Answer 3 questions.
Homework Questions 13-15 Due Week 6
Question 13
Patty, who lives in East Tennessee, developed a new type of printer that
required very little ink. As a merchant, she entered into contracts to sell the printer
to a number of merchants of office supplies in the East Tennessee area for a charge
of $600 each. She further entered into a number of contracts with merchants in
other states and also in foreign countries. For printers sold in states other than
Tennessee and for printers sold outside the U.S., she charged $1,001 each. Patty
was a trusting soul who did not require that her arrangements be in writing because
she believed that a person’s word was his or her bond. She did, however, send a
confirming memo to each client to which she received no objections. Patty
manufactured a number of printers; but unfortunately, due to a downturn in the
economy, a number of her buyers refused to proceed on their contracts, with
several claiming that the contracts were unenforceable because they were not in
writing. Are the buyers who refuse to proceed in breach of the contract? What
would be their reason for not proceeding? Does Patty have a valid claim?
Question 14
Malcolm, who runs a retail jewelry store, went to a wholesale jewelry store
with Ashley, to whom he was engaged to be married. Malcolm had no express,
written agreement with Ashley by which she was his agent. The wholesale jeweler,
Rebecca, asked Malcolm if Ashley was buying for him. Malcolm did not want to
embarrass Ashley so he nodded in agreement. A few minutes later Malcolm
whispered to Ashley, outside the hearing of the wholesaler, that she should not
make any purchases. Malcolm and Ashley had a big disagreement over money that
evening, and Ashley broke off the engagement. The next day Ashley went back to
the wholesale jeweler and purchased a string of pearls for $2,000. Ashley also
purchased a fur jacket for $3,000 from a store next door to the jewelry owned by
Harry. She told Harry that Malcolm wanted a fur jacket for a model in his store and
that Malcolm would be glad to pay Harry for the jacket.
What type of agency, if any, did Ashley have to act on behalf of Malcolm as
far as Rebecca is concerned? If Rebecca, the wholesale jeweler, sues Malcolm for
the price of the pearls what is the most likely result? What would be the most
likely result if Harry sues Malcolm for the price of the fur jacket?
Question 15
Dr. Charles Finnegan is a newly-appointed member of the Board of
Directors of Walnut Grove Community College (W.G.C.C.) in Walnut Grove,
California. The position is unpaid, but does come with the “perks” of positive
exposure and prestige in the local community.
At his first board meeting, the directors are discussing and considering for
approval service contracts between W.G.C.C. and the local business community.
The third contract for consideration is a janitorial service contract, valued at
$150,000, between W.G.C.C. and Antiseptic Andy Cleaning Service, Inc.
Finnegan is quite surprised; after all, “Antiseptic Andy” is owned and operated by
his first cousin, Andrew Deere. Cousins Finnegan and Deere have not seen each
other in three years, nor have they otherwise communicated during that period of
time.
The chairperson of the Board of Directors calls for a vote on the janitorial
service contract. According to W.G.C.C. regulations, the board must unanimously
approve contracts with the business community.
Finnegan is perplexed. If he votes and says nothing about his kinship to
Deere, he still feels he can “sleep at night,” since he will not receive any financial
gain from the contract. If he discloses his kinship to Deere, he fears that Deere’s
business opportunity will be jeopardized.
Does Finnegan have a legal obligation to disclose his relationship to Deere?
Would it be a “conflict of interest” for Finnegan to vote in favor of the contract?
Does he have an ethical obligation to disclose the relationship?
