FEBRUARY 2013 BAR EXAMINATION – CONTRACTS Bud’s Specialty Goods (Bud’s) has been manufacturing garage door openers in

Jacksonville, Florida, for 20 years and has sold about 10,000 openers per year for the last 10 years and provided two remote control units (RCUs) to the buyer with each opener. The vendor, which had been providing RCUs to Bud’s, recently went out of business and Bud’s entered into a new contract with Sayles Electronics (Sayles) also located in Jacksonville. The contract was written and contained the following terms:

1. Sayles agreed to provide all the RCUs required by Bud’s for a period of two years at a price of $20 per unit. The RCUs would be delivered to Bud’s in Jacksonville by Sayles or its contractor.

2. Bud’s agreed to pay for each shipment of RCUs within 20 days of receipt.

3. In the event Sayles is unable to provide all the RCUs required by Bud’s, liquidated damages in the amount of $10 per unit for each RCU not supplied will be paid by Sayles to Bud’s.

4. In any action to enforce the agreement, the parties agreed to litigate in the Circuit Court in and for Duval County, Florida. The prevailing party will be entitled to recover reasonable attorney’s fees from the non-prevailing party in the event of such litigation.

5. Paragraph 8 of the contract concerned the method of communicating orders from Bud’s to Sayles, but a space to enter the method was inadvertently left blank.

The contract was signed by the president of Sayles and faxed to the president of Bud’s, whose secretary filed it without obtaining any signature of anyone from Bud’s. The parties performed the contract as written for one year. At the end of the first year, the price of electronic components used in the RCUs rose dramatically and Sayles discovered that it was losing money on each unit sold to Bud’s. Sayles faxed an offer to continue shipping RCUs to Bud’s at a new price of $35 per unit but Bud’s faxed back a rejection and notification that it expected Sayles to perform the contract as written. Bud’s also informed Sayles that it required double the number of RCUs previously ordered per month because of a housing boom in Jacksonville. Sayles immediately stopped shipping RCUs to Bud’s.

Discuss the causes of action, claims, and damages that are available to Bud’s. Discuss any defenses and counterclaims that are available to Sayles. Discuss the enforceability of provision 4 of the contract pertaining to attorney’s fees. 19

SELECTED ANSWER TO QUESTION 1 (February 2013 Bar Examination)

Applicable Law

Article 2 of the UCC applies to sales of goods. Goods are all things moveable. RCU are moveable and thus, are a good so the UCC article 2 applies.

Formation

For a contract to be enforceable there must be offer, acceptance, consideration or a valid substitute, and no defenses.

An offer is a manifestation of intent to commit to a contract. It must have specific and definite terms. Under the UCC a quantity must be stated. Here, the quantity is all Bud’s required. This is a requirements contract and is a valid quantity term.

Acceptance is mutual assent to the contract. Here, Sayles agreed to the contract by signing the contract. Also, acceptance can be by performance and Sayles performed for one year under the contract.

Consideration is a bargained for exchange of legal detriment. Florida also allows for a benefit to suffice as well. Here, Sayles agreed to provide all RCU’s for two years and Bud agreed to pay $20 per unit. This is sufficient consideration.

Statute of Frauds may be asserted as a defense. The statute of frauds requires that contracts for the sale of goods of $500 or more must be in writing. The writing must contain the essential terms of quantity and signed by the party to be charged. Here, we have a writing. The writing was signed by the president of Sayles but not by Bud. If Bud is the party enforcing the agreement, which here he is, his signature is not required to be an enforceable writing. Sayles will argue that because the writing is not signed by Bud it cannot be enforced against them, however, because only the party charged needs to sign, this agreement will likely fail. Also, performance is another way to satisfy the statute of frauds. Here, Bud will assert that the parties have been performing for one year in a two year contract and thus, even if the court finds that the writing is not enough, the performance of the parties should be enough to satisfy the statute.

Also, the contract will not fail because the communication method was left open. Sayles may try to argue that this is an essential term which is necessary to enforce the agreement. However, under the UCC whenever there is a term left open to be determined the UCC has gap fillers which can allow the court to imply a term into the contract. Thus, this argument will likely fail.

