The Agredano v. U.S. case and government auction contract warranties

Government and UCC Contracts Revision (Reduced length of paper)

Understanding Contract Theories and Formation

Relationship of FAR and UCC in subcontracting. Gabbard, E.G. (2011). Relationship of far and ucc in subcontracting. Retrieved June 10, 2011 from http://www. fasmg. org/farucc. HTML The first article titled "Relationship of FAR and UCC in Subcontracting" by Ernest G. Gabbard director of procurement at Teledyne Enterprises. In formulating a Government contract, the requirement is to have specific contracting authority as one of the consenting parties. There are formalized Termination & Convenience clauses and certain mandated terms. The offer and acceptance by the parties is unequivocal and cannot easily be rescinded.

Consider this second article from a government contract case law example:

Agredano v. U.S., -F.3d- (2010 WL 537160, Fed. Cir., 2010).

Article 2: Vehicle bought from the government should include buyer beware.

Cengage Learning, (2011). Buyer beware applies to vehicle bought by the government. June 12, 2010 from http://www.swlearning.com/blaw/cases/sales/0410_sales_01.html

Buyer beware applies to vehicle bought by the government.

The plantiff purchased a vehicle from a government auction where autos seized or forfeited were for sale. Agredano then signed a contract agreement to buy the car 'as is' (Cengage, 2011). This implies there is no warranty or return of the vehicle if there is a mechanical failure or the auto is no longer wanted by the buyer.

The car was a Nissan manufactured in 1987. While traveling in Mexico, the plantiff was pulled over and the car was searched. The car had been used previously by drug dealers. During the search of the vehicle, some marijuana was found in the vehicle (Cengage, 2011). Though the marijuana had been there prior to Agredano's purchase, he was put in prison for a period of one year. Agredano appealed the verdict and was freed after convincing the appellate court that the drugs were not his. Agredano then focused his attention on pursuing a case against the government auction site that sold him a vehicle that had illegal drugs in it. His argument was that there was the implied in fact warranty that would cover the presence of illegal drugs (Cengage, 2011). The result was a court ruling in Agredano's favor. But the government appealed this verdict, the Government contract formed with Agredano stated the purchase warranty was 'as 'is' and that it did not include an implication of legal nor illegal drugs. The appellate court maintained that there was no obligation for the government to locate or eliminate any drugs from the vehicle. The buyer purchased the car 'as is' thereby releasing the government of any responsibility.

Therefore the government prevailed stating "the government had no responsibility to remove drugs from forfeited vehicles does not provide a contractual warranty to future purchases of the vehicles" (Cengage, 2011). The government is not liable for any neglect to remove illegal drugs from the vehicle and there is no "contractual remedy" since the car was sold "as is" (Cengage, 2011). In addition to this the buyer was aware that the car had been used by drug dealers. Therefore any warranty claims were not valid.

In an analysis and evaluation of this government contract case, the Bargaining Position in government FAR contracts, there are set protocols for making changes or discussing the contract using ethical code of conduct. Having the right people in the room to make the required decisions is necessary in government contracts compared to UCC.

Government Contract Comparison to Uniform Commercial Code/Contract

The U.C.C. Or commercial contract is less formal and authority to enter a contract is assumed by the parties involved (Gabbard, 2011). In a UCC the terms are not detailed or written out in a formal document as required by a government contract. In fact the details are implied (Gabbard, 2011).

Analyzing and Evaluation Example: Carpet Cleaning Contract

For example in a UCC contract with a carpet cleaner, it was assumed they would move the furniture and replace it after the carpet was cleaned. Though this was not formally discussed, it is implied or assumed. The terms can be deemed valid even though either party has not formally stated or documented the contract is in effect. For instance when asking for the carpet to be cleaned, we asked the serviceperson to come to our home and complete the service within a couple of hours. Even though this information was not documented by either the carpet cleaner or myself, it is expected that the job will not take more than a couple hours. This is an informal expectation.

UCC Contract Requirements

In a UCC contract one Bargaining Position is that of Good faith, which is assumed on the parts of both parties to complete their part of the contract (Gabbard, 2011). Even though no money is paid, the carpet serviceman cleaned our carpets and expected to be paid when the work was done. Even though no money had yet exchanged hands. As the person receiving the service, it is expected that the job will be satisfactory even before the work is done. Warranties are implied. In the case of the carpet cleaning service. The carpet was expected to look better after being cleaned than before. If we noticed anything contrary to a good service job within the first 24 hours to several days, it was assumed that the carpet cleaning service would fix the problem as a warranty repair at no additional costs. If there is any additional repairs as a result of a faulty job, it is assumed that these excess costs or damages will be covered by the carpet company. If the contract needs to be terminated under UCC, this can be done by either party (Gabbard, 2011).

There are implied expectations of service that will determine if the job was acceptable after inspection or rejected. If something came up to change the plans for getting the carpet cleaned on a specific day after the job was started, it is possible that a fee would still need to be paid to the company. Even if the company didn't finish the job simply because there are not unilateral termination rights or change clauses.

By comparison, if there is a disagreement with UCC parties, there are alternatives that can be agreed by either party and discussion to explore the alternatives is possible. Authority belongs with both parties. It cannot clearly be delineated as to who has more authority. Neither party is allowed to audit the accounting financials or other private database of information.