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A) Mississippi Chemical Corporation (MCC) Essay

1.    Facts

A)           Mississippi Chemical Corporation (MCC) produces ammonia by way of gas compression through specialized containers.

B)           In 1989 MCC purchased from Dresser Rand, two compression cylinders that had a guarantee to be free from defects and would perform appropriately.

C)           In 1990, 1993 and 1996 the compressors showed defects.

D)           In 1990 when the first compressor broke, MCC wrote Dresser Rand informing them of their breach of contract due to defects.

E)            In 1993 & 1996, the same defects happened in the remaining cylinder.

F)            In 1997 MCC filed a federal suit against Dresser Rand.

G)           Dresser’s argument was that it never received notification of defests and wanted summary judgment.

2.    Issue:

A)       MCC bought compression cylinders that had defects.  The cylinders were guaranteed defect free.

B)      The cylinders broke due to these defects and MCC wanted retribution.

C)       Dresser Rand states they did not receive notification of the alleged breach of contract letter and wanted summary judgment by the Federal District Judge.

3. Rules and analysis:

Under good faith, Dresser Rand sold the cylinders but under agreed contarct, these cylinders had a guarantee of being free of defects.  Defects appeared and cost loss of monies, went against the contract which in turn purports a breach of contract.  UCC 1-203 states

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that good faith means honesty in fact.  With defects there is an inherent lack of honesty.  Under UCC 2-703 & 2A 523 (1)(a), the buyer has the right to stop any payments they may still owe to the seller due to the breach.  This can only be done after notification.  Despite that Dresser Rand received no notification even though MCC sent notification, the notification would still be considered as being constructively received, even if not physically.  With these few details, it is apparent the Dresser Rand has a duty and an obligation to MCC and it failed in that duty and obligation therefore MCC should be awarded damages.

4. Conclusion:

MCC was awarded over $4,000,000,000 for loss of profits due to malfunctions brought on by the defects.  Dresser Rand assured defect free products and did not make good on their promise.  Dresser appealed to the Court of Appeals and the court affirmed the lower courts decision based upon the fact that MCC had provided notice of defecta and contractural default/breach of contract.  The notofication of findings of the defects were considered as reasonable in timing as MCC immediately sent a letter of attestment. It was furthermore shown that the defects in the later cylinder were the same as the ones in the first cylinder.  With these statements in fact, MCC prevailed all the way.

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