THE LEGAL ENVIRONMENT DIMENSION How could Norwest and the bank have avoided the problem that arose in this case?

THE ETHICAL DIMENSION Why should the Millers be held responsible for a statement that Norwest made in the retail installment contract, which said the boat had been accepted by the Millers?

The Millers wanted to buy a boat from Norwest Marine, so they made a deposit and signed a form contract. Title and ownership were to pass when the Millers made full payment, although delivery would occur earlier. The agreement stated that the Millers had inspected and accepted the boat and that the document constituted the entire agreement between the parties. The Millers needed financing and contacted First National Bank of Litchfield to begin the loan process. The Millers signed a loan agreement with the bank, which sent Norwest full payment for the boat. When the Millers took delivery of the boat, it did not run properly, so they returned it to Norwest for repairs. After the repairs were completed, the Millers refused to accept the boat, claiming that it was not satisfactory. They told the bank that they did not want the boat, and they stopped making loan payments. The bank sued, contending that the Millers had breached the retail contract by refusing to make monthly payments. The Millers filed claims against the bank and Norwest asserting that they had committed fraud. The trial court held for the bank, awarding it the full amount owed under the loan contract, plus attorneys’ fees. The Millers appealed, and the appellate court reversed and remanded.

The case was certified to the state’s highest court for review.