ACCT 635: Business Law, Ethics and Governance

Chap. 10 problems: Do Problems 1-5, 7-8, 10-11, 13-14 and "Taking Sides")

QUESTION 1

Ames, seeking business for his lawn maintenance firm, posted the following notice in the meeting room of the Antlers, a local lodge: "To the members of the Antlers Special this month. I will resod your lawn for two dollars per square foot using Fairway brand sod. This offer expires July 15." The notice also included Ames's name, address, and signature, and specified that the acceptance was to be in writing. Bates, a member of the Antlers, and Cramer, the janitor, read the notice and became interested. Bates wrote a letter to Ames saying he would accept the offer if Ames would use Putting Green brand sod. Ames received this letter July 14 and wrote to Bates saying he would not use Putting Green sod. Bates received Ames's letter on July 16 and promptly wrote Ames that he would accept Fair- way sod. Cramer wrote to Ames on July 10, saying he accepted Ames's offer. By July 15, Ames had found more profitable ventures and refused to resod either lawn at the specified price. Bates and Cramer brought an appropriate action against Ames for breach of contract. What are the Decisions as to the respective claims of Bates and Cramer?

QUESTION 5

On November 15, I. Select, a manufacturer of crystal ware, mailed to Benny Buyer a letter stating that sell it would sell to Buyer one hundred crystal "A" goblets at $100 per goblet and that "the offer would remain open for fifteen (15) days." On November 18, sell it, noticing the sudden rise in the price of crystal "A" goblets, decided to withdraw her offer to Buyer and so notified Buyer. Buyer chose to ignore Sell its letter of revocation and gleefully watched as the price of crystal "A" goblets continued to skyrocket. On November 30, Buyer mailed to sell it a letter accepting Sell its offer to sell the goblets. The letter was received by Sell it on December 4. Buyer demands delivery of the goblets. What result?

QUESTION 7

Rowe advertised in newspapers of wide circulation and otherwise made known that she would pay $ 5,000for acomplete set consisting often volumes of certain rare books. Ford, not knowing of the offer, gave Rowe all but one of the set of rare books as aChristmas present. Ford later learned of the offer, obtained the one remaining book, tendered it toRowe, and demanded the $ 5,000. Rowe refused to pay. Is Ford entitled to the $5,000?

QUESTION #8.

Scott a manufacturer of a carbonated beverage, entered into a contract with Otis, owner of a baseball park, whereby Otis rented to Scott a large signboard on top of the center field wall. The contract provided that Otis should letter the sign as Scott desired and would change the lettering from time to time within 48 hours after receipt of written request from Scott.

As directed by Scott, the signboard originally stated in large letters that Scott would pay $1,000 to any ballplayer hitting a home run over the sign. In the first game of the season, Hume, the best hitter in the league, hit one home run over the sign.

Scott immediately served written notice on Otis instructing Otis to replace the offer on the signboard with an offer to pay $500 to every pitcher who pitched a no-hit game in the park.

A week after receipt of Scott's letter, Otis had notchanged the wording on the sign. On that day, Perry, a pitcher for a scheduled game, pitched ano-hit game while Todd, one of his teammates, hit a home run over Scott's sign. Scott refuses to pay any of the 3 players. What are the rights of Scott, Hume, Perry, and Todd?

QUESTION 10

Small, admiring Jasper's watch, asked Jasper where and at what price he had purchased it. Jasper replied, "I bought it at West Watch Shop about two years ago for around $85, but I am not certain as to that." Small then said, "Those fellows at West are good people and always sell good watches. I will buy that watch from you. "Jasper replied, "It's a deal." The next morning Small telephoned Jasper and said he had changed his mind and did not wish to buy the watch. Jasper sued Small for breach of contract. In defense, Small has pleaded that he made no enforceable contract with Jasper (a) because the parties did not agree on the price to be paid for the watch and (b) because the parties did not agree on the place and time of delivery of the watch to Small. Are either or both of these defenses good? Explain

QUESTION 11

Jeff says to Brenda, "I offer to sell you my PC for $900."Brenda replies, "If you do not hear otherwise from me by Thursday, I have accepted your offer." Jeff agrees and does not hear from Brenda by Thursday. Does a contract exist between Jeff and Brenda? Explain

QUESTION 13.

Walker leased a small lot to Keith for ten years at $1,000a month, with a right for Keith to extend the lease for another ten-year term under the same terms except as torrent.

The renewal option provided:

Rental will be fixed in such amount as shall actually be agreed upon by the lessors and the lessee with the monthly rental fixed on the comparative basis of rental values as of the date of the renewal with rental values at this time reflected by the comparative business conditions of the two periods. Keith sought to exercise the renewal right and, when the parties were unable to agree on the rent, brought suit against Walker. Who prevails? Why?

QUESTION 14.

The Brewers contracted to purchase Dower House from McAfee.

Then, several weeks before the May 7 settlement date for the purchase of the house, the two parties began to negotiate for the sale of certain items of furniture in the house.

On April 30, McAfee sent the brewers a letter containing a list of the furnishings to be purchased at specified prices; a payment schedule, including a request for a $3,000 payment, due on acceptance; and a clause reading, "If the above is satisfactory, please sign and return one copy with the first payment. "On June 3, the Brewers sent a letter to McAfee stating that enclosed was a $3,000 check, that the original con-tract had been misplaced and could another be furnished, that they planned to move into Dower House on June 12,and that they wished the red desk to be included in the contract. McAfee then sent a letter dated June 8 to the Brewers, listing the items of furniture purchased.

The Brewers moved into Dower House in the middle of June. Soon after they moved in, they tried to contact McAfee at his office to tell him that there had been a misunderstanding relating to their purchase of the listed items. They then refused to pay him any more money, and he brought action to recover the balance outstanding. Will McAfee be able to collect the additional money from the Brewers? Why or why not