Business Law Study Set 14

Business

Quiz 11 :

Agreement in Traditional and E-Contracts

Quiz 11 :

Agreement in Traditional and E-Contracts

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VIDEO QUESTION: Agreements. Go to this text's Web site at www.cengage.com/blaw/darkson and select "Chapter 11." Click on "Video Questions" and view the video titled Real World Legal: Jack's Restaurant, Scene 2. Then answer the following questions. (a) In regards to the sale of Jack's Restaurant, Jack (the seller) says that he is going to retain the rights to the restaurant's frozen food line. The buyers, however, thought that their sales agreement included the rights to all of the restaurant's signature dishes- whether fresh or frozen. Did the parties have an "agreement to agree" on the terms of the sale of the restaurant Why or why not (b) Suppose that Jack previously offered to sell the restaurant to these particular buyers and they had all agreed on the price and date for delivery. Would such an offer meet the definiteness requirement, even if no terms pertained to the frozen food line Explain. (c) Does Jack's statement that he intended to retain his rights to the frozen food line revoke any earlier offer he may have made to sell the restaurant to these individuals Why or why not (d) Did the buyers unequivocally accept the terms of the offer that Jack expressed in this scene Explain.
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a) An agreement to agree are when the parties seeking to contract agree to the material terms of the contract at a later date. As long as the parties act as though they are bound to the agreements, a modern court will enforce the agreement to agree. Here, it seems that both parties sought a contract, but still had to iron out the material terms.
b) The requirement of definiteness requires the following: identification of the parties, object and subject matter of the contract, the consideration, and the time of payment, delivery or performance. Here, it looks like all those terms were met with the exception of what would happen to the frozen food line. Unless there was a clear manifestation of intent to contract on that issue, a court will not fill in the blank.
c) A revocation occurs when an offeror, in this case Jack, withdraws his offer. He can do this as long as the other party has not accepted his offer. Revocation can either be express or it can implied through performance. In this case, Jack is not revoking the entire offer; rather, he is bringing up a term that had not (apparently) been decided on yet.
d) An unequivocal acceptance means that the other party accepts the mirror image of Jack's contract. If they accept his terms, including his decision to retain the frozen food line if he wishes, then this would be an unequivocal acceptance.

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Revocation On Thursday, Dennis mailed a letter to Tanya's office offering to sell his car to her for $3,000. On Saturday, having changed his mind, Dennis sent a fax to Tanya's office revoking his offer. Tanya did not go to her office over the weekend and thus did not learn about the revocation until Monday morning, just a few minutes after she had mailed a letter of acceptance to Dennis. When Tanya demanded that Dennis sell his car to her as promised, Dennis claimed that no contract existed because he had revoked his offer prior to Tanya's acceptance. Is Dennis correct Explain.
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Revocation:
• When considering whether or not the offer was revoked before Tanya received the actual notice from Dennis we need to know whether or not Tanya's office is an agent acting on behalf of Tanya. Unless Tanya owns the office or she was buying the auto for the business, then the office is not considered an agent for Tanya.
• In this case since Dennis made the offer to Tanya through her office, it may be interpreted as an agent for Tanya. The offer was extended via Tanya's office. Therefore the revocation of the offer via fax dated two days before Tanya accepted the offer legally revoked the offer before Tanya accepted it.
• Hence no contract existed because he had revoked his offer prior to Tanya's acceptance.

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Online Acceptance Anne is a reporter for Daily Business Journal, a print publication consulted by investors and other businesspersons. She often uses the Internet to perform research for the articles that she writes for the publication. While visiting the Web site of Cyberspace Investments Corp., Anne reads a pop-up window that states, "Our business newsletter, E-Commerce Weekly, is available at a one-year subscription rate of $5 per issue. To subscribe, enter your e-mail address below and click 'SUBSCRIBE.' By subscribing, you agree to the terms of the subscriber's agreement. To read this agreement, click 'AGREEMENT.'" Anne enters her e-mail address, but does not click on "AGREEMENT" to read the terms. Has Anne entered into an enforceable contract to pay for E-Commerce Weekly Explain.
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Unfortunately for A, she has entered a binding contract. Here, the offer was the e-delivery of a newsletter. Consideration consisted of the delivery of the newspaper in exchange of the subscriber price. A had the opportunity to read the agreement before subscribing, but chose not to read it. Thus, she is bound to the contract.

