Asked by connor Xiong on May 07, 2024

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In the six months since Zippy Worldwide Courier bought a truck from the Solidbuilt Motor Co., the truck has broken down constantly and has only been in use for a total of two weeks, never for more than half a day at a time. Zippy wants to return it and get a new truck, but Solidbuilt insists it is repairable. The contract has a replacement warranty clause for defective parts, and another clause says that only the warranties, conditions and other obligations set out in the contract are valid, and that all others, no matter how they might arise, have no force or effect.
Discuss whether or not Zippy could get a court to permit them to rescind the contract.

Replacement Warranty Clause

A provision in a contract or agreement guaranteeing the replacement of defective goods or services within a specified period.

Rescind

To revoke, cancel, or repeal a contract, agreement, or resolution, effectively rendering it null and void.

Defective Parts

Components of a product that are faulty, malfunctioning, or fail to meet quality standards.

  • Grasp the essential tenets that control the solutions for contract infractions, featuring indemnities and judicial mandates.
  • Acquire knowledge on the significance and limitations of exemption clauses in the context of contract law.
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KM
Karan MohanMay 12, 2024
Final Answer :
Normally, but especially where (as here), the bargaining power of the parties is approximately equal, the court will enforce an exemption clause such as the one in this contract, which would mean that Zippy could not rescind the contract but would simply have to live with the terms it had negotiated. However, given the almost total inability of Solidbuilt to get the truck to run, Zippy could argue that the failure was so severe as to amount to a total failure of consideration on the part of Solidbuilt and a fundamental breach of the contract, and that entitles Zippy to rescission. The court will not grant this easily but may agree to do so in such an extreme case as this. However, it will not grant consequential damages, such as lost profits on delivery contracts that Zippy could not fulfill due to the truck's breakdowns.
Solidbuilt might also argue that Zippy's failure to repudiate the contract and demand rescission much earlier amounted to changing a condition into a warranty ex post facto, which would entitle it only to direct damages, without any rescission.