7/24/2019 Business Law Exam 2 Answers

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Business Law Exam 2 Answers

1. Typically, a court would not impose sanctions over minor issues.To constitute a violation of the con-tract, the reach must ematerial. A material reach is important enou!h to defeat an

essential pur-pose of the contract.2. a" Title

" #ntroductory $ara!raphc" %e&nitionsd" 'ovenantse" 'onditionsf" (epresentations and )arranties!" (emediesh" Boilerplate

*. $roaly. +hrimp is a !ood, and therefore this contract is!overned y Article 2 of the ''. The statute of frauds reuires

a!reements for the sale of !oods with a purchase price /0 ormore to e in writin! with the defendants si!nature.

4. #ne3 will lose under oth implied warranties. The impliedwarranty of merchantaility was not reached ecause thefurnace was operatin! accordin! the standards of the heatin!industry. The implied warranty of &tness was li4ewise notreached. This warranty reuires the seller to 4now of theuyers particular purpose and that the uyer is relyin! on thesellers s4ill or 5ud!ment in recommendin! a particular product.6ere #ne3 did not as4 for or receive any su!!estions from theseller or the sellers expert

5. The '' imposes a duty of !ood faith in the performance of allcontracts. The '' freuently holds a merchant to a hi!herstandard of conduct than a non-merchant. A merchant issomeone who routinely deals in the particular !oods involved, orwho appears to have special 4nowled!e or s4ill in those !oods, orwho uses a!ents with special 4nowled!e or s4ill in those !oods.7orley 7otors is a merchant when it comes to sellin! autosecause it routinely deals in cars. 8or a merchant, !ood faithmeans honesty in fact plus the exercise of reasonalecommercial standards of fair dealin!. $atsy is not a merchant incars and would ehold to a lower standard of conduct. 8or non-

merchants, !ood faith means honesty in fact. Thus, whenperformin! the sales contract, neither $atsy nor 7orley 7otorsmay lie or mislead the other party

6. 9A" nder the '', the parties will have an a!reement since theyintended to create a contract.9B" The payment term in theacceptance is a di:erent term. #n the ma5ority of states, di:erentterms cancel each other out. #n decidin! the payment term, thecourt will loo4 to enforce an oral a!reement if one exists.

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;therwise, the court loo4s to the !ap-&ller provision concernin!payment. 9'" The aritration clause is an additional term. nderthe '', since the parties are merchants, the aritration clausewill e part of the contract unless< 91" the o:er insisted on itsown terms= 92" the additional terms materially alter the terms of

the o:er= or 9*" the o:er or promptly re5ects the additional terms7. Identification means the parties have designated the specific goods to be

sold. Identification is important because goods must be identified to the

contract before title can pass. Identification must also occur before a buyer

obtains an insurable interest in the goods. The parties may agree in their

contract how and when the goods will be identified, and they may identify

them to the contract however they wish. If the parties do not specify,

however, identification will take place following the rules set forth in UCC

Section 2-501. These rules include: (a) If the contract describes specific

goods that already exist, identification occurs when the parties enter intothe contract. (b) For unborn animals, identification ordinarily takes place

when they are conceived. For crops, identification ordinarily occurs when

they are planted. (c) For other goods, identification occurs when the seller

marks, ships, or in another way designates the exact goods going to the

buyer.8. #f the supplier will not provide paint that matches the sample in

uality, +onny can sue the supplier for reach of an expresswarranty. The '' estalishes that the seller may create anexpress warranty in three ways< with an a>rmation of fact or a

promise, with a description of the !oods, or with a sample ormodel. A seller who uses a sample is !enerally warrantin! thatthe merchandise sold will e 5ust as !ood. +onny mustdemonstrate that the sample provided was the asis of thear!ain

9. Any affirmation of fact, or any promise, can create an express warranty. An

affirmation of fact is a statement about the nature or the quality of the goods. A

statement indicating the sellers opinion or a statement of sales puffery does not

create a warranty. A statement is more likely to be an affirmation of fact if: (a) it is

specific and can be proven true or false; (b) it is written; (c) defects are not obvious;

and (d) the seller has greater expertise than the buyer10. A!reements reuirin! a writin! within the statute of frauds

include< 9a" a!reements for the sale of any interest in land,su5ect to certain exceptions= 9" a!reements that cannot eperformed within one year from the date of the a!reement= 9c" apromise to pay the det of another, su5ect to the leadin! o5ectrule exception= 9d" a promise made y an executor of an estateto use his personal funds to pay a det of the decedent= 9e" a

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promise made in consideration of marria!e= and 9f" a contract forthe sale of !oods worth /0 or more. #f the a!reement does nothave writin! su>cient to satisfy the statute of frauds, it isunenforceale, ut not void or ille!al. The parties may stillchoose to perform the contract.

11. This type of clause is known as a liquidated damages clause. Generally this type ofclause will be enforced if, at the time of creating the contract, it was very difficult to

estimate actual damages, and the liquidated amount is reasonable. In this case, if the

total construction contract involved millions of dollars, the estimate of damages may

reasonably amount to a $1000 per day. If the construction project is a small one, the

court may see this amount as too much and not enforce the clause.

12.

An injunction is a court order that requires someone to do something or to refrainfrom doing something. Injunctions are equitable remedies, usually stated in the

negative. They are frequently granted to employers to block employees from leaving

to work somewhere else. Injunctions may be preliminary, which are issued early in a

lawsuit to prohibit a party from doing someething during the lawsuit. Such injunctions

are issued to protect the plaintiffs interests immediately. If, after the trial, it appears

that the plaintiff is entitled to an injunction, the court will make its order a permanent

injunction.