Question
SATISFACTION CLAUSE: I DON'T LIKE IT Commercial contracts often include satisfaction clauses that are designed to ensure that an appropriate quality of performance is received
SATISFACTION CLAUSE: "I DON'T LIKE IT" Commercial contracts often include "satisfaction clauses" that are designed to ensure that an appropriate quality of performance is received before the promisee is obligated to pay. But how satisfied must the contracting party be before there is an obligation to pay? Consider the following case. General Motors Corporation hired Baystone Construction, Inc. (Baystone) to build an addition to a Chevrolet plant in Muncie, Indiana. Baystone, in turn, hired Morin Building Products Company (Morin) to supply and erect the aluminum walls for the addition. The contract required that the exterior siding of the walls be of "aluminum with a mill and stucco embossed surface texture to match texture of existing metal siding." The contract also included a satisfaction clause. Morin put up the walls. The exterior siding did not give the impression of having a uniform finish when viewed in bright sunlight from an acute angle and General Motors' representative rejected it. Baystone removed Morin's siding and hired another subcontractor to replace it. General Motors approved the replacement siding. When Baystone refused to pay Morin the $23,000 balance owing on the contract, Morin brought suit against Baystone to recover this amount. The trial court held in favor of Morin and permitted it to recover the balance from Baystone. The court of appeals affirmed. The court held that the objective reasonable person standard governed the satisfaction clauses in this commercial dispute. The reasonable person standard applies to most contracts involving commercial quality, operative fitness, or mechanical utility that other knowledgeable persons can judge. The court of appeals held that Baystone was not justified in rejecting Morin's work under the reasonable person standard. The court stated, "The building for which the aluminum siding was intended was a factory. Aesthetic considerations were decidedly secondary to considerations of function and cost. The parties probably did not intend to subject Morin's rights to aesthetic whims." Morin Building Products Co., Inc. v. Baystone Construction, Inc., 717 F. 2d 413 (7th Cir. 1983). 1. Do you think General Motors was justified in rejecting Morin's work in this case? 2. Should the law adopt the personal satisfaction test to j
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