Breach of Contract. Bud will argue that Sayles breached the contract. A breach occurs where a party does not get the substantial benefit of the bargain or a breach is so material that it substantially impairs the non-breaching party. Here, Bud will argue Sayles breached the contract when they stopped shipping RCU’s to Buds. This is a substantial and material

breach of the contract because Buds provides two RCU units to the buyer with each opener sold and Bud sells 10,000 openers per year.20

FEBRUARY 2009 BAR EXAMINATION - CONTRACTS

Albert is a distributor of widgets. He purchases widgets from widget makers and sells them to factories. Widgets are standard goods used in factories. Mindy owns such a factory.

Albert and Mindy signed a contract with a term of one year that commenced in January. The contract provided that Albert would make monthly deliveries of 10,000 widgets to Mindy’s factory at a price of $6 per widget. Delivery was to occur on the first of each month. At the time of contract, Albert’s cost for widgets was $5. The market price for widgets was $6.

Albert delivered 8,000 widgets in April and 7,000 widgets in May. Mindy accepted and paid for the widgets. On May 10th, Mindy contacted Albert regarding the shortages. Albert stated his cost for widgets had risen to $6. Mindy and Albert signed an addendum changing the contract price to $7 per widget. Albert delivered 15,000 widgets on June 15th. Mindy accepted and paid for the widgets.

Mindy then heard rumors that Albert was on the verge of bankruptcy. On June 20th, Mindy sent Albert a letter demanding he provide written assurances that he could perform. Mindy stated that she would not accept any further deliveries without such assurances.

Albert did not make the July delivery and did not respond to the demand for assurances. On July 25th, Mindy informed Albert she was canceling the contract. Since mid-June, the market price for widgets has been $7.

Your firm has been contacted by Albert. Albert wants to know the following:

what causes of action he may have against Mindy;

what defenses might be raised; and

what damages would be available to him.

Please prepare a legal memorandum addressing these points. 5

SELECTED ANSWER TO QUESTION 1 (February 2009 Bar Examination)

This memo will discuss what causes of action Albert (A) will have against Mindy (M), what defenses might be raised, and what damages would be available to him.

Applicable Law

This contract is for the sale of goods and as such is governed by the UCC. Both of the parties here are merchants so there will be special rules for them under the UCC.

K Formation

To have a contract there must be offer, acceptance, consideration, and no valid defenses. Here the facts state that there was signed written contract between A and M, so it appears they are satisfied. The contract is for a term of one year, but because it is split up into separate payments and delivery dates each month, this would most likely be considered an installment contract.

Defenses to Formation

The defenses to formation are inadequate consideration, mistake, duress, incapacity, intoxication. None of those defenses apply to this fact pattern.

Defenses to Execution

Statute of Frauds -- Under the UCC for a K for sale of goods to be valid it must be in writing, signed by the party charged, and must state a quantity, and give adequate language to indicate there is a contract. We have a signed writing and it states the quantity and gives most terms. This would satisfy the SOF and neither party would be able to challenge there was no contract based in SOF. Further, SOF can be satisfied by delivery of goods in a K for sale of goods and here we have had delivery and payment for several months.

Installment K

When a K can be broken up into separate portions where each portion has performance by each side it can be deemed an installment K. Here, delivery was to be monthly with payments also being monthly. This contract can be broken down into 12 separate installments. A would want to argue that this was an installment contract. As such, a breach of one installment would not be a breach of the entire contract. Further, a breach of one installment may be cured by further installments.

Material v. Minor Breach

When determining a breach it can either be material or minor. To determine if it is material or minor you look to see if the non-breaching party received the benefit of the bargain. To determine that you look to see how much benefit has been given, likelihood the other party will perform, the cost of the other party having to perform. If there has been a material breach of the contract that the non-breaching party does not have to 6

perform their portion of the K and will recover any damages they incur in order to mitigate or cover for the breaching parties breach. Here, A will argue that M materially breached the K on July 25th when she informed him she was canceling the K. The K was for 12 months and she was canceling it halfway through the K. Also, she had received 6 deliveries already and he was one month late on these deliveries. M will argue that A breached the K when he did not deliver the widgets for July and his breach was material. This breach would most likely be deemed minor because it was only one month out of 12. Further, as stated above, this would most likely be determined to be an installment K and as such A should be able to cure this installment on a later installment. Also, M accepted the later shipment of cured goods and as such A had fully performed for his part of the K. A is likely to succeed in this argument and M would be the breaching party in this scenario.

