This is Case 6.6 US Company Pays Millions for Breach of Warranties Case Name and Court Pattison Outdoor Advertising Limited Partnership v Zon LED LCC (British Columbia Supreme Court, 2018)6 Facts Pattison Outdoor Advertising Limited Partnership (Pattison) is a Canadian advertising company that has thousands of outdoor billboards across the country. It contracted with Zon LED LCC (Zon), a US company, for the purchase of retrofitted LED lighting fixtures. The sales agreement between Pattison and Zon consisted of numerous purchase orders and a written document titled "Pattison Special Limited Warranty " ("Limited Warranty") (collectively, the "Sales Agreement"). Pursuant to the Sales Agreement, Pattison ordered and installed 8,222 lighting fixtures for a total sum of US$4,901 ,893.49 between 2010 and 2013. The lighting fixtures started to fail rapidly, and Zon attempted to fix the defects while providing alternate stock to Pattison to replace the faulty lighting units. After months of trying to address the issues, Pattison hired its own expert to determine the causes of the failures. The expert identified numerous fundamental defects with the design of the fixtures and concluded that they were unfit for their intended purpose of illuminating outdoor billboards. In October 2014, after becoming aware of the fatal defects, Pattison notified Zon that it considered the defects to be a fundamental breach of the Sales Agreement and sued for a refund of the purchase price of the lighting fixtures. Zon, among other things, argued that its liability should be limited by the Limited Warranty, which would reduce the amount of damages for the defective units to US$75 per unit. Issues 1. Does the implied warranty of fitness for purpose, pursuant to the International Sale of Goods Act,7 which incorporates the CISG in BC, apply to the Sales Agreement? 2. If the warranty of fitness for purpose was an implied term of the Sales Agreement, did Pattison establish a fundamental breach of the Sales Agreement and was it entitled to recover the full purchase price? Analysis/Application The Sales Agreement did not have a choice of law provision. Since both the United States and Canada are contracting parties to the CISG, and the Sales Agreement did not exclude the CISG, the implied warranties stated in article 35 of the Convention automatically applied to the Sales Agreement. The Limited Warranty also did not explicitly oust the application of statutory warranties. Under the common law, the intention to oust statutory warranties in an exclusion clause has to be made explicit in the contract. The fitness for purpose was a term of sufficient importance to Pattison, and its breach, based on the evidence presented at trial, constituted a fundamental breach under the CISG and gave Pattison the right to treat the contract as terminated. Pattison recouped the full amount of the purchase price from Zon. So, You work for a Canadian manufacturing company CTAL that makes gas heater furnaces and exports these to the US. CTAL has entered into a major contract with RON a US home builder who installs these furnaces in new homes in the northern states. The contract is for a value of $2,000,000 CA. It was arranged by James your supervisor. James has marketing background, he assumed that Ontario Law would apply simply because the contract was signed in Toronto. Problems have arisen between CTAL and RON regarding the warranty on these furnaces. James has come to you seeking informal legal advice because here hears you are studying International Law. Problem: An article with some advices for Mr. James with INTRODUCTION BODY CONCLUSION the article can begin like writing directly to James. Example "Dear James...." . also attaching some articles, 1. https://www.ontario.ca/laws/statute/90s01 2. https://www.ontario.ca/laws/statute/90i10 3. https://www.google.com/search?q=how+old+is+canadian+entrepreneur+jim+pattison&rlz=1C1CHBF_enCA909CA909&oq=how+old+is+canadian+entrepreneur+jim+pattison+&aqs=chrome..69i57j33i160l2.21125j1j15&sourceid=chrome&ie=UTF-8