Sale of Goods
A contract over the sale of goods may raise special issues. Such sales are governed by a body of law called the Uniform Commercial Codes (the "UCC"), which prescribes special rules. For example, ordinarily, parties to a contract have six years to commence a law suit. But for a contract over the sale of goods, the UCC requires that an action be brought within four years.
A frequent problem faced by the purchaser is the seller's disclaimers liability. For example, the contract of sale will often try to limit the purchaser to a paltry remedy. For example, the manufacturer of a defective part my seek to limit the purchaser to the price of the part, even if the purchaser's business was destroyed by the part malfunctioning.
But there are ways around the disclaimer. For example, a seller of construction materials may attempt to limit the purchaser to a refund so long as the materials have not been used in the construction. But if the defect is a latent one, and can't be detected until after the building has fallen, the limited remedy is illusory-- not to mention totally inadequate.
But law has developed that if the limited remedy fails of its essential purpose, the purchaser is not limited to that remedy. Thus, in a famous case, tulip bulbs contained a defect that wasn't discoverable until the bulbs failed to germinate the following spring. Under those circumstances, an attempt to limit the purchaser to replacement of the bulbs prior to planting was deemed to fail of its essential purpose.
A common problem with the sale of goods occurs if the goods arrive late. For example, swim suits are time-sensitive. A delay in the delivery of the suits may entitle an importer's customer-- such as a department store-- to cancel his order. That makes the suits of no value to the importer, as well as damaging the importers goodwill with his customer.
An action by the importer against the manufacturer will run into the latter's consequential damages clause. Such clauses bar the importer from recovering such items as lost profits, as opposed to the purchase price of the goods. But there sometimes ways around such clauses. For example, in New York, if the seller means to protect himself from his own negligence, some courts have held that the word "negligence" must appear in the clause. Thus, a manufacturer with an flawed consequential damage clause may be liable for the importer's lost profits.