Question

Jon agrees to sell 5,000 units of vitamins to Dany. Dany operates a retail grocery store and
intends to sell the vitamins in her store. Jon doesn’t have any experience in medicine or
chemistry and he just started making the vitamins using a formula he learned from a friend who
is a chemist up North. This is Jon’s first sale; he is trying to get into the business of selling
vitamins so he can quit his full time job as a security officer. The contract calls for the vitamins
to be shipped from Jon’s warehouse directly to Dany’s store by December 1st. Dany agrees to
pay for the vitamins when they arrive at her store. Jon ships out the vitamins on November 15th.
On November 19th, engineers for the railroad Jon uses to ship the vitamins go on strike. Jon
notifies Dany of the strike, but she does not respond to his message. The strike ends and the
vitamins finally arrive on December 2nd. Dany takes a look at the vitamins and decides she will
keep them and she pays Jon. Dany notices that Jon has put what she believes to be an
unnecessary warning on the vitamins that the vitamins should not be taken by people with high
blood pressure. She thinks the warning will discourage people from buying the vitamins, so she
removes it from all of the bottles of vitamins. She then begins to sell the vitamins but several
customers, who have high blood pressure, get seriously ill from taking them. The customers sue
Dany for damages on December 20th. On December 21st, Dany contacts Jon and informs him that
she has changed her mind and no longer wants the vitamins and wants her money back because
the goods did not arrive on time.
Please discuss and analyze all relevant legal issues raised by this hypothetical scenario.

Answer 1

Based on the above situation, we see that there is a contract between Jon and Dany with respect to the supply of the vitamins. Jon manufactures the vitamin based on the formula he learnt from a friend and this is the first sale for Jon. Dany agreed to accept 5000 units from Jon. The contract specifies that the vitamins to be shipped from Jon's warehouse directly and should reach Dany directly by December 1. As part of the sale, Jon has shipped out the vitamins on November 15th. However, because of the strike on November 19th, the delivery of the vitamins has been delayed. Jon notifies Dany of the strike, but she does not respond to his message. The vitamins finally arrive on December 2nd and Dany decides that she will pay Jon . Dany noticed that Jon has put what she believes to be an unnecessary warning on the vitamins that the vitamins should not be taken by people with high blood pressure as she believes that it will discourage people buying the vitamins. As such, she removed the notices herself from the bottles. However, several customers, who have high blood pressure get seriously ill from taking the vitamins who inturn sue dany for damages on december 20th. On the 21st of December however, Dany calls and informs Jon that she no longer wants the vitamin because it did not arrive on time and that she wants her money back.

For a contract to be valid generally, it has satisfy the following requirements :-

Agreement :- As can be seen here, there is a valid agreement between Jon and Dany to supply goods and as such would form a valid contract.

Capacity :- Both the parties are legally capable to perform the contract. Jon has tried the vitamins from his friend and Dany operates a retail grocery store. They are legally capable of entering into and performing a contract subject to satisfaction of the other requirements.

Consideration :- Both Dany and Jon have consideration involved in the contract. The consideration here, is the amount agreed to be paid by Dany to the supplier of goods, Jon.

Intention:- Both the parties in the contract have the right intention to perform the contract. Jon has the intention to manufacture and supply the goods while Dany has the intention to receive the goods to be further sold to the customers through our retail store.

The aspects in this contract meet all the requirements of a valid contract. However in this case, Dany has sued Jon for the non - performance of the contract on time. This action of Dany is clearly not enforceable because of the following conditions :-

a.) Jon had informed about Strike:- Jon had Dany about the strike the same day when he came to know about the strike. By doing this, Jon had ensured that the promisor has performed his duties at the time of the sale and kept the promisee informed about any unexpected or unforeseen circumstances in the performance of the contract.

b.) Delivery of goods amounting to acceptance :- The promisor to the contract, Dany had accepted the delivery of the goods on December 2nd even though it is 1 day later than the day on which contract was to be delivered. If there was any reason for which Dany was not happy with the performance of the contract, Dany could have rejected the goods and could have sent it back to Jon.

c.) Consideration has been paid :- The consideration for the contract has been paid by Dany to Jon. After checking the goods delivered by Jon, Dany paid the settlement in respect of the goods received and completed the performance of the contract from her side.

Also, she had a considerable amount of time from the time she received the goods to the time she changed her mind to report on the delay in the execution of the contract. However, only after she realized that customers started suing her, did she request for a refund which clearly is not valid and does not hold grounds for the rejection of the contract.

d.) False claims :- As can be seen from the above case, Dany removed the alert mentioned by Jon that it should not be consumed by people with high blood pressure. However, Dany went ahead and made the vitamins available by everyone. This clearly shows that a mistake has been committed by Dany. Not only did she remove the alert thereby resulting in a hit at Jon's brand inspite of knowing the caution, she also tried to return the goods to Jon stating a false reason. This clearly shows the amount of negligence in the execution of the contract by Dany.

e.) Negligence no the part of the promisee:- While it was clearly mentioned by Jon that the high blood pressure section of the population are advised against taking the vitamins, Dany has clearly breached the terms of the usage.In doing this, she has held the customers of the product vulnerable for any adverse risks it poses. She can be sued for indulging in such acts.

Based on the above reasons, it can be seen that the negligence is held on the part of Dany and Jon has performed the responsibilities under the contract and as such cannot be held accountable .