Perfect Tender

M will argue that A had already breached the K earlier when he failed to produce all 10K widgets on two separate months. Under the UCC perfect tender rule a party must deliver the goods in perfect condition on the exact quantity and quality as stated in the K. If the delivering party does not, then they have breached the contract and the non breaching party may accept the goods, reject the goods, or accept any commercially reasonable units and sue for the rest. Here, even if the court found that A breached the perfect tender rule, M accepted the goods. As such she ascented to the contract. Further, under an installment contract A was allowed to cure this shipment with a future shipment and he did with his June shipment of 15K. M would lose this argument as well and A would be deemed to not have breached.

Impracticability or Impossibility

If M argued that A breached the contract earlier when he did not deliver the correct amount in the beginning as stated above. A could argue that it became impracticable because of the change in price of widgets and he would lose money. Impracticability occurs when there is an event that makes performance of one party very difficult and the happening of that event was not foreseen by the parties. Here a raise in price of widgets by $1 would be foreseeable. This would not be a good defense for A.

Anticipatory Repudiation and Adequate Assurances

Albert can argue that M breached their contract when she informed him that she would no longer accept deliveries without assurances. A can argue that this was an anticipatory repudiation. Anticipatory repudiation occurs when one party communicates unequivocally that they will not perform their part of the bargain before their time of performance has arrived. If AR occurs then the non-breaching party has 4 options: (1) treat the K as a total breach and sue immediately, (2) wait for the performance date and sue, (3) treat the contract as rescinded, or (4) do nothing and encourage the other party to perform. Here, A would assert that M’s statement that she not accept further deliveries without assurances was an anticipatory breach and as such he was allowed to perform one of his 4 options. M will argue that she learned that A was on the verge of bankruptcy and was just requesting adequate assurances that the K would be performed. If a party learns that another party may have difficulty performing their 7

portion of the contract they are allowed to suspend their performance and request that the other party give them assurances that the contract will be performed. The other party (A here) needs to respond within a reasonable time and give M adequate assurances that they can perform. Here, A did nothing. He did not respond to the demand and he did not perform his portion of the contract. As such, A was entitled to suspend her performance and treat it as a breach by M. A will argue he had performed every part of the K up until now and so M had no reason to doubt he will perform. Under the law M is allowed to use outside information they obtained in deciding whether or not to try and get assurances. A will argue that her statements went beyond requesting assurances, but a party seeking assurances is allowed to suspend their performance until they receive the assurances. Also, A will argue that M canceled the K in July without waiting for assurances. Over 30 days is not a reasonable time to respond and M would be excused most likely. A would argue though that since this is an installment contract he is able to cure the July sale with further installments and planned on doing so. If A can give M adequate assurances now and make the deliveries the court would most likely be willing to allow it to enforce the K

Damages

When looking at damages the court looks to put the parties in the position they would have been had the K been fulfilled. A party has a duty to try and mitigate the damages. Under the UCC a seller has several options to them when the Buyer breaches. A can sue for the K price of the goods or he can obtain the difference in the K price and the fair market value of the goods. He could also get any consequential damages or incidental damages that occurred from M’s breach. Consequential damages are only available if at the time of the contract the damages were foreseeable as would happen in the case of a breach. Incidental include attorney’s fees or any damages as a result of A or M trying to cover or mitigate their damages.

Here A would argue that he is entitled for the fair market value of his goods times the quantity each month. M would argue that A breached the contract and she should be entitled to cover and get the difference in the price between her covering of damages and the value of the K with A.

The court would look at the FMV of the goods at the time of the breach. Here the court will have to determine when the K was actually breached. If they determine it was breached in mid June or beyond then the FMV would be $7, but if it was before then it would be $6. Also, what the K price was would have to be determined. The original K price was for $5. A will argue that the contract was adequately modified to $6. Normally parties have to give consideration to modify a K, but under the UCC a party need not give consideration as long as the modification was done in good faith. Here the price went up and A requested an alteration. M agreed to the alteration and they reaffirmed it in writing. Since this is sale of goods over $500 the modification would have to be in writing as was the case here. As such the K was modified and the K price used in determining damages would be $6 a widget.

