PROBLEM:
You are an attorney and your old friend John contacts you. John has recently started his own business to sell a new product he has developed. The product is a new design for small, light-weight personal headphones, as would be used with an smartphone, digital tablet, MP3 player or a radio. His questions to you concern several issues of what he should look for in creating contracts for his business.
Question:
John purchases magnets (one component necessary to make headphones) from the Rippov Corporation. The salesperson for Rippov tells John that Rippov’s magnets are made of the highest quality rare earth materials found in the world. John enters into a contract to purchase 10,000 magnets for $5 each. Similar magnets sell elsewhere for $7 each. John obtains the first shipment of the magnets and they are of a lower quality and many contain surface cracks. This causes John’s production line to be shut down and he is unable to fulfill an order for headphones. John would have made $500 profit on this order.
A. Can John get out of the contract based on lack of consent? Explain why or why not, and mention and explain what specific doctrine(s) may apply. (Worth up to 5 points)
B. Also, could John recover the additional $500 that he lost? Explain why or why not and mention and explain any doctrine(s) that may apply. You must fully answer all of the above.