Reference no: EM133178378

ACCT 2140 Legal Environment of Business - Chattahoochee Technical College

UCC Case Study: Wilson v. US Golf/Tennis Centers

Wilson Sporting Goods Co. v. U.S. Golf and Tennis Centers, Inc.
Court of Appeals of Tennessee, 2012 WL 601804 (2012).

IN THE LANGUAGE OF THE COURT
Charles D. SUSANO, Jr., J. [Judge]

[U.S. Golf & Tennis Centers, Inc. (the Company), and its owners, Arthur and Louise Bell, operate] two retail sporting goods stores specializing in the sale of golf and tennis equipment: one in Tennessee and one in Ohio. The Company agreed to purchase from Wilson [Sporting Goods Company] 4,000 units of second-hand golf balls at a unit price of $5.00-a unit being two dozen golf balls. Thus, the Company purchased 96,000 golf balls for a total price of $20,000. The order was shipped with half of the shipment being received at the Ohio store and the other half being delivered to the Tennessee store. It is undisputed that the shipment conformed in quantity and quality to the specifications of the parties' contract.

When Wilson filed suit in [a Tennessee state court against U.S. Golf] the $20,000 balance on the contract was past due and owing. The record reflects a series of fax communications between Mr. Bell and Wilson in which Mr. Bell repeatedly sought written confirmation that the Company had received the "lowest price" for the golf balls. In its faxes, Wilson confirmed that the Company received the lowest price "that Wilson offered to any one in the market." The communications ended with Wilson seeking "prompt payment," and with Mr. Bell, apparently unsatisfied with Wilson's responses, seeking authorization to return the shipment to Wilson.

In answer to Wilson's suit, the defendants alleged breach of contract in that Wilson had "misrepresented the price of the goods at issue. Before delivery the defendants heard that in fact Wilson had sold the product for $2.00 per dozen. Accordingly, there was never a meeting of the minds as to the amount that would be charged."

[After a trial, the court entered a judgment in favor of Wilson for $33,099.28, including interest, attorneys' fees, and other expenses. The defendants appealed.]

The defendants contend that they were legally entitled to cancel the subject contract and that, therefore, the trial court erred in upholding the contract and awarding Wilson a judgment for $33,099.28.

The defendants point, in particular, to Tennessee Code Section 47-2-601 [Tennessee's version of UCC 2-601] which provides, in relevant part, that "if the goods or the tender of delivery fail in any respect to conform to the contract," the buyer may, among other options, "reject the whole * * * ." From the defendants' point of view, the goods in this case failed to conform to the contract because, according to the defendants, Wilson charged the defendants a higher price for the goods than that agreed upon. The defendants assert that Mr. Bell, acting upon behalf of the Company, was thus entitled to and did in fact reject the shipment. The defendants argue that once they rejected the goods, they were entitled to cancel the contract pursuant to Tennessee Code Section 47-2-711 [Tennessee's version of UCC 2-711]. That section provides as follows:

"Where the buyer rightfully rejects, the buyer may cancel." [Emphasis added.]

Wilson responds that the goods in no way failed to conform to the contract, and that there was no rejection of the goods by the Company. Accordingly, Wilson concludes that the Code sections relied upon by the defendants do not apply to permit the defendants to cancel the contract. In a word, Wilson is correct.

Nothing in the evidence before us shows or even suggests that the defendants ever rejected delivery of the shipment of the golf balls or that [they] ever had the right to do so. The defendants do not dispute that the product received by the Company conformed to the contract with respect to quantity and quality. Their sole contention at trial was that the price charged was not the lowest available price, as contemplated by the contract. The trial court, however, found that the parties had a contract for an agreed total purchase price of $20,000, and that "the lowest price for the specific goods ordered and received was confirmed." In addition to the fact that the contract's terms regarding price are clear, there is nothing in the record to contradict Wilson's confirmations to Mr. Bell that the defendants did receive the lowest price offered to anyone for the goods received. [Emphasis added.]

In summary, the cited UCC provisions regarding rejection and cancellation do not apply in this case where the trial court properly found that the seller, [that is,] Wilson, fully performed, but the buyer, the Company, failed to make any payments. As discussed, the agreed contract terms, including purchase price, were clear. The trial court did not err in upholding the contract and holding the defendants liable for the goods received.

The judgment of the trial court is affirmed.

Requirements:

Question 1. Describe what the UCC is and in your view what it is intended to accomplish.

Question 2. How/why is the above case on golf balls related to the UCC?

Question 3. Do you feel the UCC is/is not important to business owners and/or customers? Why?