The Legal Environment of Business: Text and Cases (MindTap Course List)
10th Edition
ISBN: 9781305967304
Author: Frank B. Cross, Roger LeRoy Miller
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 1RE
Summary Introduction
Case summary: Company V.F. contracted with the company S.F. to buy 1500 pounds of basil, on the condition that an independent organization will inspect the crop of company S.F. Due to a sudden hailstorm, the crop of the company S.F. was destroyed and it was unable to perform its part of the contract.
To find: The reason available to company V.F. to deny the performance of the contract in case the basil provided by company S.F. does not pass the chemical residue test.
Expert Solution & Answer
Explanation of Solution
Under the concept of Condition in Contract, the performance of some task is made mandatory by the parties before discharging their obligations. If these conditions are not fulfilled, the parties are not obligated to perform their part of the contract.
In the given case, the inspection of the crop by an independent auditor and the certification of its fitness is a condition precedent to the performance of the contract. If the crop of S.F. does not pass the residue test, V.F. can deny the performance of its part on the basis of non-fulfilment of the condition in the contract.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
The National Society of Professional Engineers (Society) had an ethics rule that prohibited member engineers from disclosing or discussing price and fee information with customers until after the customer had hired a particular engineer. This rule against competitive bidding was designed to maintain high standards in the field of engineering. The Society felt that competitive pressure to offer engineering services at the lowest possible price would encourage engineers to design and specify inefficient, unsafe, and unnecessarily expensive structures and construction methods. According to the Society, awarding engineering contracts to the lowest bidder, regardless of quality, would be dangerous to the public health, safety, and welfare. The Society emphasizes that the rule is not an agreement to fix prices. Rather, it claims the rule was drafted by experienced, highly trained professional engineers to prevent public harm and is therefore reasonable. Does the rule unreasonably restrain…
Global Crossing
The company was founded in 1997 to provide a trans-Atlantic cable to carry telephone and data traffic. Using high-bandwidth optical fiber, the company was able to sell capacity at less than half the price of existing competitors. After six months of operations, Global Crossing offered stock to the public, and the resulting price valued the firm at an astounding $19 billion. Six months later it was valued at $38 billion, more than the Ford Motor Company.
The cable technology was not proprietary and data-carrying capacity was a commodity. That meant that customers could easily switch from one supplier to another, putting them in a powerful bargaining position. Furthermore, customers were price-sensitive. Even worse, the threat of entry was high, and other companies were entering the business, fueled by easy financing. High fixed costs but near-zero marginal costs (the cost to carry one more piece of data) led to fierce price competition within the industry. As new…
For the scenario below, determine the legality of the company's actions.
Ioncorp sells cabinets nationwide to the furniture company Blinkorp. It makes an agreement that Blinkorp will only sell Ioncorp cabinets in its warehouses.
Strictly illegal
Legal
Illegal, depending on impact
Chapter 13 Solutions
The Legal Environment of Business: Text and Cases (MindTap Course List)
Knowledge Booster
Similar questions
- For the scenario below, determine the legality of the company's actions. Lilcorp manufactures budget speaker systems for Bigcorp. It arranges an agreement wherein Bigcorp may not charge more than $300 for a speaker system. Strictly illegal Legal Illegal, depending on impactarrow_forwardSection 139, Disaster Relief Payment, was enacted by Congress in 2001 to ensure that victims of a qualified disaster would not be required to include in gross income payments received for funeral expenses resulting from a terrorist attack. True Falsearrow_forwardThe Customer Service Department of Grand Lakes Technologies asked the Publications Department to prepare a brochure for its training program. The Publications Department delivered the brochures and charged the Customer Service Department a rate that was 25% higher than could be obtained from an outside printing company. The policy of the company required the Customer Service Department to use the internal publications group for brochures. The Publications Department claimed that it had a drop in demand for its services during the fiscal year, so it had to charge higher prices in order to recover its payroll and fixed costs. Should the cost of the brochure be transferred to the Customer Service Department in order to hold the department head accountable for the cost of the brochure? What changes in policy would you recommend?arrow_forward
- Management Agency Relations and the Duty of Loyalty Company A is a manufacturer of consumer electronics products. They hired Agency B to handle their sales and distribution in a specific region. As part of the agreement, Agency B was given exclusive rights to distribute Company A's products in that region. However, Company A has been receiving complaints from retailers and customers about the poor quality of service provided by Agency B. In addition, Company A has discovered that Agency B has been selling its products to unauthorized retailers, violating the exclusive distribution agreement. What should Company A do?arrow_forwardThe Maricopa County Medical Society (Society) is a professional association that represents doctors of medicine, osteopathy, and podiatry in Maricopa County, Arizona. The society formed the Maricopa Foundation for Medical Care (Foundation), a nonprofit Arizona corporation. Approximately 1,750 doctors, who represent 70 percent of the practitioners in the country, belong to Foundation. Foundation acts as an insurance administrator between its member doctors and insurance companies that pay patients’ medical bills. Foundation established a maximum fee schedule for various medical services. The member doctors agreed to abide by this fee schedule when providing services to patients. The state of Arizona brought this action against Society and Foundation and its members, alleging price fixing, in violation of Section 1 of the Sherman Act. Who wins? Explain.arrow_forwardApfel manufactures smartphones in the United States and sells them nationwide. Apfel contracts with Big Box to make it the exclusive distributor of Apfel smartphones in California. In the contract, Apfel specifies that it would not sell its smartphones to any other retailer within a 20o-mile radius of a Big Box store. In its California stores, Big Box has a unique pricing policy. It charges a higher price to its business customers, while giving its non-business customers a 10 percent discount off the list price. Circle Store, a rival of Big Box, asked Apfel to allow it to sell Apfel phones in California. Apfel refuses because of its contract with Big Box. Apfels's distribution policy in New York differs from that in California. In New York, Apfel does not reject any distributor's request to sell Apfel smartphones. However, Apfel requires that New York distributors sign a contract agreeing not to sell Apfel products below the prices specified by Apfel in a monthly "price list." In…arrow_forward
