Question: Describe the basic elements of Uniform Commercial Code Article 2. Explain the relationship as between merchants under the U.C.C.

Kevin Whalling, Chief Counsel for the Whalling Law Group, PLLC must present on behalf of Lopes Incorporated, a manufacturer of men's high-end fashion ties and cufflinks.

Lopes Incorporated recently entered a contract with Thunder Clothing, a retailer of high-end clothing.

At the time of the negotiation for the contract, Lopes Incorporated contacted Thunder Clothing via e-mail and stated, "I have ten thousand ties of assorted patterns with matching cufflinks. I will let you have them for $50 each, F.O.B. destination." Thunder Clothing replied, "We'll take them."

The next day Lopes Incorporated e-mailed the following letter [relevant portion] as a PDF file:

This will confirm our contract for ten thousand ties and matching cufflinks of assorted patterns at $50 each, plus shipping charges. for immediate shipment, payment on delivery. (Signed) Lopes Incorporated.

Thunder Clothing did not reply to this e-mail which was received and read two days after it was e-mailed. Lopes Incorporated shipped the ties to Thunder Clothing's place of business and enclosed an invoice that billed Thunder Clothing for $500,000 - ten thousand ties and matching cufflinks, plus $4,000 in shipping charges.

Thunder Clothing accepted the ties, made no complaint about them or the charges, but he has refused to pay anything to Lopes Incorporated. A month later, when Lopes Incorporated complained about not having been paid, Thunder Clothing admitted that Lopes Incorporated was owed $500,000, but contended that he did not owe the $4,000 because "Thunder Clothing never agreed to pay the shipping charges."

Mr. Whalling has asked you to prepare a Memorandum of Law to describe the basic elements of Uniform Commercial Code Article 2. Further, he wants you to apply U.C.C. contracts principles to the sales situation between Lopes Incorporated and Thunder Clothing and determine whether Lopes Incorporated is owed the $4,000.

Remember that this is an internal memorandum for Mr. Whalling; while his job is ultimately to support Lopes Incorporated, you can provide an objective analysis.