Question

Robinson Pizza Company agreed to buy 25 pounds of mozzarella cheese from the Clemens Cheese Factory for $5 per pound. When the cheese was delivered, Robinson discovered that one 10 pound block of cheese was a bit moldy and, he believed, unusable. Clemens sent Robinson a bill for $125 and demanded payment. Robinson called up Clemens and refused to pay that much but indicated that he was willing to pay $75. Clemens said “Not enough. Give me $80 and I won’t sue.” Robinson said, “OK. I agree. I’ll pay you $80 to settle this dispute.” Robinson sent Clemens a check for $80. Clemens signed the check and deposited it in his savings account. A week later Clemens sued Robinson for what he believed was the remaining $45. (Please read both part (a) and part (b) before answering either question).
a. .Judgment for whom? Explain.

b. Would your answer to (a) be different if Clemens had written “without prejudice” on the back of the check before he deposited it? Explain.

Answer 1

Robinson Pizza Company agreed to buy 25 pounds of mozzarella cheese from the Clemens Cheese Factory for $5 per pound. Therefore Robinson has to spend $125 for the whole deal. Also one 10 pound block of cheese was unusable, therefore $50 worth raw material is of no use. Accordingly Robinson got a total raw material of $75 (125-50) which can be used. But the deal again negotiated for $80, although there is a loss of $5 for Robinson in this deal yet he agree.

1. As they have agreed upon a certain decision i.e. for $ 80, there is also a loss of $5 to Robinson, It is the duty of supplier to provide the desired quality of product but if he fails he also has to compensate the receiver. But here Clemens sued Robinson for what he believed was the remaining $45, then Robinson should also demand for the new 10 pound block of cheese which Clemens delivered earlier and was unusable to Robinson.

2. Here Clemens had written “without prejudice” on the back of the check before he deposited it and According to banking rule If you endorse the check "without prejudice" above your signature, then you are saying your acceptance of the check does not indicate your claim has been satisfied. In effect, you are attempting to preserve your rights to additional payment even though you took the check, which means Clemens is not satisfied with claim, but Robinson would also put forward his point of not getting desired quality of supply. Hence fair judgement will lead this to a point where both parties either negotiate for a new sum or settlement take place by supplying new 10 pound block of cheese and getting payment for remaining amount in return.