Big Auto Co. plans to give away 50,000 DVDs as a promotion for its new car, to b
ID: 384262 • Letter: B
Question
Big Auto Co. plans to give away 50,000 DVDs as a promotion for its new car, to be introduced October 1. VidKids Inc. has promised to copy, package and deliver the discs no later than September 20. On September 1, Big learns that VidKids has not yet begun to package the DVDs.
A. What rights under the UCC does Big have at this time?
B. Suppose VidKids’ president calls Big and admits, “We’re having a lot of staff problems. The earliest we’re going to get you the DVDs is mid- or late October.” What rights under the UCC do Big and VidKids have?
Explanation / Answer
A. If there is doubt on the performance of VidKid, then Big can demand assurances such as Advance Payment or some other Affirmative Action. Big and VidKid may also agree in sales contract to Liquiduated Damages (to fix the damages if the party fails to perform). Big may also have an arrangment to purchase goods from other vendor and recover losses from VidKid.
B. Big can seek damages from VidKid; purchase goods from elsewhere and recover losses from VidKid OR Big can take VidKid to court to obtain an order for Specific performance. If Vidkid is able to prove that the reason are beyond his control, then VidKid can be safe from the damages. But, if Vidkid fails to prove his reason, then he will be liable to tried under the law of UCC
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