Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Contracts
Don Willetts and his wife Dana began visiting the Sunday School class you teach in New Bern, NC, about 3 months ago. Don is not a Christian, but, with the encouragement of his wife who is a Christian, he says he is beginning to explore the faith.
After his first visit to the class, you spent some time talking with Don. You discovered that he owns a small, local health food products business and that he is interested in growing the business by adding some new product lines. You informed him of the high anti-oxidant qualities of the Scuppernong grapes your family produces company sells, and you asked him if he might be interested in promoting either the grapes themselves or the various products and pills developed using their seeds. Don was interested, and, a few days later, you supplied him with some samples. The samples turned out to be a very popular item with his regular customers, so he placed a modest phone order with your company. Over time, Don placed regular, increasing phone orders, and he began investing heavily in advertising for the Scuppernong products at his store. Your company has faithfully delivered everything requested, promptly, and at consistent prices. You typically sent an invoice with each delivery, requiring payment within 30 days, and, though Don had frequently been late making payment, he had generally paid each invoice within 45 to 60 days. You had elected not to charge him any interest or penalties though your invoices state that you reserve the right to do so.
On one occasion when your 17-year-old son, a part-time deliveryman for your company, delivered some product to Don's store, Don handed your son a requirements contract and asked him to sign it on behalf of your company. The contract included a guaranteed price schedule consistent with what he had been paying. Don told him that it was "just a formality" to guarantee a continuing business relationship. Your son signed the contract and gave it back to Don. Neither Don nor your son mentioned the contract to you.
After a columnist for the New York Times wrote an article praising the anti-oxidant qualities of Scuppernongs, the demand for Scuppernongs skyrocketed nationwide. Your company became inundated with orders, far in excess of your ability to meet the demand. A company in Connecticut offered to pay you twice the going rate for your products, but the company also required you to sign an output contract as a part of the deal.
Though this contract would represent a substantial financial windfall for your company, you felt bad about potentially leaving Don out to dry. You called Don, advised him of the offer you had received, and, to try and soften the blow, you suggested to him the names of other reputable potential suppliers in the area.
To your surprise, Don became very angry and told you that he expected you to continue to supply him with all the product he needed, when he needed it, and at the prices he had always paid per the requirements contract between your businesses as well as in accord with an implied duty of good faith and fair dealing that had evolved based on your ongoing business relationship. When you asked what requirements contract he was talking about, he faxed you a copy of the contract that had been signed by your son.
Your assignment:
Looking at the situation from both a legal and spiritual perspective:
1. What should you do about continuing to do business with Don?
2. If you elect to stop doing business with Don, what legal causes of action might he bring against your company, what damages or remedies might he seek, and what legal defenses might your company have?
In connection with this assignment you may want to research the following legal concepts and incorporate what you find in your DB response if you consider them relevant:

  • Covenants of good faith and fair dealing
  • Minor's capacity to contract
  • Fraud in the execution of a contract
  • An employee's capacity to bind a company by contract
  • Section 2-306 of the Uniform Commercial Code
  • Implied contracts
  • Promissory Estoppel
  • Custom and practice between merchants
  • Any other legal concepts you believe may be relevant

You may also want to look at:
Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396 (1997).
Jenkins, Sarah Howard (Fall, 2006). Symposium: Contracting out of the Uniform Commercial Code: Contracting out of Article 2: Minimizing the obligation of performance & liability for breach, 40 Loy. L.A. L. Rev. 401.

 

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91232237
  • Price:- $30

Priced at Now at $30, Verified Solution

Have any Question?


Related Questions in Microeconomics

Question suppose that households change their preferences

Question: Suppose that households change their preferences so that they wish to consume more and save less in the current year. Since the households reduce savings, the interest rate in the economy increases. a. Show on ...

For example utilizing coke-colanbspthe following could

For example, utilizing Coke-Cola the following could cause a decrease in demand. 1. People decide that they like Coke less than before maybe because they like water more. 2. There is a decrease in the number of buyers of ...

Question labor markets are matching markets in which

Question: Labor markets are "matching markets," in which prospective employees are ultimately matched with job vacancies, and the quality of the match has a large impact on its productivity. a. Economists and sociologist ...

Question qrs company pays its executives a higher annual

Question: QRS Company pays its executives a higher annual fixed base pay than TUV Company, but TUV makes a higher amount of its executives' compensation dependent on the performance of its stock. Assuming that their exec ...

Question a solar-powered personal aircraft with vtol

Question: A solar-powered personal aircraft with VTOL capability has been under development for the past 30 years by a group of engineers and physicists. SPPAV, as the plane will be termed, is expected to be available fo ...

Question hypothetically imagine if us abolishes 100 bill

Question: Hypothetically, imagine if US abolishes $100 bill and replace it with a different bill. What according to you will be the repercussion of such a change of domestic market and international market. (Do research, ...

Question there are three consumers a b and c consumer a is

Question: There are three consumers A, B and C. Consumer A is willing to pay 8-3F dollars for a unit of flowers for the public square, B is willing to pay 2-3F dollars for a unit of flowers, and C is willing to pay 9-3F ...

Question what is the maximum amount you would be willing to

Question: What is the maximum amount you would be willing to lend someone if they promise to give you $1000 per month for 52 months and your MARR is 12%? The response must be typed, single spaced, must be in times new ro ...

Question in the case of a binding price ceiling why is the

Question: In the case of a binding price ceiling, why is the price below the equilibrium price? Isn't it possible for suppliers to increase price (to hit the demand curve) at the quantity traded without losing consumers? ...

Question engineering economicassignment submittion due in 8

Question: Engineering Economic Assignment: Submittion due in 8 June 2017 1. Discuss the role of engineering economics in your organization. Identify and describe the nature and types of any two engineering economic decis ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As