Ellen told her employee Mike to purchase a second-hand FAX machine for use in Ellen's business. Mike looked over a machine that Howard offered for sale. On a test run, Mike discovered that the machine did not operate properly at all times. But Mike believed that the machine could be easily repaired and -- at Howard's price -- was an excellent buy. Mike purchased it for Ellen's business.
Shortly after delivery, Ellen learned for the first time that the FAX machine did not operate properly at all times. She immediately demanded that Howard take the machine back and return to her the full purchase price.
Will Ellen be able to get out of Mike's deal to purchase the machine?© BrainMass Inc. brainmass.com October 7, 2022, 9:11 am ad1c9bdddf
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1. Will Ellen be able to get out of Mike's deal to purchase the machine?
Issue: Was the fax machine $500.00 or more for the contract to be binding and enforceable? Does an inspection by an employee bind the employer to the contract? Does acceptance of the contract after inspection have any exceptions?
Mike made an "acceptance of goods" (for Ellen but still binding) that occurred when he (the buyer), after a reasonable opportunity to inspect the goods, signified to the seller that he would take the goods in spite of their nonconformity (U2-606). However, the buyer (i.e., Mike for Ellen) may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured (U2-608). Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods that is not caused by their own defects. It is not effective until the buyer notifies the seller of it (U2-608). Mike, since he thought the nonconformity would be easily cured, could return the fax machine within a reasonable time and ask for the full amount of the fax machine to be returned (for Ellen).
However, the seller may decide that since an inspection occurred, he or she will not refund the money for the fax machine. Then Ellen would probably have to sue the seller for her money.© BrainMass Inc. brainmass.com October 7, 2022, 9:11 am ad1c9bdddf>