FACT PATTERN

Olivia is a florist who specializes in roses. She has a five-year written contract with Juan to sell him as many roses as he needs for his wedding chapel. Over the past three years, Olivia sold Juan between 300 and 1,500 dozen roses annually. Although two years remain on the contract, Juan has just notified Olivia that he cannot continue to buy roses from her because of serious budget concerns.

Last month, Ann emailed Olivia an order for "1,000 white stems" to decorate an event hall, specifying no particular price or flower. Ann assumed that Olivia would send roses, her specialty, but Olivia instead sent orchids, the only "white stems" available at the time. When Ann received the white orchids, she was surprised, but had no time to inquire about substitutes. As a result, she used the orchids for the event. When Olivia subsequently billed Ann $5 per stem for the orchids, a price twice that of roses, Ann refused to pay the higher amount.

1. What law governs?
2. Does it matter if both parties are merchants?
3. Was there consideration?
4. Discuss how the legal principle of COVER applies in this fact pattern.
5. Was the Statute of Frauds satisfied?