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Exercise 2

General Principles in Consumer Law

Dwayne purchases a stereo system from Krazy Pete’s Electronics store. Krazy Pete’s delivers the stereo to Dwayne’s house, and Dwayne accepts the stereo. After a couple of days, the stereo stops playing CDs. Upon closer inspection, Dwayne discovers the stereo was defective when it arrived because some of the wiring, in an area he could not easily see, was frayed. A few days later, Dwayne takes the stereo back to Krazy Pete’s, with his receipt, and advises that he wants his money back due to the frayed wiring. Krazy Pete’s refuses to give Dwayne a refund, explaining that Dwayne already accepted the goods. Dwayne leaves the stereo at the store, still insisting that he wants his money back. When Krazy Pete’s continues to refuse to give Dwayne his money back, Dwayne files suit against Krazy Pete’s for refund of his money.

How should the judge rule?

A. For Krazy Pete’s, because Dwayne accepted the goods.
ANSWER "A" IS NOT CORRECT. Please try again.
B. For Dwayne, because he properly revoked his acceptance of the stereo.
ANSWER "B" IS CORRECT. Dwayne properly revoked his initial acceptance of the goods. The wiring defect was difficult to discover at the time of acceptance and the defect substantially impaired the value of the purchase. Dwayne notified Krazy Pete’s within a reasonable time after he discovered the defect. Therefore, Dwayne has a valid claim against Krazy Pete’s for breach of contract.