Business Law – Answer Questions With Your Own Words

Answer Questions With Your Own Words

1. Question 8.) Under an oral agreement, Hyer rented from Bateman a vacant lot for a filling station.  Hyer placed on the lot a lightly constructed building bolted to a concrete slab and several storage tanks laid on the ground in a shallow excavation. Later, Hyer prepared a lease which contained a provision allowing him to remove the equipment at the termination of the lease. This lease was not executed, having been rejected by Bateman due to a renewal clause it contained.  Several years later, another lease was prepared, which both Hyer and Bateman did sign. This lease did not mention removal of the equipment. At the termination of this lease, Hyer removed the equipment, and Bateman brought an action to recover possession of the equipment. Please discuss what the judgment would be and explain why.

 

2. Question 10.) John Swan rented a safe deposit box at the Tenth Citizens Bank of Emanon, State of X. On December 17, 2011, Swan went to the bank with stock certificates to place in the safe deposit box. After he was admitted to the vault and had placed the stock certificates in the box, Swan found lying on a chair in the privacy booth of the vault a $5,000 negotiable bearer bond issued by the State of Wisconsin with coupons attached, due June 30, 2018. Swan picked up the bond and, observing that it did not carry the name of the owner, left the vault and went to the office of the president of the bank. He told the president what had occurred and delivered the bond to the president only after obtaining his promise that, should the owner not call for the bond or become known to the bank by June 30, 2012, the bank would redeliver the bond to Swan. On July 1, 2012, Swan learned that the owner of the bond had not called for it, nor was his identity known to the bank. Swan then asked that the bond be returned to him. The bank refused, stating that it would continue to hold the bond until the owner claimed it. Explain whether Swan will prevail in his action to recover possession of the bond.

 

3. Question 15.) Hines stored her furniture, including a grand piano, in Arnett’s warehouse. Needing more space, Arnett stored Hines’s piano in Butler’s warehouse next door. As a result of a fire, which occurred without any fault of Arnett or Butler, both warehouses and their contents were destroyed. Is Arnett liable to Hines for the value of her piano and furniture? Please explain.

 

4. Question 27.) Mr. Sewall left his car in a parking lot owned by Fitz-Inn Auto Parks, Inc. The lot was approximately 100 by 200 feet in size and had a chain link fence along the rear boundary to separate the lot from a facility of the Massachusetts Bay Transportation Authority. Although the normal entrance and exit were located at the front of the lot, it was also possible to leave by way of small side streets on either side of the lot. Upon entering the lot, the driver would pay the attendant on duty a fee of $5 to park. The attendant’s duties were limited to collecting money from patrons and directing them to parking spaces. Ordinarily, the attendant remained on duty until 11:00 a.m., after which time the lot was left unattended. Furthermore, a patron could remove his car from the lot at any time without interference by any employee of the parking lot.

 

Chapter 21

 

 

5. Question 9.) While adjusting a television antenna beside his mobile home and underneath a high-voltage electric transmission wire, Prince received an electric shock resulting in personal injury. He claims the high-voltage electric current jumped from the transmission wire to the antenna. The wire, which carried some 7,200 volts of electricity, did not serve his mobile home but ran directly above it. Prince sued the Navarro County Electric Co-Op, the owner and operator of the wire, for breach of implied warranty of merchantability under the Uniform Commercial Code. He contends that the Code’s implied warranty of merchantability extends to the container of a product—in this instance, the wiring—and that the escape of the current shows that the wiring was unfit for its purpose of transporting electricity. The electric company argues that the electricity passing through the transmission wire was not being sold to Prince and that, therefore, there was no sale of goods to Prince. Is the contract covered by the Code? Please explain.

 

 

6. Question 12.) American Sand & Gravel, Inc., agreed to sell sand to Clark at a special discount if 20,000–25,000 tons were ordered. The discount price was $0.45 per ton, compared with the normal price of $0.55 per ton. Two years later, Clark orders, and receives, 1,600 tons of sand from American Sand & Gravel. Clark refuses to pay more than $0.45 per ton. American Sand & Gravel sues for the remaining $0.10 per ton. Decision, and please explain?

 

 

7. Question 15.) Dorton, as a representative for The Carpet Mart, purchased carpets from Collins & Aikman that were supposedly manufactured of 100 percent Kodel polyester fiber but were, in fact, made of cheaper and inferior fibers. Dorton then brought suit for compensatory and punitive damages against Collins & Aikman for its fraud, deceit, and misrepresentation in the sale of the carpets. Collins & Aikman moved for a stay pending arbitration, claiming that Dorton was bound to an arbitration agreement printed on the reverse side of Collins & Aikman’s printed sales acknowledgment form. A provision printed on the face of the acknowledgment form stated that its acceptance was “subject to all of the terms and conditions on the face and reverse side thereof, including arbitration, all of which are accepted by buyer.” Is the arbitration clause enforceable?

 

 

 

8. Question 17.) Due to high gasoline prices, American Bakeries Company (ABC) considered converting its fleet of over 3,000 vehicles to a much less expensive propane fuel system. After negotiations with Empire Gas Corporation (Empire), ABC signed a contract for approximately three thousand converter units, “more or less depending upon requirements of Buyer,” as well as agreeing to buy all propane to be used for four years from Empire. Without giving any reasons, however, ABC never ordered any converter units or propane from Empire, having apparently decided not to convert its vehicles. Empire brought suit against ABC for $3,254,963, representing lost profits on 2,242 converter units and the propane that would have been consumed during the contract period.  Is ABC liable? Please explain.

 

Chapter 22

 

 

9. Question 10.) In April F.W. Lang Company (Lang) purchased an ice cream freezer and refrigeration compressor unit from Fleet for $2,160. Although the parties agreed to a written installment contract providing for an $850 down payment and eighteen installment payments, Lang made only one $200 payment upon receipt of the goods. One year later, Lang moved to a new location and took the equipment along without notifying Fleet. Then, in May or June of the following year, Lang disconnected the compressor from the freezer and used it to operate an air conditioner. Lang continued to use the compressor for that purpose until the sheriff seized the equipment and returned it to Fleet pursuant to a court order. Fleet then sold the equipment for $500 in what both parties conceded was a fair sale. Lang then brought an action charging that the equipment was defective and unusable for its intended purpose and sought to recover the down payment and expenses incurred in repairing the equipment. Fleet counterclaimed for the balance due under the installment contract less the proceeds from the sale. Who will prevail? Please explain.

 

 

10. Question 16.) Fredrick Manufacturing Corporation ordered 500 dozen units of Import Traders’ rubber pads for $2,580. The order indicated that the pads should be “as soft as possible.” Import Traders delivered the rubber pads to Frederick Manufacturing on November 19. Frederick failed to inspect the goods upon delivery, even though the parties recognized that there might be a problem with the softness. Frederick finally complained about the nonconformity of the pads in April of the following year, when Import Traders requested the contract price for the goods. Can Import Traders recover the contract price from Frederick? Please explain.