Breach of Contract

Breach of Contract

Article 2 of the Uniform Commercial Code (UCC)

Article 2 of the Uniform Commercial Code (UCC) provides that merchants are responsible for protecting buyers. It identifies merchants as the individuals or businesses dealing in a specific set of goods and buyers as firms or individuals contracting to purchase goods. In the case study, Scott Restaurant Company is the buyer, and Big Refrigeration Company is the merchant. The contact between the two companies is subject to Article 2 of the UCC because Big Refrigerator Company is a merchant specializing in the sale of refrigerators. The implementation of the Article is dictated by one party, a merchant selling goods. Therefore, it cannot be implemented if the deal entails services.

Big Refrigeration Company’s Breach of Contract

According to Kubasek et al. (2020), breach of contract is the violation of any terms and conditions that two parties have agreed upon in a binding agreement. Scott Restaurant Company and Big Refrigeration Company entered into a sales contract in the case study. The terms that Scott Restaurant Company was to meet were paying Big Refrigeration Company $5,000, which was the cost of the freezer they were purchasing, and $1,000 to cover the cost of installation and delivery. Big Refrigeration Company’s terms included delivering and installing the specific freezer that Scott Restaurant Company had purchased. Scott Restaurant Company met the terms and conditions of the sales contract, but Big Refrigeration Company did not because they delivered another brand contrary to what had been ordered in the sales contract. Therefore, Big Refrigeration Company breached the contract. Get in touch with us at eminencepapers.com to get your assignment completed by a team of experts.

What Scott Restaurant Company Could Do About the Breach of Contract

There are various options that Scott Refrigeration Company can consider to deal with the breach of contract. The first option is to inform Big Refrigeration Company that the delivered freezer is not what had been ordered. Ample Refrigeration can then explain the reason for the wrong delivery and negotiate with Scott Refrigeration Company whether to reschedule the delivery or refund their money if the refrigerator they had purchased is out of stock.

The second option is to claim a refund. Scott Refrigeration Company has the right to claim a refund because Big Refrigeration Company breached their contract, and they may feel that they are not confident about doing business with them again. Big Refrigeration Company must issue the refund within the shortest time possible before Scott Refrigeration Company takes legal action. Scott Refrigeration Company may also sue Big Refrigeration Company for breach of contract and get a refund and compensation for damages. The main types of injuries are consequential and expected damages. Consequential damages arise from the natural consequences of a breach, and expectation damages directly result from a breach of contract (Merkin & Saintier, 2019). They may argue that the wrong delivery created additional delays that may have affected operations because a freezer is an essential appliance in restaurants.

The other option is accepting the delivered brand and renegotiating the price to purchase it at a discounted price. Scott Refrigeration Company may opt to take the freezer produced by Big Refrigeration Company even though it is not the brand they ordered if the freezer is urgently needed and if Big Refrigeration Company states that the freezer they purchased is out of order and it may take a lot of time before it is restocked.

Big Refrigeration Company may request the court to amend the terms of the agreement to avoid paying heavy damages and ruining the company’s image. The court may either grant Big Refrigeration Company their request or order specific performance, which includes an order to meet the terms and conditions of the sales contract.

References

Kubasek, N. K., Browne, M. N., Herron, D. J., Dhooge, L. J., & Barkacs, L. L. (2020). Dynamic business law: The essentials (5th ed.).

Merkin, R., & Saintier, S. (2019). 9. Damages for breach of contract. Poole’s Textbook on Contract Law, 343-412. https://doi.org/10.1093/he/9780198816980.003.0009

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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.

Breach of Contract

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 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.