Super Mega Mart recently reached an agreement with the Detroit Spur Company to sell DSC Belt Buckles in Super MegaMart Stores across the Southwest. They agreed to purchase the entire output for the month of January that DSC can provide. Super MegaMart anticipates this to be at least 100,000 belt buckles and they originally planned to sell these at $25 a buckle.

But a problem emerged. The CEO of Super MegaMart, Jack Murphy, wants out of the contract. He says that the Belt Buckles aren't going to sell as well as they expected and wants out of the contract.

So here are some of the important facts:

The belt buckles havent been made yet. Can a contract be for something that doesnt technically exist yet? Are these goods?

There was a minor modification of the contract and there was no actually price on this new contract for the buckles. . It was to be set at a later date. In the past these had been sold by DSC for $5 each to Super MegaMart. But this is a much bigger order than past orders so they elected to leave the price open until they knew how many buckles would be sold. Is there consideration?

Also, as noted above, there is no quantity in the contract. Just the total amount DSC can make. Does this void the contract?

Here is the real curveball:

Despite their name, the Detroit Spur Company is actually based in Tokyo, Japan. The parties agreed that Japanese Law applies. But it didnt actually specifically opt out of the CISG (Japan and the USA both are part of the CISG and Super MegaMart is an American company). We hired a Japanese legal team and they said that if we followed Japanese law then there is no valid contract and we can walk away from this deal. The contract clearly said we follow Japanese contract law here so cant we just walk away from this contract, even though Japan signed onto the CISG? I mean, if Super MegaMart was also a Japanese company this would be a done deal, right? Why does it matter if the CISG says the provisions of the UCC would apply?

Team, we need to know, can we walk away from this contract or are we bound by it? Does the UCC say that there is a binding contract here since both the Detroit Spur Company and Super MegaMart are merchants?

You are meeting with them now. They need to know what their options are. They need to know both sides. The CEO of Super MegaMart is going around the table now and he wants to hear from you. He wants your opinions. Remember...you have to let the CEO know BOTH SIDES of the equation. You need to be a great attorney here and do more than just tell him what he wants to hear, but what he needs to hear to be able to make an educated decision.