A would need to try and sell his widgets to other parties to mitigate his damages. If A was a volume seller though and he could obtain as many widgets as he would need to perform other K and this K he could try and obtain damages under loss volume seller. Under the loss volume seller he would be awarded the profit he would have made off of this sale. They would deduct the overhead and expenses from the K and that would be A’s profit.

Equity -- under equity certain damages as allowed in monetary damages would not suffice. SP is only allowed in cases where the goods are unique, here we have widgets and they are not unique. As such, A would not be entitled to specific performance of this contract because money damages would suffice.

FEBRUARY 2009 BAR EXAMINATION - CONTRACTS

Albert is a distributor of widgets. He purchases widgets from widget makers and sells them to factories. Widgets are standard goods used in factories. Mindy owns such a factory.

Albert and Mindy signed a contract with a term of one year that commenced in January. The contract provided that Albert would make monthly deliveries of 10,000 widgets to Mindy’s factory at a price of $6 per widget. Delivery was to occur on the first of each month. At the time of contract, Albert’s cost for widgets was $5. The market price for widgets was $6.

Albert delivered 8,000 widgets in April and 7,000 widgets in May. Mindy accepted and paid for the widgets. On May 10th, Mindy contacted Albert regarding the shortages. Albert stated his cost for widgets had risen to $6. Mindy and Albert signed an addendum changing the contract price to $7 per widget. Albert delivered 15,000 widgets on June 15th. Mindy accepted and paid for the widgets.

Mindy then heard rumors that Albert was on the verge of bankruptcy. On June 20th, Mindy sent Albert a letter demanding he provide written assurances that he could perform. Mindy stated that she would not accept any further deliveries without such assurances.

Albert did not make the July delivery and did not respond to the demand for assurances. On July 25th, Mindy informed Albert she was canceling the contract. Since mid-June, the market price for widgets has been $7.

Your firm has been contacted by Albert. Albert wants to know the following:

what causes of action he may have against Mindy;

what defenses might be raised; and

what damages would be available to him.

Please prepare a legal memorandum addressing these points. 23

SELECTED ANSWER TO QUESTION 1 (February 2009 Bar Examination)

This memo will discuss what causes of action Albert (A) will have against Mindy (M), what defenses might be raised, and what damages would be available to him.

Applicable Law

This contract is for the sale of goods and as such is governed by the UCC. Both of the parties here are merchants so there will be special rules for them under the UCC.

K Formation

To have a contract there must be offer, acceptance, consideration, and no valid defenses. Here the facts state that there was signed written contract between A and M, so it appears they are satisfied. The contract is for a term of one year, but because it is split up into separate payments and delivery dates each month, this would most likely be considered an installment contract.

Defenses to Formation

The defenses to formation are inadequate consideration, mistake, duress, incapacity, intoxication. None of those defenses apply to this fact pattern.

Defenses to Execution

Statute of Frauds -- Under the UCC for a K for sale of goods to be valid it must be in writing, signed by the party charged, and must state a quantity, and give adequate language to indicate there is a contract. We have a signed writing and it states the quantity and gives most terms. This would satisfy the SOF and neither party would be able to challenge there was no contract based in SOF. Further, SOF can be satisfied by delivery of goods in a K for sale of goods and here we have had delivery and payment for several months.

Installment K

When a K can be broken up into separate portions where each portion has performance by each side it can be deemed an installment K. Here, delivery was to be monthly with payments also being monthly. This contract can be broken down into 12 separate installments. A would want to argue that this was an installment contract. As such, a breach of one installment would not be a breach of the entire contract. Further, a breach of one installment may be cured by further installments.

Material v. Minor Breach

When determining a breach it can either be material or minor. To determine if it is material or minor you look to see if the non-breaching party received the benefit of the bargain. To determine that you look to see how much benefit has been given, likelihood the other party will perform, the cost of the other party having to perform. If there has been a material breach of the contract that the non-breaching party does not have to 24

perform their portion of the K and will recover any damages they incur in order to mitigate or cover for the breaching parties breach. Here, A will argue that M materially breached the K on July 25th when she informed him she was canceling the K. The K was for 12 months and she was canceling it halfway through the K. Also, she had received 6 deliveries already and he was one month late on these deliveries. M will argue that A breached the K when he did not deliver the widgets for July and his breach was material. This breach would most likely be deemed minor because it was only one month out of 12. Further, as stated above, this would most likely be determined to be an installment K and as such A should be able to cure this installment on a later installment. Also, M accepted the later shipment of cured goods and as such A had fully performed for his part of the K. A is likely to succeed in this argument and M would be the breaching party in this scenario.

