Question: Computronics, a Pittsburgh company, makes audio decoder chips, one of the essential components used in the manufacturer of car steroes. Johnson Manufacturing contracts with Computronics
Computronics, a Pittsburgh company, makes audio decoder chips, one of the essential components used in the manufacturer of car steroes. Johnson Manufacturing contracts with Computronics to buy chips on an installment contract with chips shipped every three months, FOB Pittsburgh via FedEx. At the time for the first delivery, Computronics delivers on chips but explains to Johnson that even though the shipment is short, the chips are of a higher quality than those specified in the contract and are worth more than the contract price. Johnson accepts the shipment and pays Computronics the contract price. At the time for the second shipment, Computronics makes a shipment identical to the first. Johnson again accepts and pays for the chips. At the time for the third shipment, Computronics again ships of the same chips, but this time Computronics sends them via UPS instead of FedEx. While in transit the chips are destroyed. When it is time for the fourth shipment, Computronics again sends chips, but this time Johnson rejects the chips without explanation. Answer the following: Did Computronics have a legitimate reason to expect that Johnson would accept the fourth shipment? Why or why not? Does the substitution of carriers for the third shipment constitute a breach of contract by Computronics? Explain What type of contract is this in terms of delivery and when did title pass to the chips? Under the UCC, does Johnson have a right to reject the fourth shipment alone? Why or why not? Suppose the silicon used for the chips becomes unavailable for a period of time and Computronics cannot manufacturer enough chips to fulfill the contract but does ship as many as it can to Johnson. Under what doctrine might a court release Computronics from further performance of the contract?
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