Exam 19: Business Law

Rob Smythe collects antique furniture and has been looking for a specific piece to complete a set. He found the furniture at a yard sale at Rob Bibb's house. Smythe told Bibb that he had been looking for that specific piece for several years. He offered $300, which Bibb thought was a very good price. Bibb agreed to sell. Smythe then gave Bibb a significant down payment to hold the furniture until he could pick it up. However, before Smythe could pick up the furniture from Bibb, another buyer offered him an even better deal. Bibb informed Smythe of his intention to sell to the other buyer and offered to return the down payment. Smythe informed him he really wanted the furniture and would sue if necessary. If he does so, Smythe will most likely ask the courts to remedy the breach of contract by ordering specific performance.

In the sale of a good, which of the following passes from one party to another in exchange for a price?

The law with respect to the sale of goods is a specialized branch under which of the following?

Back in 1998, Barb Berenger agreed to sell her 1963 Corvette, which she stated was in "mint condition," to Tyler Burgess for $47,000. After they agreed upon the price, the transfer of title, and other details, Barb and Tyler met at a notary and finalized the sale. Soon after taking possession of the car, Tyler realized that there were several cosmetic problems with the car that Barb did not originally disclose. Tyler intended to take Barb to court to seek monetary payments to cover his costs to restore the car to the desired condition. However, he got busy with other matters and kept putting things off. Now, several years later, he is finally ready to take legal action. What is one problem Tyler may face?

Consideration: Both parties must provide something of value.3) Legal capacity: Both parties must have the ability to understand the nature of the agreement.4) Legal purpose: The courts will not enforce a contract that has an illegal purpose.In addition to these characteristics, certain types of contracts, such as those that will take more than a year to complete or those involving the sale of goods worth more than $500, must be in writing.A breach of contract occurs if one of the parties does not live up to the terms of the agreement. When one party breaches a contract, the other party can sue in a civil court. If the court agrees that a party breached the contract, it orders some type of remedy. The most common remedy is compensatory damages, or money the party who breached the contract must pay to the injured party to compensate for the actual harm suffered. In cases where the contract calls for the sale of a unique good, the courts may apply a remedy known as specific performance, which requires the party who breached the contract to do exactly what the contract says. Finally, the courts may issue injunctions (court orders) that prevent the party who breached the contract from taking some action.

When a contract involves the sale of a unique item that the injured party could not obtain from anyone but the other party to the contract, the courts are most likely to apply the remedy of which of the following?

There are only three requirements for a valid contract: it must be a voluntary agreement, at least one of the parties must offer something of value, and the terms of the contract must be stipulated in writing.

Which of the following best describes contracts?

A tort is a private wrong that results in physical or mental harm to an individual or damage to that person's property.

What type of authority is based on the law's recognition that agents must have the authority to act in certain ways in order to perform their duties, even if the principal does not explicitly provide this authority?

The same wrongful behaviour can result in both civil and criminal trials.

Principals are obligated to compensate agents in a timely manner and to reimburse agents for reasonable expenses incurred while acting for the principal.

What is "mutual assent"?

Describe the characteristics of a contract and explain how the terms of contracts are enforced.

Scope of authority for an agent is the extent to which an agent has the authority to act for and represent the principal.

When a loan officer grants a loan to a borrower on behalf of the bank, what is he or she acting as?

The period of protection for a creator's creative work like a play, song, painting, or book lasts for the remainder of the creator's life plus an additional 100 years after his or her death.

When contracts don't spell out the conditions that determine when exactly the title to goods changes hands, they aren't binding agreements between the buyer and the seller.

Civil law deals with disputes between private citizens. These disputes are settled in the courts when one of the parties initiates a lawsuit against the other. Common types of cases brought before civil courts involve breach of contract, negligence, or willful acts that cause harm.

Tim Tullio acts as a principal for his firm when he makes sales calls to secure contracts for the testing services that his firm provides.