Discussion about Oral Warranties
I agree that oral statements do not normally constitute enforceable warranties. For this reason, the salespersons should avoid making express warranties to customers orally. This is because the oral statements have no evidence to refer to. It will be hard for the customers to prove that certain warranties were given to them during the sale (Beatty, Samuelson, & Abril, 2018). It would appear, therefore, that oral statements do not usually constitute warranties that can be legally binding. It is the right of a customer to demand a written warrant from the salesperson. This will ensure that the customer can present the written warrant as evidence for the product sold in case it has some faults. Warranties are meant to act as an assurance to the customers that a certain product will perform in certain standards over a given duration. Should the product not perform as expected, the customer may present the warrant to the organization that sold the product so that the product can get fixed or even replaced. The customer is supposed to have certain assurance so that he or she can be loyal to the organization.
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Written warranties will also go a long way in enhancing the reputation of a business organization. In other words, when the salespersons give written statements, the customers will see the organization as being reliable to its commitments. This will ensure that the customers remain loyal to the organization. The reputation of the organization will improve. This is because the satisfied customers will likely make a repeat buying. On the other hand, the dissatisfied customers will experience dissonance syndrome and will in effect switch to other firms to experience other products or services. For this reason, salespersons are supposed to act in the manner that will enhance the long-term relationship with their customers (Jones, 2017). This will ensure that the organization will be able to maintain a good reputation in earning the trust and loyalty of their customers. The salespersons will also act in the interests of the business. The shareholders of a business organization have interests to have better returns on their investments. For this reason, acting in the good faith with the customers will help the business be able to earn more profits hence have more returns on the investments. This is also important in achieving competitive advantage in the market. The organization will be able to achieve competitive advantage if it is in a position to serve its customers well. This is very important in surviving in the competitive industry.
In conclusion, the salespersons will enable the business organization enhances its reputation by acting with integrity when dealing with customers. The customers will remain loyal to the products and services of this organization. For this reason, the businesses are encouraged to maintain a long-term strategic relationship with their customers by acting in utmost good faith. This will guarantee good returns for the organization going forward. This is because the customers will remain loyal and make repeat purchases. The organization will maintain a competitive advantage as a result.
Case 20.3: The Social Dimension
The seller knew that the buyer had limited resources at the time of making the sale and he ended. The seller, having knowledge of the buyer’s limited resources, ended up charging the buyer exorbitantly for the freezer. This is overexploiting the buyer in order for the purchaser to make a supernormal profit. This is clear evidence which supports unconscionability in the contract. In other words, the seller was unfair in the way he sold the freezer to the buyer. This was of exploiting the buyer prevents him to be able to pay conveniently the remaining amount. In other words, the buyer had to squeeze his limited resources to raise part of the money for the freezer. This case prevents different bargaining power for the two parties. The limited resources for the buyer mean that he has less bargaining power as compared to the seller.
This explains why the buyer was overexploited by the seller. This made it hard for the two parties to have clear negotiation roadmap due to the inequality in negotiation powers. This strategic route map for negotiation allows the concerned party to device various ways of negotiating effectively in order to achieve desired strategy (Callison, 2005). Lack o clear strategy may become tricky as such that a buyer may give in easily to the demands of the seller or the supplier. For this reason, a good negotiator is required to have good skills for the task. On another hand, the party or the represented organization ought to have clearly stipulated targets. In order for one to become a good negotiator, there are several key steps one should understand, these factors are discussed as follows in these paper. To start with, one should plan for the negotiation with open questions model. This model requires more information from the opponent. This model gives the host an added advantage, as such, the opponent finds it hard to evade question asked and this situation is controlled by the host. For this reason, both parties should, therefore, prepare adequately in advance, as this facilitates them with the information required, and also the assumption to make concerning other party and its activities.
The seller’s knowledge about the buyer’s limited resources, therefore, means that the seller acted intentionally to exploit the latter. This resulted in an unfair contract. At the time of making the contract, the buyer had no knowledge about the retail price of the freezer. Later on, the buyer learned that he was too way exploited by the seller. This gives the court law evidence to declare the initial contract as being unfair. For this reason, the seller should only receive the remaining amount being calculated at the market retail price. This will deter other sellers from overexploiting their customers. This explains why there is always government intervention in the market in order to protect the buyers or consumers from being exploited by the sellers (Callison, 2005). The market price which is determined by the forces of demand and supply was supposed to be charged and this was the retail price. However, the seller took the advantage of the ignorance of the buyer. This supports the contract finding the contract as being unfair or unconscionable.
What if the facts were different?
