Ginny Klein orally agreed to purchase a security system for her business from IHK.The price for the system was $45,000.Klein wanted to use the system to monitor activity of persons entering and exiting the facilities.The sale of the system also included a one-time setup service visit priced at $1,000.The total contract price amounted to $46,000.The security system was delivered and set up, and Klein paid $46,000.Afterwards, Klein discovered that she could obtain the same goods and services from another seller for a total contract price of $38,750.Klein now seeks rescission of the contract, based on the fact that more than $500 in goods was involved in the sales transaction, that the contract between IHK and her company was subject to the statute of frauds and that the oral agreement between them was therefore unenforceable.Klein wants to return the system to IHK, and receive reimbursement of $45,000 (She is willing to waive his claim to reimbursement for the $1000 setup service visit.)

• Evaluate Klein's legal position in this matter using the common law of contracts or the UCC.

Scenario 3 - Product Liability

Karl was not a licensed plumber, but occasionally installed hot water heaters as part of his handyman business.Karl installed a new 50-gallon hot water heater manufactured by Rheem for Alana, a single mother with two children.Warnings were provided in large bold letters on a metal plate on the water heater.Similar warnings were provided in the manual Karl provided to Alana at the time of installation.The warning on the water heater read "CAUTION: HOT WATER CAN SCALD."The heater itself contained a picture of hot water coming from a faucet with the words "DANGER" printed above it.

Karl set the temperature to 110F.The next day, 4-year-old Shannon was being bathed by her 12-year-old sister, Joy.When Joy received a call on her cell phone, she left Shannon alone in the bathtub with the water running.Shannon was scalded by the water from the tap.Shannon's mother brought suit against Karl and the manufacturer.alleging defects in the design of the water heater and Karl's failure to warn her about the heater's dangers.

• Provide arguments that Karl, Alana and the manufacturer will introduce in court.
• Determine which party should win and support your answer.