Ethical and Legal Issues in Business
Does the UCC implied warranty of merchantability apply to water as a good? In the case of Stephen Gall and his family, the water supplier by the name McKeesport Municipal Water Authority supplied their home with contaminated water that made Gall and his family fall ill. Gall filled a complaint that the water company wants dismissed arguing that water is not a good and therefore does not apply to the UCC. The fact of the matter is that whatever the merchant is providing for sale becomes a good (Sec 2-316). Sec 2b provides that goods should be of average quality and (2c) they should be fit for use for their intended purpose. Under the UCC goods are described as all things that are transferable from the point of identification to that of contract for sale. Thus water is categorized as a good and therefore McKeesport Municipal Water Authority should be liable. This means that Gall’s case should stand and not be dismissed. This case is valid under the quasi-contract basis.
Schumacher and his family moved to Inland to start a bar and restaurant business following a promise by his parents to let him manage the business for life and also inherit the entire parcel of land upon the death of either parent. His parents after four years decided to sell the inn and the adjacent property. This led to Schumacher filing for a restraining order to prevent this move and on trial he lost the case where the judge cited that an oral contract is invalid. The question is, does Schumacher have a valid claim for enrichment gotten unjustly against his parents? This is a classic example of a promissory estoppel. Under promissory estoppels, the promisor is obliged to fulfill what he/she had promised the promisee. The legal claims in such a case are enrichment gotten unjustly as Schumacher had filed and the reason behind this is that Schumacher had started the business with his own resources and made it profitable. Schumacher had also built a house for his family on the said piece of land, installed a well and also bought equipment for the business. Therefore he has a valid claim for enrichment gotten unjustly against his parents.
In the case of Pernal v. St. Nicholas Greek Orthodox Church is that Pernal made an offer to the church as well as White Chapel Memorial Association Park Perpetual Care Trust but on different dates both offers were open for a two-week period. The church was first to accept the offer but made amendments to the terms all the while it had no knowledge of the second offer made to the Chapel. Later on the chapel made an even better offer money-wise and amended some terms. Pernal had not signed the amendments put forth by the church. The church sued Pernal for breach of contract. Will it win? No. There was no breach of contract because the church had altered the first agreement by coming up with their conditions which Pernal didn’t agree to by signing. The church made a counter offer that Pernal had not accepted and he later on made another offer indicating that he had accepted the amendments made by the chapel which reviewed the prices upward as well as the post closing occupancy conditions. He sent a letter to both parties indicating the new changes and still left the offer open for the initial two weeks. The rule of law in this case is that a counteroffer invalidates the first offer.
Scroge had a contract with Tinker Construction Company for building a factory addition. Because the finishing of the construction was crucial to Scroge’s business, Tinker was promised a bonus upon completion of the construction on time, which it did. On the other hand the supplier of parts for machinery which had a contract to deliver the required parts on schedule said it would not be possible to do so for the agreed price. Scroge went ahead to promise to pay a higher price upon delivery to which the supplier complied. Were these promises enforceable? The promise made to Tinker is enforceable because it was made in good faith to motivate the company to finish construction on time and it was not made under pressure or duress because Scroge stood to benefit upon failure of Tinker to complete construction on time through daily penalties for late performance. In the case of the supplier of parts for machines, the promise was made under duress because the supplier had hinted that he would fail to supply the parts if the initial agreed prices were not revised upwards. This promise is not enforceable because there was a breach of the initial contract by the supplier.
