Nicole Knights had recently opened up her own office supplies business “Knights Supplies” which deals mainly with students at a local college. In addition to selling pens and paper, Nicole also provides copying services for students, particularly science and humanities students. She specializes in the copying and binding of student papers.
One day her photocopier broke down and she went to Michaels Copy Repair and Sales (A sole proprietorship owned my Michael Phillips) to purchase a new one. Several were displayed, including a second-hand one, manufactured by Motown Ltd. It had a huge sign on it saying ‘Great Bargain. Low mileage. Almost as good as new. Buy now and save!! Yours for $25,000.’
Nicole asked Mariel, the salesperson, what ‘low mileage’ meant. Mariel explained that the machine had hardly been used and had only completed 2,000 copies. Nicole then asked how old it was. Mariel replied, ‘ Oh I’m not 100 % sure but I think it is last year’s model’. Nicole told Mariel about her business of copying student papers which included photographs, and then asked if the copier could do a number of specialized tasks, such as color copies, double-siding, collating, stapling and reducing. Most importantly, she asked whether it was capable of producing large quantities of copies quickly and without breaking down.
Mariel reassured her and said: ‘This copier will do all that and more. It has the best quality lens for really clear reproductions. You’ll have no problem and anyway we provide a month’s free service. We have had no complaints about this model.’Nicole then signed a contract of purchase, buying the copier for $25,000.
When using the copier, Nicole realized that not all copies were clear, the colors appeared to be ‘washed-out’ and ‘red’ was always ‘pink’. She rang Michaels Copy Repair and Sales who sent out a repairman to service the machine. The next day the copier broke down and the repairman explained that it needed a new lens valued at $10,000. Nicole, who had just recently obtained a contract, valued at $30,000, to provide copying services to the college’s Faculty of Business, was placed in a stressful position. In order to honor this contract, Nicole had to get the new lens and in the meantime, she had to lease another copier from ‘Alex’s Office Rentals’ at $100 a day for a total of 14 days. When Nicole explained her story to Alex, he laughed and said that that particular model of copier was always breaking down and had been recalled by the manufacturer due to the overwhelming number of complaints. He also said that it was about 5 years old and explained that normally a lens only needed replacing after 100,000 copies had been made. Furthermore, he believed the copier was only worth approximately $5,000.
When the new lens arrived, Nicole continued to have problems. The machine could not reduce and produce double-sided copies simultaneously. It could perform each task separately, but not simultaneously.
Michaels Copy Repair and Sales Ltd sent Nicole a bill for the new lens, which Nicole refused to pay because she thought it was included in the first month’s free service. Michael the owner of Michaels Copy Repair and Sales replied that the service deal didn’t include spare parts, just the labor costs. Nicole re-read the contract. Although it contained a clause which stated that there was one month’s free service, the meaning of ‘service’ was not stated.
She did however, notice the following clause: ‘Any conditions, statutory or otherwise, not contained herein are excluded.’
What legal rights (including remedies) would Nicole have against Michaels Copy Repair and Sales arising out of the above set of facts? Explain your answer. Include a discussion on the law of agency, contractual provisions, enforcement, remedies and defenses.
Should be about 2 pages long but NO MORE THAN 3 and it should include discussion about the various types of business organizations involved in the transactions and the liability associated with those types of business organizations. Should also include a discussion on the law of agency, contractual provisions, enforcement, remedies and defenses.
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