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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.
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.
Instructions Scott Restaurant Company purchased a commercial freezer from Big Refrigeration Company. The written contract between Scott Restaurant Company and Big Refrigeration Company provided that S
Case Study: Scott Restaurant Company Columbia Southern University April 3, 2023 Case Study: Scott Restaurant Company Is this contract subject to article 2 of the uniform commercial code (UCC?) The uniform commercial code (UCC) Article 2 governs transactions involving the sale of goods. Goods include all items that can be identified and moved at the time of sale but it excludes transactions involving service contracts (Walt, 2018). In this case, Scott Restaurant Company paid $5,000 for a commercial freezer from Big Refrigeration Company. Therefore, the contract is subject to Article 2 of the UCC since this transaction involves the sale of goods in the form of a freezer. Does it make a difference if Scott Restaurant or Big Refrigeration are merchants? UCC assumes merchants should be held to a higher standard because they are more experienced and have or should have special knowledge (Walt, 2018). The rule that applies to professionals does not apply to casual or inexperienced buyers or sellers (Henning et al., 1992). The UCC defines a merchant as “one who deals in goods of kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practice or goods involved in the transaction” (Walt, 2018). A merchant is held to a higher standard of commercial reasonableness under article 2 of the UCC, so if Scott Restaurant Company or Big Refrigeration Company were merchants, their transaction agreement would make a significant difference in the application of the UCC. In this scenario, whether Big Refrigeration or Scott Restaurant Company is a merchant is still being determined. However, if one of these firms is a merchant, that firm will be subject to additional standards and other terms that apply to non-merchant transactions. Did Big Refrigeration Company Breach the Contract? The original written agreement between Scott Restaurant Company and Big Refrigeration Company stipulated that Scott Restaurant Company would pay Big Refrigeration Company $5,000 for an Arctic Air Commercial Freezer, plus an additional $1,000 for delivery and installation. Instead, Big Refrigeration shipped the Admiral Craft Commercial Freezer. The UCC stipulates that the seller must deliver goods that conform to the contract description, and if the goods do not conform, the buyer has the right to reject the goods in whole or in part (Walt, 2018). Big Refrigeration Company delivered a commercial refrigerator not specified in the contract by delivering an Admiral Craft commercial freezer instead of an Arctic Air commercial freezer. Big Refrigeration Company, therefore, breached the contract by delivering goods that did not match the contract’s description. In case there is a breach of contract, what can Scott Restaurant Company do? If a breach of contract is discovered, Scott Restaurant Company has several options, including rejecting the non-conforming goods, Admiral Craft Commercial freezers, and requiring Big Refrigeration to deliver an Arctic Air Commercial Freezer. If Big Refrigeration fails to meet these obligations, Scott Restaurant may seek damages for breach of contract. Scott Restaurant Company could accept Admiral Craft commercial freezers and sue for breach of contract damages. The difference between the values of the non-conforming goods and the values of the conforming goods may be included in the damages. Finally, if the breach is material, Scott Restaurant may cancel the contract and receive a refund of the purchase price and any other costs incurred during the transaction. This decision was made after Big Refrigeration revealed that they could not obtain the model Scott Restaurant Company required to meet their expectations. The Scott restaurant can resolve the issues by rejecting the goods supplied and requesting a refund of the money spent on the freezer. References Henning, W. H., Lawrence, W. H., & Wallach, G. I. (1992). The Law of Sales Under the Uniform Commercial Code. Walt, S. D. (2018). Importing Uniform Sales Law Into Article 2. Virginia Public Law and Legal Theory Research Paper, (2018-12).