Question

Quality Computer Company agreed to sell one hundred hard drives to Retail Electronics, Inc. which are required to have certain specified amounts of memory and agreed to ship them F.O.B. Retail Electronics distribution Center in Memphis, Tn." When the drives arrived, Retail Electronics rejected them and informed Quality that the drives did not conform to Retail's memory requirement. A few hours later, the drives were destroyed in a fire at Retail Electronics' distribution center. Quality is suing Retail for the cost of the computers.

write the   1.Statement of the Facts (Brief recitation of the facts)2.Issue (Legal question) 3.Application (Apply the law to the facts) 4.Decision (Conclusion)

Answer 1

Caption: Quality Computer. v. Retail Electronics

Statement of Facts: The plaintiff was hired by the defendant to sell 100 hard drives having certain memory prescribed by the defendant. The plaintiff did not conform to the requirements of defendant and hence, led to rejection of the goods. However, the goods got destroyed in a fire at the defendant’s distribution center. The plaintiff sues the defendant and asks for damage costs

Legal Issues and Rules:

• Plaintiff perspective: The plaintiff’s key argument was that the products were at the defendant’s distribution center and were their responsibility. The damage cost must be incurred on the defendant as they had duty of care for the goods of the plaintiff.
• Defendant perspective: The defendant claimed that they had rejected the order and it was the duty of plaintiff to collect the order back. The damage costs cannot be levied on them

Application: As per UCC 2-510(3), 2A-220(2)], if the seller produces goods which do not conform the buyer’s standards, any risk of loss of such products will stay with the seller and not the buyer. The risk of loss shifts to the buyer once the seller makes the required changes and the changes get conformed and accepted by the buyer.

Decision: The plaintiff’s appeal was dismissed. The damage costs lie with the seller i.e. Quality Computers and no recovery cost can be amounted to Retail Electronics.