BUSINESS LAW – Signal Sets Company contracts to deliver one hundred

QUESTION

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definitiontelevision sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made ondelivery. Signal tenders delivery in its own truck. Tuner’s manager notices that some of thecartons have scrape marks. Tuner’s owner phones Signal’s office and asks whether the setsmight have been damaged as they were being loaded. Signal assures Tuner that the sets are inperfect condition. Tuner tenders Signal a check, which Signal refuses, claiming that the firstdelivery to new customers is always for cash. Tuner promises to pay the cash within two days.Signal leaves the sets with Tuner, which stores them in its warehouse pending its “GrandOpening Sale” on May 15. Two days later, Tuner’s stocker opens some of the cartons anddiscovers that a number of the sets are damaged beyond ordinary repair. Signal claims Tuner hasaccepted the sets and is in breach by not paying on delivery. Will Signal succeed on theseclaims? Explain.

ANSWER:

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