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Question: problem questions sale of goods kim required lithium batteries...

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Problem questions - Sale of Goods

Kim required lithium batteries for her laptop repair business. As well as repairing laptops she sells generic laptop batteries as spares. Her batteries sell for half the price of branded original equipment. Kim orders her batteries from Sleeper Cells who manufacturer batteries in Australia from battery cells imported from China. The specifications of the batteries are critical. The correct external dimensions of the battery are critical otherwise they won’t fit; and the power output needs to correlate with the power usage of the respective laptop. Sleeper Cells won Kim’s business by emphasising their skill in manufacturing third party batteries which will work as well as the originals in a wide range of laptops. They also claimed they keep up to date with all the technology developments of the leading laptop brands.

Kim ordered four sets of batteries to suit the W10, X12, Y15, Z20 model XYZ laptops. XYZ is a global laptop brand. Kim provided complete specifications for the batteries and was also assured by Sleeper Cells that their battery manufacturing experience meant they had a good idea of what was required for the respective XYZ models. Sleeper Cells sent Kim preproduction examples of each of the four types of batteries for initial testing. They appeared to work. Kim ordered one thousand of each. After a month of selling the batteries Kim started to get complaints from customers.

1. The W10 battery worked well initially but after a few charges was not holding its charge as well as the original XYZ branded battery.

2. The X12 battery turned out to be a NiCad battery and not a lithium battery. It worked according to its specifications except it sometimes exhibited a ‘memory effect’ which meant it would not charge completely unless put through a complete discharge/recharge cycle.

3. The Y15 battery worked perfectly. However a subsequent XYZ firmware update meant that the corresponding laptops no longer recognised the Y15 battery. The aim of the firmware update was to restrict users to XYZ batteries only.

4. The Z20 model worked perfectly except occasionally overheated leading to laptops suddenly shutting down.

5. One of Kim’s major clients was a government department. She lost the battery maintenance contract for that customer.

6. Only half the batteries have been delivered and Kim now refuses to accept delivery of the balance of the order.

Kim can no longer sell the batteries and has useless stock. Does Kim have a remedy against Sleeper Cells? What aspects of the transaction need to be determined in order to establish a remedy? 

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