The result would have been different if Fitl and Strek had included a clause in their deal requiring the notice for any defect to be made within 7 days to 1 month. In this case, since Fitl made the notice after several years since the purchase (made claim on 1997 and he had purchased the item in 1952), then the claim would not hold since it does not follow under the agreed timeframe (7 days to 1 month). This means that the court of law would find that Fitl had failed to stick to the terms and conditions of the contract as agreed with Strek during the contract formation.
In this case, the court of law will consider the all the clauses of the contract made between the two parties. The court would assume that the two parties were comfortable with the terms they agreed in the contract and hence these terms were based on willingness and pure intention between the parties. For this reason, the court would find the claim made by Fitl concerning the faultiness of the product as not enforceable since it is not made within the timeframe agreed in the contract. The court would, therefore, not find Strek liable for the damages since he was not informed of the faultiness during the agreed time. The court of law would remind Fitl that all the terms that have been agreed in the contract should hold because the court assumes that the two parties made the agreement on mutual consent and intentionally. For this reason, the claim made by Filt about the faultiness of the product would not hold and this case will be thrown away for lack of substantial grounds. Further, this case reminds that the parties engaging in sales contracts should be careful with the terms and conditions of the contract. This is important in ensuring that there will be no problem while executing the contract. Fitl would have been very careful to ensure that he is comfortable with the clauses of the contract.
Legal environment dimension
The court would award the damages that a buyer has suffered as a result of buying a fault or fake product and also the costs he has incurred in filing the case. In this case, the damages would be the compensation amounting to the value of the fault item of even more depending on the value that the buyer would have enjoyed if the item was not faulted. This would mean that the court would ensure that the buyer gets the money he had paid for the faulty item and the costs he has incurred filing the case. This would act as a reason for the business people to ensure that they act in good faith when making deals with their buyers. This is important in order to ensure that business transactions are done in honest and fair manner. The buyers should be able to get value for their money. The amount awarded in this case would ensure that the buyer is compensated for the loss he has suffered for having bought the faulty item. This means that the buyer gets restored to the financial position he was enjoying before buying the faulty item (Callison, 2005). The seller would now be able to act carefully and with integrity while carrying out future business transactions.
Case 23.2: E-Commerce Dimension
If Webster had made the chowder herself from a recipe she had found on the Internet, it would be possible to successfully find the author of the recipe as liable of a breach of the implied warranty of merchantability. This is because the author of the recipe is supposed to explain explicitly the ingredients to be used in the preparation of the chowder. In the recipe, the author is supposed to ensure that the ingredients used to warrant a final product which is friendly to human consumption. In this case, the presence of fish bone in the milky chowder risks the life of the consumer. The author of the recipe for the preparation of this milky chowder should ensure that this product makes it easier for drinking. It beats logic that bones should not be present in a drink because they are not “drinkable”. For this reason, the author of the recipe for chowder should be liable for a breach of implied warranty of merchantability. In this case, the court of law would award Webster damages for the health risks he suffered for consuming a chowder with fish bones. This would act as a lesson to the people who are not careful with their work. In this case, the author of the recipe would have been liable for being negligent. This means that the author of the recipe did not act in due diligence while drafting the procedures of the recipe. This explains why the consumer of the product got her life endangered. This is a very serious issue for the consumers.
The court of law would, in this case, consider if the author of the recipe was qualified to carry out his duties. In this case, the court would consider whether the author of the recipe followed the evidence-based practice. In terms of expertise, the evidence-based practice ensures that the professionals are up-to-date with the necessary skills and competence in proving the services that enhance the customer outcomes. The skills and the competences of the business people can be improved through training and development. This means that the employees will have the skills necessary to perform their duties with diligence and utmost care handling the patients meaning that the patients will receive high-quality services (John, Robert, & Edward, 2001). This will improve the customer satisfaction. For this reason, the business organizations should invest more in training of their work-force especially on the customer service element. The business people have to be experienced and competent to offer quality professional services to their clients. It would have appeared; therefore, that the author of the recipe for the preparation of the chowder may not have been qualified since he failed to offered quality professional services to the customers. This shows that the author had no necessary skills and experiences. The author did not base the procedures of the recipe with the evidence-based practice. This explains why the recipe failed to produce a quality product. This endangered the life of the consumer and hence the author is liable for the negligence of duties.
Beatty, J. F., Samuelson, S. S., & Abril, P. S. (2018). Business law and the legal environment. Cengage Learning.
Callison, J. W. (2005). The Law Does Not Perfectly Comprehend…: the Inadequacy of the Gross Negligence Duty of Care Standard in Unincorporated Business Organizations. Ky. LJ, 94, 451.
John P. H., Robert L. N. and Edward O. L. (2001). ‘The Scale of Justice: Observations on the Transformation of Urban Law Practice,’ Annual Review of Sociology Vol. 27: 337-362.
Jones, L. (2017). Introduction to business law. Oxford: Oxford University Press.