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Offer and Acceptance In 1996, Troy Blackford was gambling at Prairie Meadows Casino when he destroyed a slot machine. After pleading guilty to criminal mischief, Blackford was banned from the casino. In 1998, Blackford was found in the casino, escorted out, and charged with trespass. In 2006, he gambled at the casino again and won $9,387. When Blackford went to collect his winnings, casino employees learned who he was and refused to pay. He sued for breach of contract, contending that he and the casino had an enforceable contract because he had accepted its offer to gamble. The casino argued that it had not made an offer and in fact had banned Blackford from the premises. The trial court held in favor of the casino. The appellate court reversed and ordered a new trial. The casino appealed to the Iowa high court for review. Did the casino make a valid offer to Blackford to gamble and thus create an enforceable contract between them Explain your answer. [ Blackford v. Prairie Meadows Racetrack and Casino, 778 N.W.2d 184 (Sup.Ct. Iowa 2010)]
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Online Acceptances Internet Archive (IA) is devoted to preserving a record of resources on the Internet for future generations. IA uses the "Wayback Machine" to automatically browse Web sites and reproduce their contents in an archive. IA does not ask the owners' permission before copying their material but will remove it on request. Suzanne Shell, a resident of Colorado, owns www.profane-justice.org. which is dedicated to providing information to individuals accused of child abuse or neglect. The site warns, "IF YOU COPY OR DISTRIBUTE ANYTHING ON THIS SITE YOU ARE ENTERING INTO A CONTRACT." The terms, which can be accessed only by clicking on a link, include, among other charges, a fee of $5,000 for each page copied "in advance of printing." Neither the warning nor the terms require a user to indicate assent. When Shell discovered that the Wayback Machine had copied the contents of her site-approximately eighty-seven times between May 1999 and October 2004-she asked IA to remove the copies from its archive and pay her $100,000. IA removed the copies and filed a suit in a federal district court against Shell, who responded, in part, with a counterclaim for breach of contract. IA filed a motion to dismiss this claim. Did IA contract with Shell Explain. [ Internet Archive v. Shell, 505 F.Supp.2d 755 (D.Colo. 2007)]
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Suppose that the plaintiffs had learned about the reward offer after the killer had already been arrested and indicted due to their assistance but before the August 1, 2003, deadline. If they had then called in their information on the tip line, would they have been legally entitled to claim the reward in this circumstance Explain.
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A QUESTION OF ETHICS: E-Contract Disputes. In 2000 and 2001, Dewayne Hubbert, Elden Craft, Chris Grout, and Rhonda Byington bought computers from Dell Corp. through its Web site. Before buying, Hubbert and the others configured their own computers. To make a purchase, each buyer completed forms on five Web pages. On each page, Dell's "Terms and Conditions of Sale" were accessible by clicking on a blue hyperlink. A statement on three of the pages read, "All sales are subject to Dell's Term[s] and Conditions of Sale," but a buyer was not required to click an assent to the terms to complete a purchase. The terms were also printed on the backs of the invoices and on separate documents contained in the shipping boxes with the computers. Among those terms was a "Binding Arbitration" clause. The computers contained Pentium 4 microprocessors, which Dell advertised as the fastest, most powerful Intel Pentium processors available. In 2002, Hubbert and the others filed a suit in an Illinois state court against Dell, alleging that this marketing was false, misleading, and deceptive. The plaintiffs claimed that the Pentium 4 microprocessor was slower and less powerful, and provided less performance, than either a Pentium III or an AMD Athlon, and at a greater cost. Dell asked the court to compel arbitration. [ Hubbert v. Dell Corp., 359 Ill.App.3d 976, 835 N.E.2d 113, 296 Ill.Dec. 258 (5 Dist. 2005)] (a) Should the court enforce the arbitration clause in this case If you were the judge, how would you rule on this issue (b) In your opinion, do shrink-wrap, click-on, and browse-wrap terms impose too great a burden on purchasers Why or why not (c) An ongoing complaint about shrink-wrap, click-on, and browse-wrap terms is that sellers (often large corporations) draft them and buyers (typically individual consumers) do not read them. Should purchasers be bound in contract by terms that they have not even read Why or why not
