Monroe sold computers. On the purchase of a new IBM computer the buyer signed the written contract that contained the following clause: "The seller is not liable for any breach of condition or warranty express or implied in this contract." The buyer was a businessman who intended to use the machine in his business for a while and then resell it. The machine was used properly but didn't operate well, and within one week it would not work at all. Monroe refused to take back the machine or to refund any money by relying on the exemption clause. Which of the following would be the buyer's best argument for avoiding the effect of the exemption clause in this case?
A) The buyer had no notice of the clause; therefore, it is not a term of the contract.
B) There is a breach of a non-essential term of the contract.
C) There is a fundamental breach of contract.
D) Such clauses are prohibited under contract law and are therefore void.
E) On a narrow interpretation of the words used in the exemption clause, they do not cover his complaint.

Question

Quizplus · Accepted Answer

The buyer's best argument would be that there has been a fundamental breach of contract. A fundamental breach of contract is a serious breach that goes to the root of the contract and deprives the innocent party of substantially the whole benefit of the contract. In this case, the computer was purchased for use in business and it failed to function properly within a week. This goes to the root of the contract and deprives the buyer of substantially the whole benefit of the contract. The exemption clause would not apply to a fundamental breach of contract, making it void.

Monroe Sold Computers