C A S E P R O B L E M S
While adjusting a television antenna beside his mobile home and underneath a high-voltage electric transmission wire, Prince received an electric shock resulting in personal injury. He claims the high-voltage electric current jumped from the transmission wire to the antenna.
The wire, which carried some 7,200 volts of electricity, did not serve his mobile home but ran directly above it.Prince sued the Navarro County Electric Co-Op, the owner and operator of the wire, for breach of implied warranty of merchantability under the Uniform Commercial Code.
He contends that the Code’s implied warranty of merchantability extends to the container
of a product in this instance the wiring and that the escape of the current shows that the wiring was unfit for its purpose of transporting electricity.
The electric company argues that the electricity passing through the transmission wire was not being sold to Prince and that,therefore, there was no sale of goods to Prince. Is the contract covered by the Code? Explain.
HMT, already in the business of marketing agricultural products, decided to try its hand at marketing potatoes for processing. Nine months before the potato harvest,HMT contracted to supply Bell Brand with one hundred thousand sacks of potatoes.
At harvest time, Bell Brand would accept only sixty thousand sacks. HMT sues for breach of contract. Bell Brand argues that custom and usage in marketing potatoes for processing allows buyers to give estimates in contracts, not fixed quantities, because the contracts are established so far in advance. HMT responds that the quantity term in the contract was definite and unambiguous. Can custom and trade usage be used to interpret an unambiguous contract? Discuss.
Schreiner, a cotton farmer, agreed over the telephone to sell 150 bales of cotton to Loeb & Co. Schreiner had sold cotton to Loeb & Co. for the past five years. Written confirmation of the date, parties, price, and conditions was mailed to Schreiner, who did not respond to the confirmation in any way.
Four months later, when the price of cotton had doubled, Loeb & Co. sought to enforce the contract. Is the contract enforceable?
American Sand & Gravel, Inc., agreed to sell sand to Clark at a special discount if 20,000 to 25,000 tons were ordered. The discount price was $0.45 per ton, compared with the normal price of $0.55 per ton.
Two years later, Clark orders and receives 1,600 tons of sand from American Sand & Gravel. Clark refuses to pay more than $0.45 per ton. American Sand & Gravel sues for the remaining $0.10 per ton. Decision?
In September, Auburn Plastics (defendant) submitted price quotations to CBS (plaintiff) for the manufacture of eight cavity molds to be used in making parts for CBS’s toys. Each quotation specified that the offer would not be binding unless accepted within fifteen days.
Furthermore, CBS would be subject to an additional 30 percent charge for engineering services upon delivery of the molds. In December, CBS sent detailed purchase orders to Auburn Plastics for cavity molds.
The purchase order forms stated that CBS reserved the right to remove the molds from Auburn Plastics without an additional or “withdrawal” charge. Auburn Plastics acknowledged the purchase order and stated that the sale would be subject to all conditions contained in the price quotation. CBS paid Auburn for the molds, and Auburn began to fabricate toy parts from the molds for CBS.
Later, Auburn announced a price increase, and CBS demanded delivery of the molds. Auburn refused to deliver the molds unless CBS paid the additional charge for engineering services.
CBS claimed that the contract did not provide for a withdrawal charge. Who will prevail? Why?
Frank’s Maintenance and Engineering, Inc., orally ordered steel tubing from C.A. Roberts Co. for use in the manufacture of motorcycle front fork tubes. Because these front fork tubes bear the bulk of the weight of a motorcycle, the steel used must be of high quality.
Roberts Co.sent an acknowledgment with conditions of sale including one that limited consequential damages and restricted remedies available upon breach by requiring claims for
defective equipment to be made promptly upon receipt.
The conditions were located on the back of the acknowledgment. The legend “conditions of sale on reverse side”was stamped over so that on first appearance it read “No conditions of sale on reverse side.” Roberts delivered the order in January.
The steel had no visible defects; however, when Frank’s Maintenance began using the steel in its manufacture in the summer, it discovered that the steel was pitted and cracked beyond repair. Frank’s Maintenance informed Roberts Co. of the defects, revoked its acceptance of the steel, and sued for breach of warranty of merchantability. Is the limitation of rights enforceable?
Why or why not?
15. Dorton, as a representative for The Carpet Mart, purchased carpets from Collins & Aikman that were supposedly manufactured of 100 percent Kodel polyester