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The plaintiffs argued that "providing information to law enforcement is a customary manner of accepting reward offers from Crime Stoppers." How did the court respond to this argument
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Agreement Ball writes to Sullivan and inquires how much Sullivan is asking for a specific forty-acre tract of land Sullivan owns. In a letter received by Ball, Sullivan states, "I will not take less than $60,000 for the forty-acre tract as specified." Ball immediately sends Sullivan a fax stating, "I accept your offer for $60,000 for the forty-acre tract as specified." Discuss whether Ball can hold Sullivan to a contract for the sale of the land.
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Acceptance Evelyn Kowalchuk, an eighty-eight-year-old widow, and her son, Peter, put their savings into accounts managed by Matthew Stroup. Later, they initiated an arbitration proceeding before the National Association of Securities Dealers (NASD), asserting that Stroup fraudulently or negligently handled their accounts. They asked for an award of $832,000. After the hearing, but before a decision was rendered, Stroup offered to pay the Kowalchuks $285,000, and they e-mailed their acceptance. Stroup signed a settlement agreement and faxed it to the Kowalchuks for their signatures. Meanwhile, the NASD issued an award in the Kowalchuks' favor for $88,788. Stroup immediately told them that he was withdrawing his settlement "offer." When Stroup did not pay according to its terms, the Kowalchuks filed a suit in a New York state court against him for breach of contract. Did these parties have a contract Why or why not [ Kowalchuk v. Stroup, 873 N.Y.S.2d 43 (N.Y.A.D. 1 Dept. 2009)]
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QUESTION WITH SAMPLE ANSWER: Offer and Acceptance. Schmidt, operating a sole proprietorship, has a large piece of used farm equipment for sale. He offers to sell the equipment to Barry for $10,000. Discuss the legal effects of the following events on the offer: (a) Schmidt dies prior to Barry's acceptance, and at the time he accepts, Barry is unaware of Schmidt's death. (b) The night before Barry accepts, fire destroys the equipment. (c) Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Schmidt dies, and later Barry accepts the offer, knowing of Schmidt's death. (d) Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Barry dies, and Barry's estate accepts Schmidt's offer within the stipulated time period.
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CASE PROBLEM WITH SAMPLE ANSWER: Offer. In August 2000, in California, Terry Reigelsperger sought treatment for pain in his lower back from chiropractor fames Siller. Reigelsperger felt better after the treatment and did not intend to return for more, although he did not mention this to Siller. Before leaving the office, Reigelsperger signed an "informed consent" form that read, in part, "I intend this consent form to cover the entire course of treatment for my present condition and for any future condition(s) for which I seek treatment." He also signed an agreement that required the parties to submit to arbitration "any dispute as to medical malpractice…. This agreement is intended to bind the patient and the health care provider … who now or in the future treat[s] the patient." Two years later, Reigelsperger sought treatment from Siller for a different condition relating to his cervical spine and shoulder. Claiming malpractice with respect to the second treatment, Reigelsperger filed a suit in a California state court against Siller. Siller asked the court to order the dispute to be submitted to arbitration. Did Reigelsperger's lack of intent to return to Siller after his first treatment affect the enforceability of the arbitration agreement and consent form Why or why not [ Reigelsperger v. Siller, 40 CalAth 574, 150 P.3d 764, 53 Cal.Rptr.3d 887 (2007)]
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