BCOR 2003 Business Law Ethics and Social Responsibility- Nonconforming Goods
Scenario 1
Under the Uniform Commercial Code, if a buyer receives goods that are “Nonconforming” the buyer has a “reasonable time” to reject those goods, otherwise the buyer is treated as having accepted the goods even though they are nonconforming. The two general ways that goods are non-conforming are if the seller delivers (1) defective goods or (2) incorrect goods (goods different from those ordered). Thus, if the buyer fails to reject within a reasonable time, the buyer his lost its right to return the goods and must pay for them despite their being non-conforming.
Here are some cases where a court determined whether or not a buyer had rejected nonconforming goods within a reasonable time:
- Grocery store had notrejected within a reasonable time when it rejected a truckload of bananas 3 days after they had arrived. The buyer had noticed, upon arrival, that the bananas were overly brown.
- Ski shop had rejected within a reasonable time when it rejected a shipment of 200 snowboards 15 days after arrival after noticing (5 days after arrival) that the top surface of all of the snowboards contained discoloration).
- Grocery store had rejected within a reasonable time when it rejected a shipment of 144 boxes of energy bars 7 days after arrival because it noticed the day that they arrived that all of them were the incorrect flavors.
Case Discussion
1. In 4 to 5 sentences explain in general how a court would use the precedent cases above in future disputes over the interpretation of a “reasonable time” to reject goods.
For each of the scenarios, the question for the court is whether or not the rejection of the non-conforming goods was made within a reasonable time. Explain how you think that the case might turn out and how the precedent would support that outcome. If you think that either outcome is possible, explain how a court would use precedent to support each of those outcomes. In most cases you should be able to give good, complete responses with no more than 4 or 5 sentences to each scenario. Assume that the judges will follow precedent (won’t make a decision that contradicts the decided cases). Take all the facts as correct. For the precedent cases, you know only what is stated above. You do not know exactly which aspect(s) of the facts was most important to the judge in deciding if the rejection was done within a reasonable time or not.
2. A ski shop noticed the day of delivery that the 120 pairs of boots ordered were the wrong models. It rejected the boots 8 days after delivery.
3. A grocery store noticed the day of delivery that the 100 roses received were red (they were supposed to be white) and rejected them 4 days after delivery.
4. A shop in Sun Valley Idaho, which was in the path of totality for the August 21 Solar eclipse ordered 200 T shirts that were delivered on July 31. Two days later, on August 2, the store realized that the word “Solar” on the shirts was incorrectly spelled as “Soler.” The shop rejected them on August 8, 8 days after arrival.
5. A roofing contractor had ordered asphalt roofing shingles for a residential customer’s roofing project. The contractor received the shingles on June 1, noticed that they were the wrong color on June 2, and rejected them just over a month later on July 3.
Scenario 2.
Mark lives in Memphis, Tennessee. Memphis is located very close to both Mississippi and Arkansas. For questions 6-10, answer in a few sentences at most.
6. Mark was visiting the town of Little Rock, Arkansas and was involved in a 2 car accident. The other driver lives in Little Rock. If Mark were to sue the other driver, which state or states would have personal jurisdiction over the other driver and why?
7. Mark was visiting the town of Little Rock, Arkansas and was involved in a 2 car accident. The other driver lives in Little Rock. If the other driver were to sue Mark, which state or states would have personal jurisdiction over Mark and why?
8. Mark was visiting the town of Little Rock, Arkansas and was involved in a 2 car accident. The other driver lives in Atlanta Georgia. If Mark were to sue the other driver, which state or states would have personal jurisdiction over the other driver and why?
9. Mark was visiting the town of Little Rock, Arkansas and was involved in a 2 car accident. The other driver lives in Little Rock. Which state or states could exercise personal jurisdiction over Mark in a criminal case?
10. Assume that Mark starts a mobile dog grooming business and purchases a van for this purpose. How will it be determined if a state can exercise jurisdiction over the dog grooming business if that business is named as a defendant in a civil lawsuit related to the business.
Answers
1. As provided by the above discussed precedents it is up to the court to determine whether a time of rejection by the buyer is reasonable or not. In relation to the first grocery store precedent the court had held that the time of three days was not reasonable by stating the bananas were brown. The court in future also will take into account the nature of the goods to determine reasonable time. In the case of Ski shop the nature of the goods were not perishable thus thee court allowed the time of rejection for 15 days. In the third case the energy bars were not perishable in nature thus even when the defect was seen in the first day itself the court found the tome of seven days as reasonable time. Thus in future is the nature and purpose of the goods would be considered by the court to interpret that a time is reasonable or not as per the above discussed precedents.
