What should Barr be able to recover from S-2 Yachts and Crow’s Nest?
Through information provided by S-2 Yachts, Inc., the plaintiff, Barr located a yacht to his liking at the Crow’s Nest marina and yacht sales company. When Barr asked the price, he was told that, although the yacht normally sold for $102,000, Crow’s Nest was willing to sell this particular one for only $80,000 to make room for a new model from the manufacturer, S-2 Yachts, Inc. Barr was assured that the yacht in question came with full manufacturer’s warranties. Barr asked if the yacht was new and if anything was wrong with it. Crow’s Nest told him that nothing was wrong with the yacht and that there were only twenty hours of use on the engines. Once the yacht had been delivered and Barr had taken it for a test run, he noticed several problems associated with saltwater damage, such as rusted screws, a rusted stove, and faulty electrical wiring. Barr was assured that Crow’s Nest would pay for these repairs. However, as was later discovered, the yacht was in such a damaged condition that Barr experienced great personal hazard the two times that he used the boat. Examination by a marine expert revealed clearly that the boat had been sunk in saltwater prior to Barr’s purchase. The engines were severely damaged, and there was significant structural and equipment damage as well. According to the expert, not only was the yacht not new, it was worth at most only one-half of the new value of $102,000. What should Barr be able to recover from S-2 Yachts and Crow’s Nest?
The goods sold by the seller should be saleable and serve the actual purpose of the product. When the buyer buys a product, based on the sample and inquiry, it is implied that the product has to be new. The yacht that was sold was defective and had lost its merchantability.
The facts about the product were not disclosed before sale, which makes Company S liable to Individual B for the losses incurred. The losses include the repair cost spent by Individual B and the measure of damages, calculated as per the clause.
According to the buyer's damages for breach, with respect to the accepted goods clause, Individual B can claim the damages. The yacht sold by Company S was not saleable in the normal course since it is not a new product.
The implied warranty on the product cannot be denied, even though Individual B had noticed the rusted screws since it could have been the effect of the salt water.
Individual B has the right to recover the expenses on repairs and the resulting amount from the difference of the yacht value accepted and worth of the yacht if warranted.