Round Tire Co. sells 1,000 tires to Green Rent-a-Car for use on Greens fleet. The same day,

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Round Tire Co. sells 1,000 tires to Green Rent-a-Car for use on Green’s fleet. The same day, it sells one new tire to Betty Blue for use on her car. For both sales, Round uses a sales agreement that includes: “LIMITATION OF REMEDIES. Round agrees to repair or replace any tire which Round determines was defective, within 12 months or 25,000 miles, whichever comes first. Buyer agrees that this is Buyer’s SOLE REMEDY; Buyer is not entitled to consequential or incidental damages or any other remedy of any kind.” All of Round’s tires prove defective. Green is so disgusted, it immediately purchases substitute tires from another manufacturer. Green loses $12,000 in extra tire costs and $75,000 in lost rental payments because many of its cars must be off the road waiting for tires. Betty Blue’s new tire blows out as she is driving to church, and Betty suffers broken bones. Green and Blue both sue. Predict the outcomes.

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Business Law and the Legal Environment

ISBN: 978-1111530600

6th Edition

Authors: Jeffrey F. Beatty, Susan S. Samuelson, Dean A. Bredeson

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