P. 1
Business Law 2301-Assgmnt 2

Business Law 2301-Assgmnt 2

|Views: 933|Likes:
Published by Dante Guevara

More info:

Published by: Dante Guevara on Feb 24, 2012
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less





Dante Guevara Business Law 2301 Student ID: 15xxxxx Assignment # 2 Case 12.2 I. Statement of Facts A. Charles E.

Smith, a minor purchased a car from Bobby Floars Toyota. He engaged in a security agreement to finance part of the balance due on the purchase price, agreeing to pay off the balance in 30 months. B. After Smith turned 18, the age of majority in his state, he made payments for 10 months, and then he decided to disagree with the contract and stopped making payments. C. Smith declared that he may disaffirm the contract made when he was a minor. Toyota argues that smith ratified the contract since attaining the age of majority. II. Decision (Who is correct?) A. Bobby Floars Toyota III. Rule of Law A. If a minor does not disaffirm a contract either during the period of minority or within a reasonable time after reaching the age of majority, the contract is considered ratified. B. Smith validated the contract by paying 10 consecutive months after turning 18 years of age. Contract is enforceable. Case 12.3 I. Statement of Facts A. Manzelle Johnson, an adjudicated insane person, executed a quitclaim and warranty deed transferring her real estate to her guardian at that time, Obbie Neal. B. The guardian then transferred the real estate to James R. Beavers by warranty deed. C. The present guardian, Charles L. Weatherly, demanded a decree by the court that title to the real estate be restored to Johnson for her inability to contract.

II. A. Yes III. Rule of Law

Decision (Should Johnson be allowed to void the contract?)

A. Any contract entered by a person who has been adjudged insane is void. That is no contract exists.
B. Consequently, the deed from the guardian conveys no title and Mrs. Johnson

should be allowed to void the contract. Case 13.4 I. Statement of Facts A. Robert McClure listed his vehicle salvage and rebuilding business for sale and had a brochure printed describing the business income grossed $581.117 and netted $142,727 the prior year. B. Fred H. Campbell got interested in buying the business and hired a CPA to review McClure’s business records and tax returns, but the CPA could not reconcile them with the income claimed for the business in the brochure. Campbell notified McClure of this discrepancy and the second stated that the business records did, but tax returns did not reflect the real cash flow or profits of the business because in such a high cash operation much of the cash was not reported to the IRS on tax returns. McClure signed a warranty stating that what was portrayed in the brochure was accurate C. Campbell bought the business based on McClure’s representations. However, the business did not perform as represented even after was operated in the same substantial way as the former owner an evidence showed that McClure overstated the business income. Campbell sued McClure for damages for fraud. II. Decision (Who wins?) A. Fred H. Campbell III. Rule of Law
A. A material misrepresentation of fact occurred when McClure, knowingly that the

gross income stated in the brochure was overstated; Campbell relied upon the warranty of the sales brochure's accuracy as a material inducement to enter into the purchase

B. McClure intended to deceive Campbell. Campbell relied on the misrepresentation and the innocent party was injured. Fraud was committed. Case 14.7 I. Statement of Facts A. Gary A. Solondz, a New York resident, made several purchases from Atlantic Wholesale Co., Inc., located in Florence, SC. which was in the business of buying and selling gold and silver. B. One day, Solondz called Atlantic and received a quotation on silver bullion and he bought 300 ounces of silver for a total of $12,978. Atlantic purchased the silver for Solondz from United Precious Metals in Minneapolis and had it shipped to Atlantic, which paid for it. Atlantic kept the silver in its vault while it waited for payment from Solondz. When Solondz was asked for the payment, he told Atlantic to hold the silver in its vault until he decided whether to sell it. In the meantime, the price of silver fell. C. When Solonz refused to pay for the silver, Atlantic sold it for $4,650, getting a loss of $8,328. Atlantic sued Solondz to recover the loss, and Solondz alleged that the Statute of Frauds prevented enforcement of his oral promise to buy the silver. II. Decision (Does the doctrine of promissory estoppel prevent the application of the Statute of Frauds in this case) A. Yes III. Rule of Law A. Under the doctrine of promissory estoppel, an oral promise is enforceable against the promisor if (1) the promise induces action or forbearance of action by another, (2) the reliance on the oral promise was foreseeable, and (3) injustice can be avoided only by enforcing the oral promise. B. Solondz purchased the silver on the phone and based on that Atlantic made a contract with another vendor to have the goods available to the buyer. Where this doctrine applies, the promisor is prevented from raising the Statute of Frauds as a defense to the enforcement of the oral contract. Case 15.7 I. Statement of Facts

