Ch. 15 - Sales and Warranties; Q 1, 2, 3, and 8.docx

2 black bought an automatic machine from white to

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2) Black bought an automatic machine from White to replace a machine that had previously required two employees to operate. In selling the machine to Black, White pointed out the saving in the cost of the employees' time. White also stated that "Productive capacity will be doubled" with the new machine. Hourly production increased even more than double 1,100 pieces per hour against 500 pieces per hour previously. However, there was a problem involved. The machine seldom ran an hour without breaking down. Whenever it broke down, either one or two machine service personnel would be called upon to fix it. After a month , one person was ordered to stand by for breakdown whenever the machine was scheduled to run. Weekly production on the automatic machine is only slightly greater than previous weekly production on the hand-operated machine. Black has charged White with fraud. Can Black recover on this basis? Why or why not? Is Black stuck with the new machine? What defense does White have? It is very likely that Black can win on the basis of fraud. If there is a false representation made to induce a sale, Black waited too long to pursue either a remedy for fraud or a remedy for breach of warranty. The prediction as to future performance may not likely to be treated as fact and, therefore, will probably not sustain the charge
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of fraud. How long White has worked on the machine to cure the defects has no bearing on the outcome in this situation.
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  • Fall '18
  • Julio Smith

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