Quiz 26: Obligations and Performance

Business

Refer to the case Smith v Penbridge Associates (655 A2d 1015). Case Issue The issue is whether plaintiff (buyer ) had made a rejection in reasonable time of nonconforming goods provided by defendant (seller). The buyer was supposed to receive breeding pair (male and female) emus but received two male emus instead. Trial court held for buyer. Seller appealed the decision. Relevant Terms, Laws, and Cases UCC 2-601 2-602 - 2-601 States that buyer has the right to reject nonconforming goods, however, they must do so within reasonable time after delivery of goods (2-602) Opinion State Superior court affirmed the decision. The buyers are owed damages from seller. The seller argued that the buyers should have made an inspection earlier, but the court disagreed. Court argued that the emus' sex was not easily observable and requires a method known as "sex venting" which is dangerous to the buyers to do so. When the buyers had inspected the emus' sex they found it was nonconforming and informed the sellers immediately. Hence, the court believed the buyers inspected the product in a reasonable time. Furthermore, the court noted that seller had an express warranty which states the emus were proven breeder pair. Hence, the seller can't blame buyer for not making inspections earlier.

Refer to the case Central District Alarm v Hal-Tuc (886 SW2d 210). Case Issue The issue is whether plaintiff (seller ) has the right to cure defect after defendant (buyer) rejected its products. Trial court held for buyers. Seller appealed the decision. Relevant Terms, Laws, and Cases UCC 2-601 2-602 - 2-601 States that buyer has the right to reject nonconforming goods, however, they must do so within reasonable time after delivery of goods (2-602) UCC 2-508 - allows the seller to cure defects of nonconforming products, as long as contract has not expired and seller notifies buyer within a reasonable time. Opinion Higher court affirmed the decision on seller's claim, but reversed the decision for buyer's counterclaim. The court argued that while seller did have a right to cure defect, they must do so within a reasonable time. The court found that seller knowingly installed the nonconforming product. When buyer informed of this nonconformity to seller, the seller responded two weeks later. Hence, the court doesn't believe that seller attempted to cure defect in a reasonable time period.

Refer to the case Alamance County Board of Education v Bobby Murray Chevrolet (465 SE2d 306). Case Issue The issue is whether the defendant (seller) had a commercial impracticability defense when a new law made his products illegal and when the plaintiff (buyer ) had given them extensions to find products which conformed to regulations. Trial court granted summary judgment in favor of buyer. Seller appealed the decision. Relevant Terms, Laws, and Cases UCC 2-615 - gives seller a defense in case goods are not delivered if there is some unforeseeable event that prevents seller from delivering the goods. Opinion Higher court affirmed the decision. The court held that seller did not have a commercial impracticability event. They argued that seller assumes foreseeable risk such as if the seller's supplier could not deliver to the goods to the seller, then seller is still liable to buyer. Furthermore, the court found that seller had knowledge that his supplies may not be produce in time. Hence, the seller can't argue he was unaware of non delivery of needed goods.

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