1.Adam steals from Business Resources, Inc., ten computer hard drives, which Ada
ID: 454208 • Letter: 1
Question
1.Adam steals from Business Resources, Inc., ten computer hard drives, which Adam sells to Computer Products Corporation (CPC). Unaware that the drives are stolen, CPC reconditions them and sells them to Direct Marketers, Inc. With the reconditioned drives, CPC gives Direct Marketers a written statement that disclaims “any and all warranties.” Business Resources learns that Direct Marketers has the drives and demands their return. Direct Marketers gives the equipment to Business Resources and files a suit against CPC. Will Direct Marketers succeed in its suit? Why or why not?
Explanation / Answer
Primarily it is Computer Production Corporation’s (CPC) responsibility to check that the source of goods they had purchased are authentic or not before recondition and selling it to Direct Marketers. Every contract for a sale of goods demand that the title is good and its transfer is proper as per low. This warranty of title begins after that. Here CPC given a written statement about the product that disclaims that any and all warranties but they do not have the title of goods therefore in this case the warranty is not valid although it’s in writing. Scenario is totally different here as the warranty can be excluded by circumstances as the buyer know that the transferor does not have title of the goods.
In this case, Direct Marketers will succeed in its suit against CPC as the transfer of the computers from CPC to Direct Marketers was a sale of goods. The warranty of title is applicable in this case. But under these circumstances the Direct Marketers was not aware that CPC did not have good title to the product. In this situation, CPC warranted the title and breached that warranty in the sale to Direct Marketers and they can lose the suit.
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