Inc., placed a phone order with Business Machines,
Inc. for the purchase of 100 gross of ICP-73s for a purchase price of $200,000. Shipment
was agreed to be made within 10 days to Minicom, Inc. via National Parcel Service and
BMI would insure the shipment for full value. Minicom, Inc. agreed to pay the total

2. Valerie Stephan-LeBoeuf
Paralegal Independent Study
Legal Memorandum 2
BMI v. Minicom, Inc.
2
purchase price plus shipping and insurance charges within 60 days after receipt.
Conforming goods were shipped per agreement.
January 6, 2008 - Minicom, Inc., placed a phone order with BMI for 100 gross of
ICP-73s for a purchase price of $200,000, due no later than 60 days after delivery. This
order was confirmed in writing by a letter dated January 1, 2008, from Minicom, Inc. to
BMI. In that letter, item, quantity and price were specified, with additional language
stating that “it is my understanding that the transaction will be handled as per our usual
agreement. Please notify me immediately if this letter does not conform to your
understanding of our agreement.”
January 10, 2008 - Confirmation of the order was sent in writing by BMI to
Minicom, Inc., with an attached “statement of account”. The letter additionally stated
“Please notify immediately if the goods are in anyway unsatisfactory or if any error
appears in your statement.” This letter was received by Minicom on January 14, 2008.
January 23, 2008 – Nonconforming goods of 10 gross of ICP-22s are received by
Minicom, Inc., and returned to BMI. Minicom, Inc., gives notice in writing of non-
acceptance of nonconforming goods with return to BMI, and note of lack of insurance
charge on January 10, 2008 statement. Minicom, Inc. requested that this insurance
omission be corrected, and gave notice to BMI that the order needed to be received by
Minicom, Inc. by January 31, 2008. This letter was received by BMI on January 27,
2008.
January 27, 2008 – BMI sent written confirmation to Minicom, Inc. that the
shipment of 100 gross of ICP-73s was sent via National Parcel Service on January 16,
2008. No acknowledgement of insurance correction was noted in BMI letter.

3. Valerie Stephan-LeBoeuf
Paralegal Independent Study
Legal Memorandum 2
BMI v. Minicom, Inc.
3
February 13, 2008 – BMI sent letter to Minicom, Inc. that the shipment of 100
gross of ICP-73s was lost by National Parcel Service. BMI states that they have more
ICP-73s in stock and can ship new order, and include a $400 check from carrier for loss
suffered by Minicom, Inc.
Subsequently, BMI claims that Minicom, Inc. breached their contract with BMI
by failure of payment to BMI for the lost parts, shipping, and interest. Minicom, Inc.,
claims that BMI breached the contract by failing to insure per Minicom, Inc.’s
instructions, and by failing to deliver the ICPs.
DISCUSSION
1. The first issue presented is whether or not there or not there was a valid
contract between Minicom, Inc. and BMI.
The Uniform Commercial Code (UCC) has been adopted by the Idaho Legislature
and is noted in the Idaho Code under Title 28.
To comply with I.C. 28-2-201, Formal Requirements – Statute of Frauds; after the
parties have agreed orally to the terms of a contract, one of the merchants can satisfy the
“in writing” requirement of this section by sending a written confirmation to the other.
Written confirmation by both parties indicating the intent to contract and confirmation of
agreement are noted in the letter of January 6, 2008 from Minicom, Inc., and the letter of
January 10, 2008 from BMI. “A writing is not insufficient because it omits or incorrectly
states a term agreed upon but the contract is not enforceable under this paragraph beyond
the quantity of goods shown in such writing.” J.R. Simplot Co. v. Enviro Clear Co., Inc.,
132 Idaho 251, 970 P.2d 980 (1998). In the writings between both Minicom, Inc. and
BMI, the quantity of goods (100 gross of ICP-73s) was noted.

4. Valerie Stephan-LeBoeuf
Paralegal Independent Study
Legal Memorandum 2
BMI v. Minicom, Inc.
4
The UCC does not require that a contract for the sale of goods itemize all the
specific terms of the agreement: “A contract for sale of goods may be made in any
manner sufficient to show agreement, including conduct by both parties which recognizes
the existence of such a contract.” I.C. § 28-2-204(1). “…a contract for sale does not fail
for indefiniteness if the parties have intended to make a contract and there is a reasonably
certain basis for giving an appropriate remedy.” Griffith v. Clear Lakes Trout Co., Inc.,
143 Idaho 733, 152 P.3d 604 (2007). An order was placed by Minicom, Inc. in writing
on January 6, 2008. The writing specified the item, quantity, and price, and referred to
additional terms “per our usual agreement”. A confirmation in writing, was sent by BMI
on January 10, 2008, to Minicom, Inc., confirming the order and the intent to perform to
satisfaction.
“Terms with respect to which the confirmatory memoranda of the parties agree or
which are otherwise set forth in a writing intended by the parties as a final expression of
their agreement with respect to such terms as are included therein may not be
contradicted by evidence of any prior agreement…but may be explained or supplemented
(a) by course of performance, course of dealing…” I.C. 28-2-202. The courts allow for
the admission of “parol evidence” as long as that evidence is “consistent with the terms
of the contract” and as “long as the written contract was not intended as a complete and
exclusive statement of the terms of the agreement.” Borah v. McCandless, 147 Idaho 73,
205 P.3d 1209 (2009). The expression in the letter sent by Minicom, Inc. on January 6,
2008 which included the reference “…it is my understanding that the transaction will be
handled as per our usual agreement...” is a clear reference to prior transactions and
expectations of terms not specified in the current agreement. In addition, the confirmation

