Reference no: EM131738964

Question: You manufacture trunk locks and your major account is a large car company. When an important piece of your equipment unexpectedly breaks, you contact Mayfair, Inc., the only manufacturer of such equipment, and contract to replace it. The Mayfair sales representative assures you orally and in writing that the prepaid equipment will arrive by October 1, in time for you to complete your production for the car company. Instead, there is a union strike in the Mayfair trucking division, and the equipment does not arrive until December 1. By December 1 the car company has made an agreement with another lock manufacturer.

You threaten to sue Mayfair for their failure to deliver on time, but Mayfair reminds you of a contract term that relieves them of contractual liability because of "labor difficulties." Then you learn from a former secretary to the Mayfair sales representative that Mayfair knew that its trucking division was likely to strike. In fact the sales representative and the sales vice president had discussed whether or not to tell you of this fact and decided not to out of concern that you would not place your order. Has Mayfair done anything legally wrong? Is your legal remedy against Mayfair limited to breach of contract? Will you be able to get damages from Mayfair other than a refund of your prepayment? Explain.