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Evaluate and discuss the rights and obligations of Clean, under the circumstances, following delivery and Pros’ inspection of the goods.

Background:   The Clean-N-Shine (“Clean”) owners are aware of the importance of contracts to both buy and sell goods and services.  They are reviewing the Uniform Commercial Code (UCC), Article 2, that covers contracts for the sales of goods.

The Clean owners understand that the terms in their purchase contracts (i.e., contracts to purchase products from EPI) will require very different terms from their sales contracts reselling these cleaning products purchased from EPI. EPI manufactures environmentally-friendly products.

First, the owners want to focus on understanding their rights and obligations associated with reselling EPI cleaning products.

Second, Winnie and Ralph ask you to prepare information to help the Clean understand risks and possible liabilities related to the resale of EPI cleaning goods to customers.

Background Facts You Need To Know:  Office Cleaning Pros (Pros), a local company, emailed Clean that it wanted to purchase some cleaning products.

The email stated the following sales details:

  • Pros wanted to purchase six cases of Carpet Re-New cleaning solution from Clean
  • Price is $200 per case of Carpet Re-New
  • Delivery was to be on or before April 1, 2019
  • Delivery was to be made to Pros storage warehouse facility

Clean did not respond to the email, but on April 1, Clean delivered six cases of cleaning solution products to Pros office headquarters, located next door to Pros’ storage warehouse facility.  Pros moved the cleaning solution products from its headquarters to its storage warehouse facility.

Three days later, Pros inspected the six cases Clean had delivered and discovered all six cases contained Floor Re-New cleaning solution, not Carpet Re-New as specified in the sales contract.

Instructions

Answer the following questions for Winnie and Ralph to use for discussion with the Clean owners.

Referring to the scenario above, review UCC, Article 2, and respond to the following:

  1. Analyze and explain whether a contract was created between Clean and Pros under the UCC.
  2. Evaluate and discuss the rights and obligations of Pros following the inspection.
  3. Evaluate and discuss the rights and obligations of Clean, under the circumstances, following delivery and Pros’ inspection of the goods.

Solution:

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