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Business law Questions Essay

Q1.  A contract of sale made on January between a seller and a buyer for the delivery of 10,000 pounds of tomatoes in July and the seller to set the price on June 15 and the buyer pay on delivery.


By setting the price at $1.10, the seller was not right because when the buyer went into agreement with him to sell the tomatoes in January and agreed that the seller was to set the price on June 15, it was expected that the price would be pegged on market price. This is because for the agreement to be made the seller should make a reasonable offer i.e. the price for the tomatoes should be at least what is the market price.

The buyer had a right to ask for reduction of the price because he / she could not buy from other sources at the market price for the buyer was tied by the contract agreement (Enderlein, F, 139). Being tied by the contract also meant that the buyer had the right not to be exploited simply by the virtue of having agreed to buy from the said seller in the sale contract. The $1.10 price is seen as exorbitant and likely to exploit the buyer simply because he/ she had gone into the contract agreement with the seller.

Q2. A contract between Jared (buyer) and Zack enterprises for purchase of computers. Rights and responsibilities possessed by Jared on receiving the computers.


When Jared went into contract with Zack enterprises to purchase computers from the latter, he acquired some rights and responsibilities i.e. after receiving them. Jared in this case has the right to inspect by removing goods from the cartons, examining the goods and even testing samples. Jared has also the right to reject the goods that do not meet the set standards, reject full shipment and seek damages, reject some commercial units, accept the remainder and seek damages, and also may opt to accept all and inform the seller of the non-conformity and seek damages.

In the instance that Jared has received the goods he has the responsibility of inspecting/ examining the goods in reasonable time after receipt of them. It should be noted that costs associated with the inspection are met by the buyer but may be gotten from the seller should the goods turn out to be defective. The other responsibility that Jared has is to pay for the goods on acceptance according to the laid down mode and period.

Q3. A contract that was breached on January 10, 1986 and damages being sought on January 15, 1990. Can the damages be recovered?


It is clear that a contract existed prior to January 20 1986 between Anders and Barnes on sale of electronic goods. The actual date of breach of the contract is January 10, 1986 though Anders discovered the breach on January 20, 1986. The action was taken on January 15, 1990 which is about four years after the breach. There is a statute of limitation in United States laws of contract which defines an action that can be taken against such a breach. It is not later than five years and therefore Bernes’ defense to the action is not valid. Anders has the right to bring forth action against Barnes for the breach provided that the five years limit has not been surpassed.

 Therefore since it is within the reasonable time of performance or claiming the damages, Anders can either recover the difference by getting substitute goods or the actual goods if the agreed upon goods are unique in nature.

Q4. A case involving claim for on damages as result of personal injury and failure of purchased equipment to function.


In the first instance in Peter’s case he has no right to demand damages for failure to receive the expected service from the seller. This is because the contract forms that he signed stated that he had no right t sue the seller in the event that the goods were defective. The fact that the sellers obligations to repair and replace defective goods in reasonable time was not conspicuous or clear in the first instance does not give Peter the right to sue for damages because he signed the contract forms (Koch, R., 120).

In the second case whereby peter was injured by a cap that burst from an unopened bottle, he has a right to sue for damages. This is because consumers should be protected from injury from goods that they purchase from manufacturers or sellers. Although one should take reasonable care, Peter was injured by a cap from an unopened bottle. This turns to be negligence on the part of the manufacturer or seller and thus giving Peter authority to sue for damages for personal injury and subsequent hospitalization costs.

Q5. A case of Fran who had an expensive automobile which she intended to sell at a later date to a potential buyer. The buyer failed to buy the car at the agreed time and a case ensued.


When Fran entered into contract with the buyer she ought to have sought enough assurance from the buyer i.e. ascertain that the buyer is in a position to perform his or her obligations in the contract. Since it is not clearly stated in the question, it is assumed that adequate assurance in the given situation was not given. Eventually as a result of lack of finances or insolvency, which may have been beyond the buyer’s control he or she was unable to meet the obligations set out in tee contract. Although Fran may have incurred some loss due to having been tied by the contract not to sell the automobile to another able buyer, she cannot recover the damages from the said buyer.

Q6. A case of Peter involving borrowing loan from three banks, first two not agreeing to lend to peter and the third one accepting his application. Peter went ahead to default the loan payment. Advise him on his rights.


When Peter applied for the loan from the first two banks he seems to have been denied on the basis of his minority status. This is so because there was no explanation given as to why he was denied the loan. The Equal Credit Opportunity Act (ECOA) prohibits any discrimination based on color, race, religion, national origin, sex, marital status, or age.  When one is denied credit as in the case of Peter there ought to be an explanation in writing and for this reason he a right to sue the financial institutions for failing to give him the loan.

The second case where by Peter was given the loan and failed to repay, the bank accelerated the case to a collection agency. The manner in which the agency went about collecting the debt from Peter was not right. This is because they used to call him day and night and used abusive language and eventually ended up stressing him. The agency in its attempts to collect loans should adhere to fair debt collection practices which states that it can’t threaten to sue unless intent is there.

The manner in which Peter was harassed and stressed leading his poor performance at work and subsequent firing from the job gives him the right not to pay the loan to the debt collection agency.

Q7. A case involving Samuel who went into a contract to purchase furniture on credit from a seller. The seller said he usually sold the contract to finance company which collected the down payments from the buyers like Samuel.


When Samuel went into contract to purchase furniture from the seller he understood the interest rates and annual percentage rate which he agreed to pay. But it was expressly put out that the seller would remain responsible for any non-conformities in the furniture or breaches on his part. Since the furniture turned out to be defective Samuel should first recover damages for the non-conforming goods before agreeing to settle or pay the outstanding differences related to the furniture against the finance company to which the debt was accelerated by the seller.

By demanding payment of the furniture which were defective from Samuel by the finance company is violating his right to enjoy the quality of goods he asked for (Craig A. Smith (2005) and the Law Schoolhelp.com)

 If this practice were to continue sellers would be selling defective goods to consumers on credit and then accelerating the debt to collection or finance companies. This is very bad for to the buyer and should never be allowed to happen.

Q8. A case involving a home sale combined with telemarketing where a sales representative of an encyclopedia company struck a contract with Sue Thompson to purchase encyclopedia for her children and pay through monthly installments. She later found that she was unable to pay.


When the sales representative called Sue Thompson she made an aggressive presentation during which it is expected that she disclosed all the details of the contract to Sue. This must be the reason why Sue in the first place made the decision to sign the contract to be paying for the books in monthly installments. The requirement is that in such circumstances one should not sign without understanding the contents of the contract. It leads then to the decision that Sue cannot rescind her decision which also appears to have passed the three day rule rescission which gives the buyer the right to change mind within three days of the sale. Sue has no option other than to continue paying the installments as agreed from whichever source.

 Works cited :

Craig A. Smith (2005) and the Law Schoolhelp.com

Enderlein, F., Rights and Obligations of the Seller under the UN Convention on

               Sarcevic, P. / Volken, P. (eds.), Contracts for the International Sale of Goods

               (New York, Oceana), 1986, 133-201

Hellner, J., The Vienna Convention and Standard Form Contracts Sarcevic, p. / Volken,

  1. (eds.), international sale of goods, (New York, Oceana), 1986, 335-363

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Koch, R. The Concept of Fundamental Breach of Contract under the United Nations

            Convention on Contracts for the International Sale of Goods Pace International

             Law Review (ed.), Review of the Convention on Contracts for the International

              Sale of Goods, Kluwer

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