GU Business Law Comprehensive Coverage of The UCC Case Questions

Comprehensive Coverage of the UCCThe UCC is the single most comprehensive codification of the broad spectrum of laws involved
in a total commercial transaction. The UCC views the entire “commercial transaction for the sale
of and payment for goods” as a single legal occurrence having numerous facets. The articles
and sections of the UCC are periodically revised or supplemented to clarify certain aspects or to
establish new rules as needed when the business environment changes.
You can gain an idea of the UCC’s comprehensiveness by looking at the titles of the articles of
the UCC in Appendix C. As you will note, Article 1, titled General Provisions, sets forth
definitions and general principles applicable to commercial transactions. For instance, there is
an obligation to perform in “good faith” all contracts falling under the UCC [UCC 1–304]. Article
1 thus provides the basic groundwork for the remaining articles, each of which focuses on a
particular aspect of commercial transactions.
Does the duty of good faith and fair dealing apply to contracts other than contracts for sales of
goods? That question arose in the following case.
Case Analysis
Case 20.1
Amaya v. Brater
Court of Appeals of Indiana, 981 N.E.2d 1235 (2013).
IN THE LANGUAGE OF THE COURT
CRONE, Judge. *** *
* * * In the spring of 2010, [Peter] Amaya, an Ohio resident, was a third-year medical student
at Indiana University School of Medicine [IUSM] located in Indianapolis. He was attending
medical school on scholarship. On March 29, 2010, Amaya sat for a combined mini-block
examination consisting of Introduction to Clinical Medicine II, Pharmacology, and Pathology.
Three professors, Drs. [Joseph] DiMicco, [Klaus] Hilgarth, and [Kathleen] Prag, each
observed Amaya during the examination and concluded that he was cheating by looking at
the paper of the student to his right. On March 30, 2010, Dr. DiMicco confronted Amaya with
his observations, and Amaya denied cheating on the mini-block examination. On April 5,
2010, Dr. Hilgarth confronted Amaya with his observations and explained to Amaya that his
behavior of looking into the workspace of the student to his right gave the appearance of
cheating. Amaya denied that he cheated or that he engaged in any behavior that gave the
appearance of cheating. Amaya maintained that he was merely looking over and up at the
clock on the right-hand wall of the testing room.
*** *
* * * On August 18, 2010, Dean [Craig] Brater advised Amaya that he * * * was dismissed
from Indiana University School of Medicine.
* * * Amaya filed a * * * complaint [in an Indiana state court against the dean and IUSM,
alleging] breach of contract and * * * breach of good faith and fair dealing.
* * * The trial court * * * granted IUSM’s motion for summary judgment. * * * Amaya now
appeals.
*** *
* * * Amaya raises two separate theories of liability against IUSM: (1) breach of contract, and
(2) breach of the duty of good faith and fair dealing. * * * A separate cause of action for
alleged breach of duty of good faith and fair dealing is inapposite [unsuitable] here. The duty
of good faith and fair dealing is a concept created by the Uniform Commercial Code and
restricted to contracts for the sale of goods * * * . Accordingly, the sole issue for our
determination on appeal is whether the trial court erred when it entered summary judgment
on Amaya’s claim for breach of contract. [Emphasis added.]
* * * The legal relationship between a student and a university [is] one of implied contract.
* * * The courts’ approach has been similar to that used with contracts conditioned upon the
satisfaction of one party. The university requires that the student’s academic performance be
satisfactory to the university in its honest judgment.
*** *
IUSM’s Student Handbook provides that the [Student Promotions Committee (SPC)] is
appointed by the dean to monitor student academic and professional standards as
determined by the faculty. Section V(F), entitled “Dismissal,” provides that “a student may be
required to meet with the SPC to show cause why he/she should not be dismissed from
school when he/she * * * has been cited for lack of acceptable academic ethics or
professional behavior.” The designated evidence indicates that three faculty members
observed Amaya cheating during the mini- block examination. Amaya was informed of these
observations and was requested to prepare for a * * * hearing before the SPC. Amaya
appeared before the SPC and presented a PowerPoint presentation. He also tendered
voluminous written material, including photographs, field studies, experts’ reports, timelines,
and statistical analysis. Following Amaya’s presentation, the SPC tabled its vote in order to
further deliberate and thoroughly review Amaya’s information. The SPC also asked for written
submissions from the three faculty members and from Amaya. Thereafter, Amaya was
informed that a subcommittee of the SPC had conducted field tests to determine the validity
of the information he had submitted. Considering the results of those field tests as well as the
written responses to additional questions, the SPC determined that the evidence supported
the charge of cheating. Amaya was granted his request for a reconsideration hearing as
provided by section VI of the Student Handbook. When the SPC declined to reverse its
decision, Amaya was then afforded the opportunity to meet with the dean for further review as
provided for in the Student Handbook. After considering all the evidence presented, the Dean
determined that dismissal was warranted.
* * * IUSM’s conclusion that Amaya failed to maintain acceptable professional standards was
a rational determination arrived at after much deliberation and after Amaya had numerous
opportunities to be heard.
*** *
* * * We affirm the trial court’s entry of summary judgment.
Legal Reasoning Questions
1. What is the duty of good faith and fair dealing (see Offer)?
2. To what type of contracts does the duty apply?
3. What type of contract was at the center of this case?
4. Did the court conclude that the duty of good faith and fair dealing applied in this case?
Why or why not?