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Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller
Edition 13ISBN: 978-1133046783Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller
Edition 13ISBN: 978-1133046783 Exercise 8
CASE PROBLEM WITH SAMPLE ANSWER: Negotiability.
In September 2001, Cory Babcock and Honest Air Conditioning Heating, Inc., bought a new 2001 Chevrolet Corvette from Cox Chevrolet in Sarasota, Florida. Their retail installment sales contract (RISC) required monthly payments until $52,516.20 was paid. The RISC imposed many other conditions on the buyers and seller with respect to the payment for, and handling of, the Corvette. Cox assigned the RISC to General Motors Acceptance Corp. (GMAC). In August 2002, the buyers sold the car to Florida Auto Brokers, which agreed to pay the balance due on the RISC. The check to GMAC for this amount was dishonored for insufficient funds, however, after the vehicle's title had been forwarded. GMAC filed a suit in a Florida state court against Honest Air and Babcock, seeking $35,815.26 as damages for breach of contract. The defendants argued that the RISC was a negotiable instrument. A ruling in their favor on this point would reduce any damages due GMAC to less than the Corvette's current value. What are the requirements for an instrument to be negotiable? Does the RISC qualify? Explain. [ General Motors Acceptance Corp. v. Honest Air Conditioning Heating, Inc., 933 So.2d 34 (Fla.App. 2 Dist. 2006)]
In September 2001, Cory Babcock and Honest Air Conditioning Heating, Inc., bought a new 2001 Chevrolet Corvette from Cox Chevrolet in Sarasota, Florida. Their retail installment sales contract (RISC) required monthly payments until $52,516.20 was paid. The RISC imposed many other conditions on the buyers and seller with respect to the payment for, and handling of, the Corvette. Cox assigned the RISC to General Motors Acceptance Corp. (GMAC). In August 2002, the buyers sold the car to Florida Auto Brokers, which agreed to pay the balance due on the RISC. The check to GMAC for this amount was dishonored for insufficient funds, however, after the vehicle's title had been forwarded. GMAC filed a suit in a Florida state court against Honest Air and Babcock, seeking $35,815.26 as damages for breach of contract. The defendants argued that the RISC was a negotiable instrument. A ruling in their favor on this point would reduce any damages due GMAC to less than the Corvette's current value. What are the requirements for an instrument to be negotiable? Does the RISC qualify? Explain. [ General Motors Acceptance Corp. v. Honest Air Conditioning Heating, Inc., 933 So.2d 34 (Fla.App. 2 Dist. 2006)]
Explanation
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Negotiability:
In the case of General M...
Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller
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