Jackson and Mike enter into a contract in terms of which Jackson undertakes to supply and install certain equipment for refrigeration purposes in a fishing vessel owned by Mike. The equipment is guaranteed against defective workmanship and material for a period of twelve months. Three weeks after the installation of the equipment, the equipment malfunctions and cannot be repaired by Jackson. Mike cancels the contract and tenders to return certain items supplied by Jackson in their present condition. Mike is unable to tender the return of the balance of the materials, because these were lost at sea when the vessel sank during a storm. Which ONE of the following statements is CORRECT?

Question

Answer

Mike is entitled to cancel the contract and claim back part of the money that he paid for the equipment, in proportion to the part of the equipment that he is able to return.

Answer

Since restitution is still possible, Mike is not entitled to cancel the contract, but can only claim a reduction in the price of the equipment.

Answer

Mike does not have to tender return of all the equipment before he can claim the money he paid to Jackson, because it was not Mike's fault that part of the equipment was lost at sea.

Answer

Mike is not entitled to cancel the contract and claim back the money that he paid for the equipment, because he is unable to return all the equipment to Jackson.

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Jackson and Mike enter into a contract in terms of which Jackson undertakes to s...

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