Innovative Corporation is an advertising agency. Luxe Spas, Inc. is an all purpose spa chain that caters to individuals who want a total spa experience from the latest massage therapies to nutritional advice. Luxe wanted to create a new brochure and requested a number of advertising agencies to off er a mock-up for their review. Innovative was chosen to prepare the new brochure and advertising campaign. Th e estimated costs of the brochure were $10,000 including the labor, layout, copy, edit, and design. Th e parties signed a purchase order which included the purchase of 20,000 brochures to start. Th e purchase order which was on Luxe Spas letterhead stated: Order is to be in accordance with the description below including delivery, prices, and specifi cations: 15-page full color brochure which includes, design, copy, edit, layout, typesetting, and materials. Th e total cost is $10,000. s/ Luxe Spas by its President Arlene Springfi eld Both Innovative and Luxe worked together to create a brochure that was cutting edge. After both parties agreed on the basic text and presentation of the brochure, Innovative began presenting the design mock-ups for a 15-page brochure. At least fi ve mock-ups were sent to Luxe, all of which were rejected. Luxe was not pleased with any of the mock-ups and sent Innovative a letter cancelling the contract. Th e letter stated that they would complete the brochure in house. What Innovative later found out was that Luxe hired another company who charged only $6,500 for the brochures. Luxe used most of Innovative’s design. Innovative sent Luxe an invoice for $7,500 representing the cost of the labor, materials, and taxes for the work performed to date. Luxe refused to pay. a. What law applies to this transaction—the common law of contracts or the Uniform Commercial Code? b. Did Luxe Spas breach the contract? c. Would Innovative be entitled to any damages? Explain in detail the basis of your responses.