Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

Exercise 21

FACTS Over the Labor Day weekend in 1995, James Fitl attended a sports-card show in San Francisco, California, where he met Mark Strek, doing business as Star Cards of San Francisco, an exhibitor at the show. Later, on Strek's representation that a certain 1952 Mickey Mantle Topps baseball card was in near-mint condition, Fitl bought the card from Strek for $17,750. Strek delivered the card to Fitl in Omaha, Nebraska, and Fitl placed it in a safe-deposit box.
In May 1997, Fitl sent the card to Professional Sports Authenticators (PSA), a sports-card grading service. PSA told Fitl that the card was ungradable because it had been discolored and doctored. Fitl complained to Strek, who replied that Fitl should have returned the card within "a typical grace period for the unconditional return of a card, … 7 days to 1 month" of its receipt.
In August, Fitl sent the card to ASA Accugrade, Inc. (ASA), another grading service, for a second opinion of the value. ASA also concluded that the card had been refinished and trimmed. Fitl filed a suit in a Nebraska state court against Strek, seeking damages. The court awarded Fitl $17,750, plus his court costs. Strek appealed to the Nebraska Supreme Court.
ISSUE Was two years after the sale of the baseball card a reasonable time to discover a defect and notify the seller of a breach?
DECISION Yes. The state supreme court affirmed the decision of the lower court.
REASON Section 2-607(3)(a) of the UCC states, "Where a tender has been accepted … the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy." "What is a reasonable time for taking any action depends on the nature, purpose and circumstances of such action" [UCC 1-205(a)]. The state supreme court concluded that the buyer (Fitl) had reasonably relied on the seller's (Strek's) representation that the goods were "authentic," which they were not, and when their defects were discovered, Fitl had given timely notice.
The court reasoned that "the policies behind the notice requirement, to allow the seller to correct a defect, to prepare
for negotiation and litigation, and to protect against stale claims at a time beyond which an investigation can be completed, were not unfairly prejudiced by the lack of an earlier notice to Strek. Any problem Strek may have had with the party from whom he obtained the baseball card was a separate matter from his transaction with Fitl, and an investigation into the source of the altered card would not have minimized Fitl's damages."
WHAT IF THE FACTS WERE DIFFERENT? Suppose that Fitl and Strek had included in their deal a written clause requiring Fitl to give notice of any defect in the card within "7 days to 1 month" of its receipt. Would the result have been different ? Why or why not?