Learning Activity 1-

Nancy was shopping for a new car and had a 1998 Honda Accord to trade in. In the negotiating process, the appraiser at the dealer took her car for a test drive to aid in the appraisal process. Nancy had found a car she liked and began negotiations in earnest. They settled on a price for the new car, with a final agreement contingent on an acceptable amount for the trade-in. When the sales manager brought a contract showing the price of the new car, with the deduction for the trade in, it noted "1999 Accord" as the car traded in. Everything else in the car's description (mileage, etc.) was correct. Nancy noticed this but said nothing and quickly signed the contract. A few minutes later when Nancy went to sign over the certificate of title on her old car, the sales manager said that they deal was off because he had based his trade-in allowance on the car being a 1999 model. Nancy said she would take the deal only as it was, and would not accept a lower trade-in allowance. After some further negotiations, the dealer agreed to grant the trade-in allowance as originally stated. Nancy signed over the title and took the new car home. The next morning, the sales manager called and said that the dealer was rescinding the contract based on the mistake. Discuss the issues and how this case would turn out.

Learning Activity 2-

Carrie, a 17-year-old high school student, had been baking homemade pies and cakes since she was 13 years old. On May 15, Paul contacted Carrie and asked if Carrie could provide baked goods in about two weeks for a graduation party of 300 students to be held on June 1. Paul stated that he would pay $1500 for cakes and pies. Carrie stated that she would be more than happy to bake the cakes and pies for Paul's party. On May 27, Carrie left a message on Paul's answering machine stating that the supplies are more expensive than she expected and that she would need a total of $2100. Paul never responded to the message.

On May 31, Carrie called to inform Paul that she had begun baking and the pies and cakes would be ready for the party. Somewhat surprised, Paul explained that he hired someone else to provide the cakes and pies because Carrie called and requested a higher price. Paul hired Cakes and Things, Inc., to provide the cakes and pies for the original contract price that he and Carrie agreed to, the sum total of $1500. Upset by this, Carrie swore that Paul would "see her in court." In addition to the cakes and pies, Cakes and Things, Inc., agreed to provide the party hats and favors. The price of the party hats and favors was $900.

On the day of the party, Cakes and Things, Inc., called Paul to say that his dessert order was ready, but there was bad news. Cakes and Things, Inc., discovered the day before the party that it could not provide the party hats and favors because there was a strike at the supply plant where the party hats and favors were produced. As such, the goods did not arrive on time. The entire agreement was memorialized in writing on an invoice of Cakes and Things, Inc., signed by both Paul and a Cakes and Things, Inc., representative. Angry, Paul stated that things just were not going well and he was going to cancel the party. As such, he did not need the cakes and pies.

Please discuss: All legal concepts.

1. The issues in a suit for damages by Carrie against Paul; and,

2. The issues in a suit for damages by Paul against Cakes and Things, Inc., including any counterclaim Cakes and Things, Inc., may have.