28 December 2012

Contract

Somewhere there's a contract.

Someplace on that contract it spells out exactly who supplies what to whom, when and for how much.

Somewhere in that block of text will be penalties for failing to deliver, assuming that either party to the contract is not stupid, naive or both.

That brings us to Dick's v Troy.

Dick's Sporting Goods has refused delivery of Troy's rifles.

It could be that Dick's had a "bail at will" clause in the contract.  If they did, then Troy was naive to do business with them.  If there is no such clause then Dick's owes Troy for the rifles.  They don't have to sell them in their stores, but they do have to pay for every one the contract stipulates they bought.

Otherwise they're in breach of contract and the penalty clauses kick in.  Dick's could very well decide that paying those penalties is worth more than the cost in dollars.  Again, Troy is foolish if the penalties are not more than the actual cost of the guns.

The customers who bought these rifles during the black friday sales are a murkier case.  Most of those sales have a "limited supply" clause in them that makes it first come first serve and if demand exceeds supply, you get your money back.  Some states have more stringent "rain check" rules on sales; but most consist of a refund when the item is genuinely unavailable and it doesn't normally penalize "discontinued" items.

An angle that might be pursued is the $800 rifle can no longer be procured because of a dramatic change in the market.  Dick's sales promise incurred an opportunity cost on the customer who would have otherwise bought such a rifle before the shift in prices.  Conceivably Dick's could be on the hook for the difference in price between the rifle they are refusing to accept from the manufacturer for sale and the price of an equivalent in addition to paying a refund.

That would take a clever lawyer, but I am sure there are such out there.


1 comment:

  1. I suspect that Dick's is fsck'd, at least with the customer sales. Apparently Troy had an exclusive deal with them, so their ability to supply the already-ordered rifles shouldn't be affected by the spike in demand. The supply of those rifles isn't limited, and the only reason Dick's "can't" deliver the already paid for rifles is that they voluntarily chose not to. Unless Dick's has a clause in the order contract that says they can cancel the order for "any reason" without notice, they are probably in violation of the contract.

    Either way, I had been considering buying a gun cabinet from them, but now they'll never get a penny from me, ever, for anything.

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