A. Shumann Investments, Inc. hired Pace Construction Corporation, a general contractor, to build “Outlet World of Pasco Country.” For this building, Pace hired a subcontractor OBS Company, Inc. to perform the framing, drywall, insulation, and stucco work on the project. B. The contract between Pace and OBS stipulated: ”final payment shall not become due unless and until the following conditions precedent to final payment have been satisfied… (c) receipt of final payment for subcontractor’s work by contractor from owner.” C. When Shumann refused to pay Pace, Pace refused to pay OBS. OBS sued Pace to recover payment. II. Decision (Who wins?) A. Pace Construction Corporation III. Rule of Law
A. The contract stipulated a condition to the subcontractor, which excuses the

performance. It clearly required payment from Shumann to Pace as a condition precedent to final payment becoming due to OBS. B. The event, Shumann’s payment to Pace, did not occur, no duty to perform the contract arises because there is a failure of condition. Case 16.5 I. Statement of Facts A. Ptarmigan Investment Company, a partnership, entered into a contract with Gundersons, Inc. a corporation from South Dakota, which is in the business of golf course construction. The contract provided that Gundersons would construct a golf course for $1,294,129 to Ptarmigan. B. Three months later, Gundersons has completed about one-third of the work. Due to bad weather most of the work came to a halt. Ptarmigan paid Gundersons for the work to that date. C. By spring, Ptarmigan ran out of funds and was unable to pay for the completion of the golf course. Gundersons sue Ptarmigan and its individual partners to recover the lost profits that it would have made on the remaining two-thirds of the contract. II. Decision (Can Gundersons recover this lost profits as damages?)

A. Yes III. Rule of Law A. Compensatory damages are intended to place the non-breaching party in the same position as if the contract had been fully performed by restoring the benefit of the bargain. B. A contractor is entitled to recover from a breaching defendant damages sufficient to place it in the position in which it would have been had the breach not occurred. Case 47.2 I. Statement of Facts A. The Smith brothers, Danny Lee and Jeffrey Allen, found a 16-foot fiberglass boat lying beside the roadway in Mobile County, Alabama. B. The brothers asked two sheriff’s deputies about the ownership of the boat. The deputies impounded the boats against the Smiths objections. The Smiths made clear that if the true owner was not found, they wanted the boat. C. The true owner never appeared. Mobile County claimed the boat and wanted to auction it off for sale to raise money for county recreational programs. The Smiths claimed the boat as finders and the state did not have an estray statute that applied to the situation. II. Decision (Who gets the boat?) A. The Smith brothers III. Rule of Law
A. The finder obtains title to a property against the whole world except the true

owner. Most states estray laws permit a finder of lost property to clear title if a specified amount of time has passed without the rightful owner’s reclaiming the property and the finder reports what was found to the proper government agency. B. The Smiths are entitled to keep it, unless the true owner appears and demands the same. Case 48.4 I. Statement of Facts

A. Verna M. Chappell owned a piece of real property. On June 16, 1965, Chappell transferred property to herself and her niece, Bertha M. Stewart, as joint tenants. B. When Chappell died in 1981, Chappell’s gross estate was set at $28,321, which included the value of the house. Claims, debts, and charges against the estate totaled $19,451, which included a $14,040 claim by Lorna M. Rembe for services provided as conservator. C. The probate assets available to pay the claims and debts came to only $1,571 if the real property went to Stewart as the joint tenant. Rembe sued, alleging that the value of the real property should be used to pay off Chappell’s debts and claims. II. Decision (Who wins?) A. Bertha M. Stewart III. Rule of Law
A. The joint tenancy right provides that if any one of the joint tenants dies, the

remainder of the property is transferred to the joint survivors. B. An advantage of joint tenancy directly attributable to the peculiar operation of the survivorship right is the potentiality for avoiding creditors' claims. Neither of the claims, debts and charges of a deceased joint tenant can reach the joint tenancy property in the hands of the survivor unless a severance of the tenancy was affected before the debtor joint tenant's demise.

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->