Is this a hypothetical for a class? If so, are you allowed to apply state laws to the situation? If so, what state's laws are applicable?
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FACT: On, January 8,2002, O'Grady purchased a new Buick from Hoselton Motors.
DISCUSSION: O'Grady and Hoselton entered into a contract for the purchase of the new Buick (undisputed). The contract was executory, because the car had not been delivered to O'Grady yet.
FACT: O'Grady gave Hoselton a down payment on the car and financed the rest of the purchase price through her bank.
DISCUSSION: O'Grady entered into a loan agreement with her bank for the purchase of the car. This is a separate contract between O'Grady and the bank.
FACT: She picked up the new car on Jan 10 and drove it to a few places including a local mall and to a doctors office.
DISCUSSION: The contract was completed because O'Grady accepted the new car. The facts show that O'Grady did not misuse the car. This is a defense.
FACT: On jan11 the car broke down and had to be towed back to Hoselton for repairs.
DISCUSSION: This is Hoselton's first attempt at repairs.
FACTS: She picked the car up on Jan 13 but again it broke down and had to be towed back. this pattern of malfunctioning went on for several months well into April. each time the car was returned to hoselton for repairs.
DISCUSSION: O'Grady had to return the cars for significant repairs three or more times within a three month period.
QUESTION: Finally O'Grady wrote a letter to Hoselton revoking the sale. She followed up by returning the car and requesting a return of her down payment. Hoselton claimed that O'Grady request to void the contract is not valid option because Hoselton did not have a chance to cure the defects. Is Hoselton correct?
ANALYSIS: O'Grady and Hoselton entered into a contract for the purchase of the car. The contract was executory, until O'Grady accepted delivery of the car. O'Grady also entered into a separate contract with her bank for financing of the car, although that separate contract is only at issue to the extent that O'Grady is asking for the money back from the dealer.
In the purchase of goods, including vehicles, there is an "implied warranty of fitness for a particular purpose." In this case, the implied warranty of fitness would be an implied warranty that the car was drivable.
In Georgia, as well as in other states, there are "Lemon Laws." Lemon Laws recognize that some new cars simply are defective from the outset. Some states - Georgia, for example - require that all new cars be sold with an express statutory warranty. Georgia's Lemon Laws state that if a dealer cannot repair a vehicle within a reasonable number of attempts, the dealer needs to refund the purchaser's price. (Here is a link to Georgia's Lemon Laws: http://autopedia.com/html/LemonLaw/GA_lemonlaw2.html.)
The facts show that O'Grady did use the car in such a manner that would cause it to have mechanical breakdowns. The facts also show that the car had three or more serious breakdowns in less than a three month period; and that O'Grady gave Hoselton the exclusive opportunity to repair the vehicle every time their was a breakdown.
Considering O'Grady's reasonable use of the car; the number of breakdowns; and the fact that Hoselton always had the opportunity to fix the problem, but didn't, O'Grady's request for rescission and restitution (cancellation of the contract and return of her money) is reasonable and valid.
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