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SOUTH-WESTERN LEGAL STUDIES IN BUSINESS CASE UPDATES—SALES
SW Legal's Case Updates is a SW Legal Studies service to provide briefs of the latest state and federal court cases. Review the summaries and, for cases of interest, select the case brief. If you cannot find a case of interest, return to Topic Index .
Title
Summary
Clear Terms in Bill of Lading Control Liability for Goods Stolen in Shipment
Briefed Case
Shipper signed a bill of lading limiting damages in a shipment to $10,000. Over $1 million worth of goods were stolen in shipment. The trial court dismissed suit by shipper, noting that the terms of liability in the bill of lading were clear.
(Updated November 2010)
Buyer Beware Applies to Vehicles Bought from the Government
Briefed Case
Appeals court held that the government had no obligation to find and remove all illegal drugs inside a car the government seized from drug smugglers. When a buyer of the car was later imprisoned when the drugs were discovered, the buyer could not sue because the car was sold "as is."
(Updated April 2010)
Buyer May Not Pursue Damages Restricted by Terms of Contract
Briefed Case
Appeals court held that a commercial buyer of a boat, that was claimed to be defective, failed to pursue the exclusive remedy provided in the contract agreement. The other claims made by the buyer were prohibited by the contract.
(Updated April 2010)
Breach of Warranty for Selling Goods Subject to Claim of Trademark Infringement
Briefed Case
Appeals court held that the supplier of goods breached an implied warranty under the UCC that goods would be free of rightful claims of infringement by another party. Although the claim in this case failed, it was not a frivolous claim, so the seller breached its warranty to the buyer.
(Updated December 2008)
UCC Contracts Do Not Allow Tort Claims
Briefed Case
Wisconsin high court held that a contract governed by the UCC allows for possible damages for breach of contract or warranty, but it does not allow for tort claims. Were tort claims allowed, parties would have little ability or incentive to construct bargains that allocate risk.
(Updated November, 2005)
UCC Warranty Rights Not Eliminated by Lemon Law for Defective Cars
Briefed Case
Missouri appeals court held that while the statute of limitations may have run out under the state Lemon Law concerning defective new vehicles, the buyers had the right to bring warranty claims under the UCC, which has a longer statute of limitations.
(Updated July, 2005)
Cigarette Death Suit May Proceed Under UCC Claim
Briefed Case
Appeals court held that under Alabama law the estate of a deceased smoker could not bring suit against cigarette makers in tort, but it could proceed on the basis that cigarettes were not fit for use by consumers and so breached the implied warranty of merchantability.
(Updated December, 2004)
Sale of Unfinished Goods Is Sale of Goods, Not Service, under the UCC
Briefed Case
Appeals court held that the UCC governed a contract, not the common law, as the primary value in the contract was the provision of unfinished goods to be used by the buyer in its production. That is a sale of goods, not a service.
(Updated November, 2004)
Buyer Has Remedy Against Seller, Not Manufacturer, in Case of Revocation of Sale
Briefed Case
Appeals court affirmed that when a buyer revokes a sale, which places the parties in the position they were before the sale occurred, the cause of action is against the seller of the goods, not the manufacturer, even if defect of the goods is the primary reason for the revocation.
(Updated May, 2003)
Oral Modification of Contract Rejected; Buyer May Collect Consequential Damages from Seller's Breach
Briefed Case
Appeals court held that an alleged oral modification of a contract, which would control the outcome of the claim of breach, was to be rejected because it was inconsistent with other evidence. Because of the seller's breach, the buyer could collect consequential damages.
(Updated April 1, 2001)
Purchase Order Was An Offer, It Did Not Create a Contract
Briefed Case
Appeals court affirmed dismissal of suit by buyer who submitted an order to buy a product based on an earlier discussion of the price of the product. The order to buy was an offer that was then rejected by the seller, so no contract was formed and there was no breach.
(Updated September 1, 2000)
Motor Home Was Not Fit for Particular Purpose
Briefed Case
Appeals court upheld an award of damages to consumer who bought a new motor home and had specifically discussed the power and braking needs, which the vehicle did not live up to. This was breach of warranty of fitness for a particular purpose for which damages could be awarded.
(Updated September 1, 2000)
Industry Trade Usage Determines Damages When No Contract to the Contrary Produced
Briefed Case
Appeals court affirmed that the seller of bottle-labeling equipment was correct in its assertion that, in a case where its equipment failed to operate as promised, a refund was the proper remedy. Since the parties lost the original contract, the court relied on trade usage, which was shown to be a refund, and did not include consequential damages suffered by the bottler.
(Updated November 1, 1999)
Arbitration Provision in Consumer Sales Contract Held Unconscionable
Briefed Case
A New York appeals court held that Gateway's standard sales clause requiring arbitration of disputes under the rules of the International Chamber of Commerce was unconscionable under the UCC because the cost of arbitration generally exceeded the cost of the products involved.
(Updated September 1, 1999)
Sale of Used Boat with Hidden Major Defect Subject to Recission
Briefed Case
Louisiana appeals court held that the purchase price of a used power boat, sold by a consumer to a consumer, should be refunded since the boat contained major defects that rendered it useless and the defects could not be uncovered by a person not skilled in examining such equipment.
(Updated June 1, 1999)
Proper Tender of Goods Depends on Terms of Contracts
Briefed Case
Michigan high court held that a manufacturer that only agreed to sell goods did not have an obligation to install or test the goods, so the statute of limitations regarding the sale ran from the time the goods were properly tendered.
(Updated May 1, 1999)
Purchase Order Need Not Be Signed for There to Be Acceptance
Briefed Case
Hong Kong buying agent accepted a contract, and its arbitration requirement, when it showed agreement by fulfilling the terms of a purchase order, rather than by signing the order.
(Updated 4-6-98)
Written Warranty May Be Void if Goods Accepted Subject to Oral Qualifications
Briefed Case
The authenticity of a painting sold with a warranty was unclear. The dealer said he told the buyer of its history; the buyer says no. Summary judgment for breach of warranty not proper; material facts need to be determined at trial.
(Updated 12-29-97)

Borden Pays Big Clams for Breach of Good Faith
Briefed Case
New Jersey Supreme Court affirms judgment of trial court for breach of UCC section 1-203 which imposes the obligation of good faith in the performance of a contract.
(Updated September 12, 1997)

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