Business Law and Ethics Case Study: Defective Goods and Negligence

This case study analyzes a business law scenario involving a company, Cabinet Co., and a caster seller. The case revolves around the delivery of defective casters, leading to a breach of contract and potential negligence. The analysis identifies the breach of contract by the caster seller for supplying defective goods and the negligence of Cabinet Co.’s supervisor, Frank, for failing to inspect the shipment promptly. The study outlines the elements of both breach of contract and negligence, referencing relevant legal principles and case law. It concludes that Cabinet Co. can sue the caster seller for damages and specific performance, while Frank can be sued for breaching his duty of care. The case also suggests the possibility of alternative dispute resolution methods. The document provides a detailed examination of the legal and ethical dimensions of the case, offering insights into potential remedies and responsibilities.

Running head: BUSINESS LAW AND ETHICS
Business Law and Ethics
Name of the Student
Name of the University
Author Note

1BUSINESS LAW AND ETHICS
Table of Contents
Areas of Law..............................................................................................................................2
Elements of Law........................................................................................................................2
Key Facts....................................................................................................................................2
Decision......................................................................................................................................3
References..................................................................................................................................4

2BUSINESS LAW AND ETHICS
Areas of Law
The given case study involves the law of tort and the law of contract. The caster seller
sending defective casters is a breach of contract that it had with Cabinet Co. On the other
hand, the ignorance of Frank (Cabinet Co’s supervisor) to inspect the casters while receiving
the shipment of the defective casters constitute breach of duty of care, which is the tort of
negligence.
Elements of Law
Element of Breach of Contract
To constitute a breach of contract, the following elements are required to be present:
a) A legally binding contract exists between the parties,
b) There is an act or omission in regard to a contractual clause of such contract, and
c) Such act or omission has caused loss or damage to one of the parties, amount to
breach of contract (Cartwright, 2016).
Element of Negligence
The following elements constitute a tort of negligence under law of torts:
a) A duty to take care existed between the plaintiff and the defendant,
b) The duty of care was not executed,
c) The non-execution of the duty caused injury or loss to the plaintiff,
d) The injury of damage was not too remote (Daye & Morris, 2019).
Key Facts
The goods sent to Cabinet Co by the caster seller were found to be defective when
they were opened for inspection after 20 days since Frank received the shipment of the caster
on June 1. It was Frank’s duty to inspect the goods as soon as he received them on behalf of

3BUSINESS LAW AND ETHICS
Cabinet Co, being the receiving dock supervisor of the company. Failure to inspect the
shipment has caused injury to the company as it had lost several contracts for rolling cabinets
but also had to pay an excess of 15% to replace the casters. It was not unforeseeable that a
shipment of goods may have certain defects and hence it was the duty of the receiving dock
supervisor to inspect the shipment before receiving it and making the payment (Daye &
Morris, 2019).
On the other, there must have been a contract between Cabinet Co and the caster
seller to supply casters of a specific description, which has been breached by the caster seller
by sending defective casters (Cartwright, 2016). Such an act of the seller has caused loss to
Cabinet Co.
Decision
Cabinet Co can sue to the caster seller for damages so that the company could cover
its loss incurred to replace the defective casters. In addition, the company could ask for the
remedy of specific performance where the adjudicating authority would ask the caster seller
to resend the shipment of correct casters (Cartwright, 2016). However, the parties also have
the option to choose Alternative Dispute Resolution for resolving the dispute between them,
through arbitration or conciliation.
Cabinet Co can sue Frank for breaching his duty of care towards the company being a
supervisor, who is vested with the duty to inspect shipments immediately as they arrive or at
least before making the payment to the other party.

4BUSINESS LAW AND ETHICS
References
Cartwright, J. (2016). Contract law: An introduction to the English law of contract for the
civil lawyer. Bloomsbury Publishing.
Daye, C. E., & Morris, M. W. (2019). North Carolina Law of Torts. LexisNexis.