5. Valerie Stephan-LeBoeuf
Paralegal Independent Study
Legal Memorandum 2
BMI v. Minicom, Inc.
5
sent by BMI did not state the prohibition of additional terms not specified in the current
writings.
I.C. 28-1-303 defines course of dealing as “a sequence of conduct concerning
previous transactions between the parties to a particular transaction that is fairly to be
regarded as establishing a common basis of understanding for interpreting their
expressions and other conduct.” By both conduct and performance in the previous
transaction of the parties, it is clear that additional terms included BMI arranging full
insurance coverage during shipping to Minicom, Inc., and those insurance and shipping
costs would be billed to Minicom, Inc.
2. The second issue presented is whether or not there was a breach of contract
between Minicom, Inc. and BMI, and who was the breaching party?
“Where any tender or delivery by the seller is rejected because nonconforming
and the time for performance has not yet expired, the seller may seasonably notify the
buyer of his intention to cure and may then within the contract time make a conforming
delivery.” I.C. 28-2-508. Nonconforming goods were delivered to Minicom, Inc. on
January 23, 2008. Minicom, Inc., rejected and returned those goods to BMI, and stated in
writing that conforming goods needed to be delivered to Minicom, Inc. by January 31,
2008. This notice received on January 27, 2008 by BMI put an expiration on the time for
performance, and requested in writing a date expected for delivery. BMI responded by
indicating that the order should be received in “the very near future”. The order was not
received by Minicom, Inc.’s deadline of January 31, 2008.
“Where the seller is required or authorized to send the goods to the buyer and the
contract does not require him to deliver them at a particular destination, then unless

6. Valerie Stephan-LeBoeuf
Paralegal Independent Study
Legal Memorandum 2
BMI v. Minicom, Inc.
6
otherwise agreed he must (a) put the goods in the possession of such a carrier and make
such a contract for their transportation as may be reasonable having regard to the nature
of the goods and other circumstances of the case; …Failure to (c) or to make a proper
contract under paragraph (a) is a ground for rejection only if material delay or loss
ensues. I.C. 28-2-504. BMI failed to fully insure the shipment to Minicom, Inc. which
was not in compliance of their agreement. Minicom, Inc. reserves the right to reject the
shipment because of lack of full insurance and lack of delivery by January 31, 2008.
“Statement of Account” was received by Minicom, Inc. on January 14, 2008
which omitted a reference to insurance for the shipment. Minicom, Inc. responded to
BMI in writing on January 23, 2008 noting this omission and requested a correction.
“The party receiving the writing need not expressly accept or reject it. In a transaction
between merchants, if within a reasonable time a writing in confirmation of the contract
and sufficient against the sender is received and the party receiving it has reason to know
its contents, it satisfies the requirements of subsection (1) against such party unless
written notice of objection to its contents is given within (10) days after it is received.”
Beal v. Griffin, 23 Idaho 445, 849 P.2d 118 (Ct.App. 1993). Minicom, Inc. gave written
notice to BMI within the 10 day period required by I.C. 28-2-201 that the “Statement of
Account” was not accurate in regard to the insurance requirement and for BMI to correct.
I.C. 28-2-510 provides that “Where a tender or delivery of goods so fails to
conform to the contract as to give a right of rejection the risk of their loss remains on the
seller until cure or acceptance.” “Under subsection (1) the seller by his individual action
cannot shift the risk of loss to the buyer unless his action conforms with all the conditions
resting on him under the contract.” I.C. §§ 28-2-510(1) comment as cited in Beal, at 849

7. Valerie Stephan-LeBoeuf
Paralegal Independent Study
Legal Memorandum 2
BMI v. Minicom, Inc.
7
P.2d. By not complying with the insurance provisions of the agreement, BMI assumes all
risk of loss prior to delivery.
CONCLUSION
Minicom, Inc. and BMI had a valid, enforceable contract for the sale of goods.
Agreed upon provisions contained in writing included the item, quantity, and price.
Minicom, Inc. relied upon the additional provisions of method of delivery, insurance, and
payment by reference to a previous agreed upon transaction. BMI did not counter or
disallow the additional reference of terms. Therefore, the agreed upon terms were item,
quantity, price, shipment via National Parcel Service, full insurance, and payment for
items, shipment and insurance due by Minicom, Inc. to BMI within 60 days of receipt.
BMI breached the contract by failing to comply with the insurance portion of the
agreement. In addition, after delivering nonconforming goods which were rejected by
Minicom, Inc., and receiving a performance deadline for conforming goods, BMI failed
to deliver those conforming goods.