Business law essay questions
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8questions.docx1. List three types of contracts that should definitely be in writing, and one that probably does not need to be.
2. List three provisions in a contract that would be material, and three that would not be.
3. Slimline and Distributor signed a contract providing that Distributor would use reasonable efforts to promote and sell Slimline’s diet drink. Slimline was already being sold in Warehouse Club. After the contract was signed, Distributor stopped conducting in-store demos of Slimline. It did not repackage the product as Slimline and Warehouse requested. Sales of Slimline continued to increase during the term of the contract. Slimline sued Distributor, alleging a violation of the agreement. Who should win?
4. YOU BE THE JUDGE WRITING PROBLEM Chip bought an insurance policy on his house from Insurance Co. The policy covered damage from fire but explicitly excluded coverage for harm caused “by or through an earthquake.” When an earthquake struck, Chip’s house suffered no fire damage, but the earthquake caused a building some blocks away to catch on fire. That fire ultimately spread to Chip’s house, burning it down. Is Insurance Co. liable to Chip? Argument for Insurance Co.: The policy could not have been clearer or more explicit. If there had been no earthquake, Chip’s house would still be standing. The policy does not cover his loss. Argument for Chip: His house was not damaged by an earthquake; it burned down. The policy covered fire damage. If a contract is ambiguous, it must be interpreted against the drafter of the contract.
5. The Massachusetts Bay Transit Authority (MBTA) awarded the Perini Corp. a large contract to rehabilitate a section of railroad tracks. The work involved undercutting the existing track, removing the ballast and foundation, rebuilding the track, and disposing of the old material. Perini solicited an offer from Atlantic Track & Turnout Co. for Atlantic to buy whatever salvageable material Perini removed. Perini estimated the quantity of salvageable material that would be available. Atlantic offered to purchase “all available” material over the course of Perini’s deal with the MBTA, and Perini accepted. But three months into the project, the MBTA ran short of money and told Perini to stop the undercutting part of the project. That was the work that made Perini its profit, so Perini requested that the MBTA terminate the agreement, which the agency did. By that point Perini had delivered to Atlantic only about 15 percent of the salvageable material that it had estimated. Atlantic sued. What kind of contract do the parties have? Who should win and why?
6. Nina owns a used car lot. She signs and sends a fax to Seth, a used car wholesaler who has a huge lot of cars in the same city. The fax says, “Confirming our agrmt—I pick any 15 cars fr yr lot—30% below blue book.” Seth reads the fax, laughs, and throws it away. Two weeks later, Nina arrives and demands to purchase 15 of Seth’s cars. Is he obligated to sell?
7. The Brugger Corp. owned a farm, operated by Jason Weimer, who acted as the company’s business agent. Tri-Circle, Inc., was a farm equipment company. On behalf of Brugger, Weimer offered to buy from Tri-Circle certain equipment for use on the farm. Tri-Circle accepted the offer, using a pre-printed form. The form included a finance charge for late payment. Weimer’s offer had said nothing about finance charges, but he made no objection to the new term. Tri-Circle supplied the farm equipment but later alleged that Brugger had refused to pay for $12,000 worth of the supplies. Tri-Circle sued. In deciding whether Tri-Circle was entitled to finance charges, the court first inquired whether Brugger, Weimer, and Tri-Circle were merchants. Why did it look into that issue? Were they merchants?
