LAW FOR BUSINESS

Law for Business

Law for Business

Background of the Case

The case study law for business has four parties involved Dealerz, Boris, and Insurance World and its employees. Dealerz acquired 100 water coolers and 1000 (50) liter replacement bottles of water which is sold to Insurance world. Insurance world has bought these water coolers and bottles for its new office on a “bargain price” of £ 6,000. As per the contract Dealerz delivered and installed the bottles at the Insurance World's premises. The first 500 delivered bottles had no defects whereas, the bottles form the latter batch of 100 bottles found to be contaminated, which led to the severe sickness, diarrhea and, in a few cases, even kidney failure of the staff at Insurance World who consumed the water from the bottles supplied by the Dealerz. The first case of the sickness reported 5 weeks after the bottles supplied and installed. One hundred employees who consumed the water from the bottles were on sick leaves and, ten employees who suffered the most critical and serious symptoms, were on extended sick leave for up to six months. Later, it revealed that the water bottles supplied by the Dealerz were not of standardized universal size, and it will be difficult and impossible to buy the replacement water bottles.

The Written Contract Clauses

The written contract for the deal drawn up by Dealerz legal assistant, Portia had followed clauses which are as under.

The water coolers are designed to take standard sized replacement bottles that are widely available.

“Insurance World” must inform Dealerz of any defects in the product within one week of taking delivery of the water coolers.

Any liability arises due to defects in the products will be limited to the contract price £6000.

Question: 1) Advice Insurance World whether it can recover damages from Dealerz and, if so, specifies the extent of its recoverable losses.

The losses incurred to Insurance world are not just restricted to the defected products supplied and, the scope of the losses incurred is much broader and the primary liability of losses incurred imposed on Dealerz. The contract between Dealerz and Insurance world comes under the convention of International Sale of Goods (CISG), sales of goods (SOGA) and Consumer Protection Act (Geraint, 2005). Insurance World can use “Consumer Protection Act” against the Dealerz for supplying substandard and unhealthy water replacement bottles. In this way, Insurance World can cover its losses incurred due to the sickness of its employees. The Consumer Protection Act, 1986 allows a consumer to get a defective product replaced by the new product or price refunded or get compensation for any loss due to the unfair trade practices or non - performance as per the stated standards and guarantees.

The convention for Sale of Goods dealt with consumer rights and places when a consumer can or cannot ask for a refund. In the underlying case, Dealerz entered into the contract for supplying water coolers and water replacement bottles to the Insurance World. The Convention on International Sale of Goods and Sales of Goods ...