Law for Business 12th Edition by James Barnes,Terry Dworkin,Eric Richards

Exercise 5

Catherine Baker purchased a fake fur coat from the Burlington Coat Factory Warehouse store in Scarsdale, New York, paying $127.99 in cash. The coat began shedding profusely, rendering the coat unwearable. The shedding was so severe that Baker's allergies were exacerbated, necessitating a visit to her doctor and to the drugstore for a prescription. She returned the coat to the store after two days and demanded that Burlington refund her $127.99 cash payment. Burlington refused, indicating that it would give her a store credit or a new coat of equal value, but no cash refund. Baker searched the store for a fake fur of equal value and found none. She refused the store credit, repeated her demand for a cash refund, and brought a lawsuit against Burlington when it again refused to make a cash refund. In its store, Burlington displayed several large signs that state, in part, WAREHOUSE POLICY Merchandise in New Condition May Be Exchanged Within 7 Days of Purchase for Store Credit and Must Be Accompanied by a Ticket and Receipt. No Cash Refunds or Charge Credits. On the front of Baker's sales receipt was the following language: Holiday Purchases May Be Exchanged Through January 11th, 1998. In House Store Credit Only. No Cash Refunds or Charge Card Credits. On the back of the sales receipt was the following language: We Will Be Happy to Exchange Merchandise in New Condition Within 7 Days When Accompanied By Ticket and Receipt. However, Because of Our Unusually Low Prices: No Cash Refunds or Charge Card Credits Will Be Issued. In House Store Credit Only. At the trial, Baker claimed that she had not read the language on the receipt and was unaware of Burlington's no-cash-refunds policy. The court found that Burlington had breached the implied warranty of merchantability when it sold the defective coat to Baker. Where the seller breaches the implied warranty of merchantability and the buyer returns the defective goods, is the buyer entitled to a refund of the purchase price paid for the goods?