Exercise 1

Lana orders a set of 20 Christmas ornaments from FaLaLa Limited, for delivery on December 15. The ornaments are delivered on December 10 and Lana discovers that they do not have the special SparkleGuard that FaLaLa had advertised.  Lana returns the ornaments to FaLaLa, with a note advising of the problem.  FaLaLa sends Lana another 20 ornaments, this time with SparkleGuard, which arrive at her house on December 20.  Lana refuses the delivery of the ornaments.  FaLaLa sues her for breach of contract, saying that it had properly exercised its right to cure the initial defect and, therefore, Lana must pay it for the ornaments.

How should the judge rule?

A. For Lana, because FaLaLa did not give Lana notice that it intended to fix the defect and it did not fix the defect by December 15, the initial delivery date.

ANSWER "A" IS CORRECT. If the seller wishes to exercise the right to cure a defect, then the seller must notify the buyer of its intention to fix the problem and must correct the situation within the time period stated in the original contract. In this case, FaLaLa did not give notice to Lana of its intent to send new ornaments and the replacement ornaments did not arrive by December 15, the originally agreed-upon delivery date.

B. For FaLaLa, because it properly exercised its right to cure the defect with the initially delivered ornaments.

ANSWER "B" IS NOT CORRECT. Please try again.