Legal Question in Business Law in California

Re: Label Problem

The previous answers gave you your legal rights and obligations, subject to what your contract with the buyer says. You should also consider the practical aspects: How large a contract is this? Which response best protects your credibility in the market? How important a client is this? An ongoing client or a one-shot deal. Have you spoken to the client about replacing the defective labels, or are you just going on the e-mail? How important is it for you to retain this client relationship and, if so, what is the best course for doing that?If the client is adamant about wanting its money back, it is not going to be happy with the replacement labels. On the other hand, if you haven't talked to your customer, it may be unaware that you have redone the work to replace the defective labels. Maybe you can replace the labels, keep the payment you received, and offer a discount on their next order for their inconvenience -- all for less than the cost of fighting a lawsuit (which results in losing the client in any event).

Re: Label Problem

The answer to your question depends on whether the contractual time for your performance has run.

If, for example, you have until the end of this year to provide the labels, then you may notify the buyer that you will be shipping the corrected labels and you may deny the buyers request for a refund.

Conversely, if your time for performance has already expired, then you should give the refund.

The authority for this response is California Commercial Code section 2508.

Good luck.

Re: Label Problem

What is the delivery time specified in the contract? As I remember the Commercial Code, a seller can replace defective goods if the replacements can be delivered within the delivery time specified. If the contract does not state a particular delivery date, a court would try to determine what date the parties had in mind under the circunstances and allow the seller a reasonable time to deliver.