Reference no: EM131156167
PROBLEM:
On January 2, 2016, Buyer, a retail tire dealer, faxed a purchase order to Seller, a tire manufacturer for the purchase of 120 Size A tires, 80 Size B tires, and 40 Size C tires. The purchase order instructed to ship "C&F" to our warehouse in Baltimore, Maryland, by January 15, 2016. Terms: Payment 30 days from delivery. Seller promptly faxed an acknowledgement, but added an additional term stating that a 5% interest would be added to all past due balances. Buyer did not respond to Seller's fax. Seller shipped tires, freight paid, by common carrier, which delivered them to Buyer's Baltimore warehouse on January 15, 2016. When Buyer's employees unloaded the tires, the warehouse manager noted on the delivery receipt that Size B was "20 over" and Size C was "20 short".
A fire of undetermined origin occurred at Buyer's warehouse on the evening of January 15, 2016, destroying all the tires. Buyer had no insurance on the contents of the warehouse. On February 16, 2016, Buyer sent a fax to the Seller indicating that the shipment received January 15, 2016 was non-conforming because the sizes were not as ordered. Seller also stated that the tires were unavailable for return due to a fire in warehouse.
Please answer the following:
1. What are the rights of the Buyer under the Uniform Commercial Code? Please explain what action the buyer can or should have taken.
2. Did Seller's additional term become a part of the contract? Why or why not?
3. Did the buyer properly reject the goods? Why or Why not?
4. Since the goods were destroyed who bears the risk of loss and why?
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