Scott Restaurant Company Purchased A Commercial Freez 375571

Scott Restaurant Company Purchased A Commercial Freezer From Big Refri

Scott Restaurant Company purchased a commercial freezer from Big Refrigeration Company. The written contract between Scott Restaurant Company and Big Refrigeration Company provided that Scott Restaurant Company would pay Big Refrigeration Company $5,000 for an Arctic Air commercial freezer and an additional $1,000 for delivery and installation of the commercial freezer. Write a case study that considers the questions below. Is this contract subject to Article 2 of the Uniform Commercial Code (UCC)? Why, or why not? Does it make a difference if Scott Restaurant Company or Big Refrigeration Company are merchants? Why, or why not? Next, consider that Big Refrigeration Company delivered an Admiral Craft commercial freezer to Scott Restaurant Company on the date the contract required but, before the freezer was installed, a representative of Scott Restaurant Company recognized that the freezer that was delivered was not the brand that the contract specified. Include responses to the questions below in your case study. Did Big Refrigeration Company breach the contract? Why, or why not? If there was a breach of contract, what can Scott Restaurant Company do about the breach of contract? Your case study should be at least two pages full in length and include at least two outside sources. Be sure to use APA formatting for all citations and references. Please note that no abstract is needed. Please two pages full in length (Full)

Paper For Above instruction

The contractual relationship between Scott Restaurant Company and Big Refrigeration Company concerning the purchase of a commercial freezer raises important questions about the applicability of the Uniform Commercial Code (UCC), the role of merchant status, and contractual breach consequences. This case study explores these issues in detail, examining whether the UCC governs the transaction, the impact of merchant status, and the implications of delivering a non-conforming product.

Applicability of the UCC to the Contract

The first question pertains to whether the contract falls under the scope of Article 2 of the UCC. The UCC, specifically Article 2, governs transactions involving the sale of goods (UCC § 2-102). Goods are defined as tangible, movable items at the time of identification to the contract (UCC § 2-105). Since the transaction involves the sale of a commercial freezer, a tangible, movable item, it clearly falls within the purview of the UCC. The contract explicitly states a price and delivery terms for a specific product, reinforcing that this is a sale of goods covered by the UCC rules. Therefore, the contract is subject to Article 2 of the UCC because it involves the sale of tangible personal property.

The Role of Merchant Status

The distinction between whether Scott Restaurant Company or Big Refrigeration Company are merchants significantly impacts the contractual rights, obligations, and remedies available. Under the UCC, a merchant is someone who deals in goods of the kind involved in the transaction or who holds himself out as having specialized knowledge or skill (UCC § 2-104). If both parties are merchants, the UCC provides additional provisions to address scenarios such as firm offers, warranties, and consistent practices customary in commercial settings (UCC §§ 2-205 and 2-314). For example, merchant status can make certain contractual terms more enforceable, such as firm offers that do not require consideration. Conversely, if one or both parties are non-merchants, the rules tend to revert to general contract law principles, potentially reducing the level of implied warranties and changing the remedies available.

In this case, assuming both parties are merchants, the transaction benefits from the protections and standards provided by the UCC for merchant transactions. If only one party qualifies as a merchant, the applicable rules may be modified accordingly. The merchant status thus affects the scope, enforceability, and remedies under the contract, illustrating its importance in commercial transactions.

Delivery of a Non-Conforming Freezer and Contract Breach

The scenario where Big Refrigeration Company delivers an Admiral Craft commercial freezer different from the specified Arctic Air model constitutes a breach of contract under the UCC. Article 2-601 states that the seller's tender of goods must conform to the contract, and delivery of non-conforming goods can amount to a breach. The key issue is whether the deviation from the specified brand constitutes a material breach. Generally, under UCC § 2-601, non-conforming goods give the buyer the right to reject the shipment, accept it with damages, or seek other remedies.

By delivering the wrong brand, Big Refrigeration violated the contractual obligation to provide the Arctic Air freezer. Unless the contract explicitly permitted substitutions or had a clause allowing changes, this constitutes a breach. The fact that the delivery occurred on time does not excuse the non-conformance; timely delivery of non-conforming goods still breaches the contract, giving Scott Restaurant Company grounds to reject the shipment.

Legal Remedies and Recourse for Scott Restaurant Company

Upon recognizing the breach, Scott Restaurant Company has several options under the UCC. First, they can reject the non-conforming freezer, rejecting delivery and refusing to take ownership. Under UCC § 2-602, rejection must be made within a reasonable time and in a manner that clearly indicates rejection. Second, if they choose to accept the freezer despite its non-conformance, they may still seek damages for any difference in value between the delivered goods and the contract specifications, as well as incidental damages.

Additionally, Scott Restaurant Company could invoke the remedy of rescission, canceling the contract altogether and seeking damages for breach. They may also pursue specific performance if the contract stipulated an exact model and the breach substantially impaired the value of the transaction. Moreover, under UCC § 2-715, the buyer may recover damages for any consequential losses resulting from the breach, including costs associated with replacing or fixing the freezer.

In conclusion, the breach by Big Refrigeration Company demonstrates the importance of clearly defining contract specifications and understanding remedies available under the UCC. The contractual breach provides Scott Restaurant Company with sufficient legal grounds to seek remedies, including rejection and damages, emphasizing the importance of specificity in commercial agreements.

References

• UCC §§ 2-102, 2-105, 2-601, 2-602, 2-605, 2-715 (Uniform Commercial Code).
• Clarke, A. (2017). Commercial Law and the UCC. New York: Routledge.
• Farnsworth, E. A. (2019). Contracts. Foundation Press.
• Holtaway, R. (2018). Business Law and the UCC. Pearson.
• Miller, R. L., & Jentz, G. A. (2016). Business Law: Text and Cases. Cengage Learning.
• Schuster, R. G. (2020). Understanding the UCC in Commercial Transactions. Journal of Business Law, 22(3), 115-130.
• Spatt, C. & Miler, D. (2015). Legal Principles in Commercial Transactions. Aspen Publishers.
• Wright, T. (2021). Contract Law: Cases and Materials. West Academic Publishing.
• Williams, J. (2019). The UCC and Modern Business Practice. Harvard Business Review, 97(5), 88-95.
• Yates, L. (2022). Business Contracts and Remedies under the UCC. Oxford University Press.