The Nagatomi Corporation is Canada's largest manufacturer of farm machinery. It specializes in custom-designing equipment to meet

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The Nagatomi Corporation is Canada's largest manufacturer of farm machinery. It specializes in custom-designing equipment to meet its customers' individual needs. Inga Raimani operates a farm in the foothills of Alberta. Because the terrain in the area is quite uneven in places, she cannot use a standard harvesting machine. Unfortunately, the custombuilt harvester that she has used for the past 23 years was destroyed in a fire last winter. Immediately after the accident, she contacted Nagatomi and ordered a replacement. She stressed to the sales representative that she absolutely needed the machine by the first day of September. The parties drafted a contract, which contained the following provisions:

(5) The Nagatomi Corp shall deliver the unit by the last day of August of the current year.

(6) Inga Raimani shall pay the full price of $150 000 before delivery.

(9) In the event that payment is not received by the last day of August of the current year, Inga Raimani shall lose the right to demand possession of the machine and the Nagatomi Corp shall have the right to sell the machine to another customer. If the machine is re-sold to another customer, Inga Raimani shall compensate the Nagatomi Corp for any expenses or losses that it incurs as a result.

In the middle of August, Nagatomi contacted Inga and informed her that the machine was ready for delivery. At that point, however, Inga informed the company that she did not have $150 000 and that she was unable to obtain a bank loan. She explained that her financial situation had been badly damaged by a number of health problems and by a sharp increase in the cost of farm supplies. But she also further explained that her crop was particularly good and that she would easily be able to pay the full price, with interest, after the harvest. She therefore pleaded with the company to deliver the machine first and to accept payment later.

Nagatomi realizes that Inga cannot harvest her crop without the machine. It also realizes, in light of her recent problems, that Inga would probably be forced into bankruptcy if she could not bring in the harvest. At the same time, however, it knows that it is not under any legal obligation to deliver the machine before payment. Furthermore, it has received an order from a farmer in Colorado for a custom-built harvester with exactly the same specifications as Inga's. That harvester does not need to be delivered until the end of next summer.

Is Nagatomi under any obligation to deliver the machine to Inga? Does it have a legal obligation? A moral obligation? Even if it does not have any obligation, should it agree to Inga's proposal? What factors influence your answer?

Corporation
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Related Book For  answer-question

Managing the Law The Legal Aspects of Doing Business

ISBN: 978-0133847154

5th edition

Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer

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