Perfect Tender

M will argue that A had already breached the K earlier when he failed to produce all 10K widgets on two separate months. Under the UCC perfect tender rule a party must deliver the goods in perfect condition on the exact quantity and quality as stated in the K. If the delivering party does not, then they have breached the contract and the non breaching party may accept the goods, reject the goods, or accept any commercially reasonable units and sue for the rest. Here, even if the court found that A breached the perfect tender rule, M accepted the goods. As such she ascented to the contract. Further, under an installment contract A was allowed to cure this shipment with a future shipment and he did with his June shipment of 15K. M would lose this argument as well and A would be deemed to not have breached.

Impracticability or Impossibility

If M argued that A breached the contract earlier when he did not deliver the correct amount in the beginning as stated above. A could argue that it became impracticable because of the change in price of widgets and he would lose money. Impracticability occurs when there is an event that makes performance of one party very difficult and the happening of that event was not foreseen by the parties. Here a raise in price of widgets by $1 would be foreseeable. This would not be a good defense for A.

Anticipatory Repudiation and Adequate Assurances

Albert can argue that M breached their contract when she informed him that she would no longer accept deliveries without assurances. A can argue that this was an anticipatory repudiation. Anticipatory repudiation occurs when one party communicates unequivocally that they will not perform their part of the bargain before their time of performance has arrived. If AR occurs then the non-breaching party has 4 options: (1) treat the K as a total breach and sue immediately, (2) wait for the performance date and sue, (3) treat the contract as rescinded, or (4) do nothing and encourage the other party to perform. Here, A would assert that M’s statement that she not accept further deliveries without assurances was an anticipatory breach and as such he was allowed to perform one of his 4 options. M will argue that she learned that A was on the verge of bankruptcy and was just requesting adequate assurances that the K would be performed. If a party learns that another party may have difficulty performing their 25

portion of the contract they are allowed to suspend their performance and request that the other party give them assurances that the contract will be performed. The other party (A here) needs to respond within a reasonable time and give M adequate assurances that they can perform. Here, A did nothing. He did not respond to the demand and he did not perform his portion of the contract. As such, A was entitled to suspend her performance and treat it as a breach by M. A will argue he had performed every part of the K up until now and so M had no reason to doubt he will perform. Under the law M is allowed to use outside information they obtained in deciding whether or not to try and get assurances. A will argue that her statements went beyond requesting assurances, but a party seeking assurances is allowed to suspend their performance until they receive the assurances. Also, A will argue that M canceled the K in July without waiting for assurances. Over 30 days is not a reasonable time to respond and M would be excused most likely. A would argue though that since this is an installment contract he is able to cure the July sale with further installments and planned on doing so. If A can give M adequate assurances now and make the deliveries the court would most likely be willing to allow it to enforce the K

Damages

When looking at damages the court looks to put the parties in the position they would have been had the K been fulfilled. A party has a duty to try and mitigate the damages. Under the UCC a seller has several options to them when the Buyer breaches. A can sue for the K price of the goods or he can obtain the difference in the K price and the fair market value of the goods. He could also get any consequential damages or incidental damages that occurred from M’s breach. Consequential damages are only available if at the time of the contract the damages were foreseeable as would happen in the case of a breach. Incidental include attorney’s fees or any damages as a result of A or M trying to cover or mitigate their damages.

Here A would argue that he is entitled for the fair market value of his goods times the quantity each month. M would argue that A breached the contract and she should be entitled to cover and get the difference in the price between her covering of damages and the value of the K with A.

The court would look at the FMV of the goods at the time of the breach. Here the court will have to determine when the K was actually breached. If they determine it was breached in mid June or beyond then the FMV would be $7, but if it was before then it would be $6. Also, what the K price was would have to be determined. The original K price was for $5. A will argue that the contract was adequately modified to $6. Normally parties have to give consideration to modify a K, but under the UCC a party need not give consideration as long as the modification was done in good faith. Here the price went up and A requested an alteration. M agreed to the alteration and they reaffirmed it in writing. Since this is sale of goods over $500 the modification would have to be in writing as was the case here. As such the K was modified and the K price used in determining damages would be $6 a widget. 26

A would need to try and sell his widgets to other parties to mitigate his damages. If A was a volume seller though and he could obtain as many widgets as he would need to perform other K and this K he could try and obtain damages under loss volume seller. Under the loss volume seller he would be awarded the profit he would have made off of this sale. They would deduct the overhead and expenses from the K and that would be A’s profit.

