Alfred Smith (defendant) signed a purchase order for a new car from Zabriskie Chevrolet, Inc. (Zabriskie) (plaintiff) and provided a deposit of $124. On February 9, 1967, Smith provided Zabriskie with a check for the remaining purchase price. On February 10, 1967, Smith’s wife picked up the car from Zabriskie. Less than a mile from the dealership, the car suffered a mechanical failure and became nearly inoperable. Smith immediately stopped payment on his check and notified Zabriskie that the sale was cancelled. Zabriskie retrieved the car and discovered that the transmission was defective. Zabriskie replaced the transmission with another transmission that was removed from a vehicle on Zabriskie’s showroom floor. Smith refused to accept delivery of the car as repaired and reasserted that the sale was cancelled. Smith then began negotiating for a different new car with Zabriskie. Zabriskie sued Smith for the balance of the purchase price of the original car, and Smith counterclaimed for the return of his deposit.