Pulling Teeth The purpose of damages is to compensate for economic loss due to a
ID: 366663 • Letter: P
Question
Pulling Teeth
The purpose of damages is to compensate for economic loss due to a breach of contract. But the remedies available to buyers and sellers differ. In this activity, we look at a fictional scenario involving a dentist office's dispute with a medical device equipment manufacturer.
CONCEPT REVIEW:
When one of the parties to a contract fails to perform its obligations, under the UCC the injured party has a variety of remedies available depending on the type of breach, the statute of limitations, and whether the injured party is the buyer or seller.
Comprehension Case
Read the text below and answer the questions.
Suppose that Smile Dentist, Inc. is buying 150 new dental chairs from Sit Back, Corp. Because the parties are long-term business partners, a contract that both parties signed included a provision that any breach of the agreement will result in damages of $1 being paid to the non-breaching party. Five years after the agreement is signed and the chairs delivered, a dispute arises when 30 percent of the chairs begin to malfunction during prolonged use. Smile Dentist sues Sit Back for its lost profits as a result of having nearly one third of its chairs out of commission. [Assume that the parties agreed to extend the statute of limitations to six years.]
Under which of the following situations would specific performance not be applicable?
A professor buying a rare book.
A distillery buying barley.
A collector purchasing a one-of-a-kind painting.
An original copy of the Declaration of Independence.
A custom car.
Explanation / Answer
The Specific Performnace Act is a remedy for breach of contract wherein the court asks the breaching party to perform a certain act. Mostly, what was previously agreed upon in the contract. Now, this type of contract is formed between parties dealing with high-level/confidential information or an asset or property. Let's analyse the following situations given here:
1. A professor buying a rare book: Even though the nature of the book is rare, the professor will use his diligence and common sense to check the authenticity of the book. After which, he will proceed to make the purchase. Since this is a one time purchase and even though in the later date if there is a dispute regarding the authenticity of the book, the matter settles between two parties on their own discretion. Hence The Specific Performance Act is not applicable here.
2. A distillery buying barley: A distillery buying barley is for the purpose of making beer, which indicates that the nature of transaction is regular and is bound under a contract between the two parties. Any breach of contract between these two parties will call for remedies and hence The Specific Performance Act is applicable here.
3. A collector purchasing a one of kind painting: Since this is a collector we are talking about, and given the unique nature of the painting he must buy his paintings from authentic sellers. Now such transactions of paintings involves a contract between the sellers and buyers. usually the galleries and museum from where these paintings sold. Now any breach of contract for example, fake identity of the painting may result in breach of contract. Hence The Specific Performance Act is applicable here.
4. An original copy of Declaration of Independence: Since its an historically important document also vintage, given the origin, any misuse or illegal selling of this document may lead the court to perform a specific act for example submission of the said document. The Special Performance Act is applicable here.
5. A custom car: In this case if the manufacturer failed to come through with the customisations as promised, this would be known as Material Breach, which may lead to the court calling for The Special Performance Act.
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