Equity -- under equity certain damages as allowed in monetary damages would not suffice. SP is only allowed in cases where the goods are unique, here we have widgets and they are not unique. As such, A would not be entitled to specific performance of this contract because money damages would suffice.

However, Sayles will defend by arguing that Bud breached the contract when he substantially increased his requirements. Under the UCC a seller may be excused from performing under a requirements contract if the other party substantially increases their requirements. Here, Sayles will argue that when Bud doubled the number of RCU’s previously ordered per month, he was excused from performance. Bud will argue that by the terms of the contract Sayles was required to supply all of Bud’s RCU’s and thus, should perform as obligated. However, this argument is likely to fail because Sayles is excused from performing.

Sayles will also argue that they tried to modify the contract. Under the UCC a modification need only be done in good faith. Sayles will argue that they tried to modify in good faith for the price increase because the price of components rose dramatically. However, generally price increases are not enough to excuse a party from performing.

Sayles may also try to argue that they are excused from performing because it was impossible or impracticable to do so. Enforcement of an agreement is impossible when there is no way a party can perform under a contract. It is impractical when there is an unforeseen occurrence that renders performing very difficult. Again Sayles will probably lose under this argument because price increases are generally foreseeable. Sayles will argue that they should not be forced to perform a contract where they lose money, however, courts generally find that that is a risk parties take when doing business and that he markets can fluctuate. Sayles will likely lose on this argument.

Damages. There are a number of remedies available to Bud. First under the UCC Bud may elect to get cover. Bud may get the difference between contract price and the cost to buy RCU’s from a new seller. Bud may also get market price which is the difference between the contract price and the fair market value of RCU’s. Bud may want expectation damages. The purpose of these damages are to put the plaintiff in the position he would be in as if the contract had been performed. He may also get incidental damages, which is just any additional cost or expense Bud incurred as a result of Sayles’ breach. Bud may also get consequential damages if Sayles was aware of the potential for consequential damages and they were foreseen. Also, the contract provided for liquidated damages. If the court finds the contract enforceable, Bud may elect liquidated damages. Liquidated damage clauses must be reasonable. Here, Bud could get $10 per unit for each unit not supplied by Sayles. This clause is likely unreasonable. Sayles would be forced to pay 50% of the contract price per RCU they don’t supply. 50% is very high, reasonable liquidated damages usually should not exceed 20%.

Sayles might argue this provision is so unreasonable it is unconscionable. An agreement is unconscionable when it is so onesided that a court should not enforce it. This is likely not unconscionable but the clause is unreasonable and thus should not be enforced.

Also, Sayles will argue they did not breach the contract because they sent an offer to modify the price to $35 per unit and this request was in good faith. However, Bud timely rejected this modification/new offer thus, it was invalid because there was no acceptance. Also, Bud would argue there was no consideration because Sayles was already under a duty to perform at $20 per unit.21

Under the UCC Bud could also try for equitable remedies. Equitable remedies are appropriate when damages at law are inadequate.

Specific performance is appropriate when the good is rare or unique. Here RCU’s are not rare or unique. So this is inappropriate. Also other remedies like recission, & reformation are inappropriate.

Attorneys fees. A party may contract for reasonable attorney’s fees. Under the FRPC fees must not be excessive and must be based on the amount of work, a lawyer’s skill, what is normally charged in the area. Here if the fees are reasonable a party may contract for prevailing party fees.

Also, circuit court is appropriate for actions at law exceeding $15,000. Here, Bud may have a claim in excess of that and may go to circuit court. Parties may not stipulate venue, it must be where defendant resides, business located, or cause of action occurred.

Also as stated earlier terms of contract may be implied. Course of dealing, custom and usage, as well as prior dealings may be looked to by the court as a supply of terms. Here, Sayles argument that method of communication was blank may be implied by the three ways above. Here, Sayles faxed an offer and Bud faxed a rejection. Thus, the court may imply the term of communication of orders is to be by fax since both parties have used that in their course of dealing and performance.