Description
This set of facts is to be addressed using the relevant sections of the UCC that you have read and are familiar with thus far in the course. Your response should not be more than four (4) pages, double spaced and should focus on why and how the relevant sections of the UCC will guide the parties to a conclusion, and which party should prevail under the UCC.
Transamerica is in the business of drilling and completing oil and gas wells. Transamerica’s president, Harold Brown, saw Lynes advertisement for “production injection packers” in a trade journal. A packer is a device inserted into an oil and gas well to seal off one zone from another, generally to stop water from entering the well bore and interfering with production. Frequently, packers are employed for temporary use in holes that have been cased and cemented.
Lynes advertisement, however, stated that its production injection packer was suitable for permanent use in open holes. Because Brown wanted to avoid the expensive casing and cementing process, he was interested in the advertised device as a better and cheaper alternative. He telephoned Lynes and spoke with a sales representative. Lynes then sent Brown additional advertising and descriptive literature. This literature also stated that the production injection packer was suitable for use as a permanent completion device in open well holes.
Later, Brown telephoned Baker’s district manager, Jack Spencer, to whom the Lynes representative had referred him, and Brown told Spencer that he was interested in purchasing the production injection packer for use as a permanent completion device for oil and gas wells in lieu of the casing and cementing process.
The sum and substance of that conversation is in dispute. Spencer indicated that when asked about the packers being suitable as a permanent device, he replied, “I think they would be applicable.” Brown, however, strongly indicated that Spencer “assured” him that the packers would work as advertised, and would be a permanent device.
Transamerica then purchased ten production injection packers in six shipments from Lynes. Lynes delivered invoices to Transamerica with at least five of those shipments.
Each invoice contained language on its reverse side disclaiming any express or implied warranties other than the products were free from defects in materials and workmanship. Each invoice also purported to limit the purchaser’s remedy to replacement of or credit for defective equipment or parts.
Once installed, however, the packers did not work as Brown felt was represented. They started to leak, and ultimately did not mitigate against Transamerica from having to case and cement the holes. He felt the goods were misrepresented.
Transamerica is contemplating filing a lawsuit, claiming that the production injection packers failed to perform properly and as advertised.
How would the UCC apply to help determine which of the parties is correct here? Please be specific and indicate which parts of the UCC applies, how it applies, and why it applies.