2. Here the facts of the case are that ski had noticed on the day of delivery itself that the 120 pairs of boot which had been ordered were of the wrong model. The goods have been rejected 8 days after the delivery has been made. As per the above discussed precedent the court ruled that energy boxes which were of the wrong flavor had been rejected on 7 days after delivery where the defect was located on the day of delivery itself is within a reasonable time. The fact of this precedent are similar to that of the case in hand. Therefore by using the precedent it can be analyzed that the court would interpret 8 days if rejection as a reasonable time.
3. In this scenario the facts of the case are that the grocery store has noticed on the date of delivery that against the order of white roses 100 roses which have been received are red. The roses have been rejected within 4 days of delivery. In the first precedent it has been provided by the court that rejecting bananas within 3 days after finding out on the same day of delivery that they are overly brown did not account to reasonable time. Thus in this case also the rejection of the roses would not be considered as reasonable time.
4. In this scenario the facts of the case are that Sun Valley Idaho had ordered 200 T-shirts for 21st august solar eclipses. The T-shirts had wrong prints which were discovered 2 days after the delivery had been made. The T-shirts based on the wrong print had been rejected within 8 days of the delivery. In the third precedent it had been provided by the court that energy boxes which were of the wrong flavor had been rejected on 7 days after delivery where the defect was located on the day of delivery itself is within a reasonable time. In this case also the court would in accordance to the precedent determine the time to be within the reasonable limit.
5. In this scenario the facts of the case are that asphalt roofing shingles had been ordered by a roofing contractor for a residential project. The shingles were received by the contractor on 1st june. It was noticed by the contractor that they were not of the color which have been ordered the next day when the delivery was made. The goods were rejected after a month on 3rd July by the contractor. As provided in the second precedent the court held that it is reasonable time to reject the goods after 15 days day had arrived and the defect was identified five days latter. In this case also the facts are similar to that of the precedent. Therefore it can be said that the court would interpret the rejection period of 30 days as a reasonable time.
6. According to the facts of the scenario Mark resides in Memphis, Tennessee. The place is located closely to both Arkansas and Mississippi. Mark had been involved in a car accident in the town of Little Rock, Arkansas. A court has limited jurisdiction power but has the power to exercise personal jurisdiction in certain circumstances (Klerman, 2014). The other driver which was involved in the accident was a residence of Little Rock. In this case the state of Arkansas would exercise personal jurisdiction over the defendant as the defendant is a resident of such state and it is a universal principle.
7. In this situation Mark had been involved in a car accident in the town of Little Rock, Arkansas. The other driver which was involved in the accident was a residence of Little Rock. A court has limited jurisdiction power but has the power to exercise personal jurisdiction in certain circumstances. The other driver which was involved in the accident was a residence of Little Rock. If the other driver want to sue mark the state of Arkansas would have the personal jurisdiction as Mark has made a contract with the state as the accident was committed there.
8. In this scenario the facts are that Mark had been involved in a car accident in the town of Little Rock, Arkansas. A court has limited jurisdiction power but has the power to exercise personal jurisdiction in certain circumstances. The other driver which was involved in the accident was a residence of Atlanta Georgia. In this case the state of Arkansas would exercise personal jurisdiction over the defendant as the defendant has caused the accident in the state and all states have been provided with a motorist status according to which their court can decide a case of accident taking place on their roads (Dodge & Dodson, 2017).
9. When it comes to a criminal case a court has personal jurisdiction over a defendant if the crime was committed by the defendant within the geographical jurisdiction of the courts. A federal court has jurisdiction over a defendant committing a crime anywhere in the country. A state court has jurisdiction over the defendant with respect to a crime in its territories. Thus in this case as mark committed the accident in Little Rock, Arkansas, the court of Arkansas would have personal jurisdiction over Mark.
10. According to the minimum contact rule a state has the power to exercise personal jurisdiction over a business which is not within the ordinary jurisdiction of the state court if it is found that such business had minimum contract with the state. Thus as per the facts of the scenario the grooming van if travels to the state which have claimed personal jurisdiction in civil suit and thus making minimum contact within would be enough to determine the exercise of personal jurisdiction by the state.
References
Dodge, W. S., & Dodson, S. (2017). Personal Jurisdiction and Aliens.
Klerman, D. (2014). Rethinking personal jurisdiction. Journal of Legal Analysis, 6(2), 245-303.
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