University:
Indiana University Bloomington
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

113

Pages:

2
Author:

bratrochanter

Key Issues and Analysis in Sarah Saunders' Hybrid Vehicle Purchase: 1. Right to Inspect Before Payment: o Issue: Sarah was denied the chance to inspect the vehicle before paying in full, contrary to UCC provisions that typically allow buyers the right to inspect goods before finalizing payment. o Analysis: The UCC §2–513 generally provides buyers the right to inspect goods upon delivery before paying. Refusal by the dealer's agent (the truck driver) to allow inspection likely violated Sarah’s rights under the UCC. 2. Rejection for Nonconforming Goods: o Issue: The car had visible scratches and missing features such as the CD player Sarah requested, making it nonconforming to their contract. o Analysis: Under UCC §2–601, buyers can reject goods if they fail to conform to the contract terms. Sarah could have rightfully rejected the vehicle due to the defects and missing options, requiring the dealer to provide a replacement that met her specifications. 3. Returning the Vehicle for a Defective Engine: o Issue: The vehicle had persistent mechanical issues, including a tendency to stall, which were not resolved after multiple repair attempts. o Analysis: Under UCC §2–608, Sarah can revoke acceptance if a defect substantially impairs the value of the goods and if it wasn’t discovered at the time of acceptance. Since the dealer failed to fix the problem despite multiple attempts, Sarah may argue her right to return the vehicle and either demand a replacement or refund. 4. Ethical Implications of Delivering a Defective Vehicle: o Issue: If the dealer knew about the scratches, missing features, and mechanical issues, delivering the vehicle without disclosure may breach ethical standards of good faith and fair dealing. o Analysis: The UCC §1–203 requires all parties to act in good faith. Concealing known issues contravenes this duty, potentially undermining trust and ethical standards, especially when selling to consumers who rely on seller expertise and honest disclosure. Legal Framework for Sales Contract Performance   Good Faith (UCC §1–203): Both parties must perform honestly and in accordance with reasonable commercial standards. Course of Dealing & Usage of Trade (UCC §1–205): The history of transactions and trade customs can clarify contract terms but do not override explicit contract terms.    Inspection Rights (UCC §2–513): Buyers generally have the right to inspect goods before payment unless explicitly waived. Acceptance and Revocation (UCC §§2–601 and 2–608): Buyers can reject nonconforming goods or, after acceptance, revoke it if the defects substantially impair value. Modification and Waiver (UCC §2–209): Contracts can be modified without consideration if agreed to by both parties, and waivers can be retracted with reasonable notice unless reliance on the waiver makes it unjust. In summary, Sarah’s situation highlights rights regarding inspection, rejection, revocation, and ethical dealings in sales contracts. The UCC provides various protective measures for buyers facing nonconforming goods or breach of good faith, which Sarah could potentially leverage to seek a resolution.