- Toshiba Corporation, a Japanese electronics and engineering conglomerate with headquarters in Tokyo, produces a wide range of products, including personal computers, semiconductors, consumer electronics, household appliances, and nuclear power plant systems. The company also provides an array of services, such as those focused on information technology, communications, and nuclear reactor construction and operation. In May 2015, Toshiba formed an outside panel to investigate potential accounting irregularities at the company. The formation of such an outside panel is an accepted procedure for companies in Japan, where corporate boards of directors are composed primarily of company executives, with few independent outside directors. An outside panel is typically formed to investigate matters that may involve improprieties by senior managers and executives. Toshiba's CEO, Hisao Tanaka, resigned in July 2015 when the investigation uncovered that he was aware that Toshiba profits had been…arrow_forwardKnown for its stylish ready-to-assemble home furnishings, IKEA has long relied on an extensive supplier net- work to manufacture its products and support its rapid global expansion. It has worked hard to develop a successful approach to encourage high ethical standards among its suppliers, including standards concerning the notoriously difficult issue of child labor. IKEA's initial plan to combat the use of child labor by its suppliers involved (1) contracts that threatened immediate cancellation and (2) random audits by a thirdparty partner. Despite these safeguards, the company discovered that some of its Indian suppliers were still employing children. IKEA realized that this issue would crop up again and again if it continued to use low-cost suppliers in developing countries—a critical element in its cost-containment strategy. 2020-2021 Page 7 of 8 Using child labor, for example, can signal bigger problems: production inefficiencies that require the lowest cost labor, lack of…arrow_forward1.A retired businessman who owned a track of land was approached by a real estate agent, who is interested to buy his land. The purchase price offered by the agent was above the prevailing fair market value (FMV). The agent wants to develop the land into a commercial area and sell it to the public. The agent discussed the terms and conditions of the deed of sale in detail to the businessman, and the businessman agreed to the deal. Last year, the businessman was diagnosed of dementia by his family doctor, and the agent though was aware of it. Was a contract of sale formed? If yes, is it enforceable? Please state your reasons. 2. Jacky invited her friend, Lourdes, to her house. Lourdes has a beautiful sport car and Jacky is interested and offered to purchase it at a prevail market price or FMV, but Lourdes rejected her offer. Jacky offered Lourdes a bottled of vodka. When Lourdes consumed so much of it, she feels dizziness. Jacky took advantage and offered again to purchase her sport…arrow_forward
- Apfel manufactures smartphones in the United States and sells them nationwide. Apfel contracts with Big Box to make it the exclusive distributor of Apfel smartphones in California. In the contract, Apfel specifies that it would not sell its smartphones to any other retailer within a 20-mile radius of a Big Box store. In its California stores, Big Box has a unique pricing policy. It charges a higher price to its business customers, while giving non-business customers a 10 percent discount off the list price. Apfels's distribution policy in New York differs from that in California. In New York, Apfel does not reject any distributor's request to sell Apfel smartphones. However, Apfel requires that New York distributors sign contracts agreeing not to sell Apfel products below the prices specified by Apfel in a monthly "price list." In contracts with its distributors in all other states, Apfel insists that sales of its smartphones be tied to a data plan. No consumer can purchase an Apfel…arrow_forwardReaction to discussion below: Melodee Lane Lingerie Co. was a tenant in a building where alarm systems were maintained by the ADT company. When the systems were defective and allowed water into the building, it damaged Melodee’s property; Then Melodee decided to sue ADT and their defense was that the service contract limited the liability to 10% of the annual service charge given to the customers. The limitation can be valid since the ADT company did not provide much liability protection. The ADT company can offer another protection plan to Melodee, which would cover her property but at a higher price rate. This case limitation of liability clauses will be enacted since ADT company was not fully liable for Melodee's property, which only would cover the limited 10%. A limitation of liability clauses contract states that one of the parties is not fully liable for damages in case of a breach. The ADT company is at fault for the malfunctions in their systems they should offer a higher…arrow_forwardIn 1961, Ford Motor Company acquired Autolite, a manufacturer of spark plugs, in order to enter the profitable aftermarket for spark plugs sold as replacement parts. Ford and the other major automobile manufacturers had previously purchased original equipment spark plugs (those installed in new cars when they leave the factory) from independent producers such as Autolite and Champion, either at or below the producer’s cost. The independents were willing to sell original equipment plugs so cheaply because aftermarket mechanics often replace original equipment plugs with the same brand of spark plug. GM had already moved into the spark plug market by developing its own division. Ford decided to do so by means of a vertical merger under which it acquired Autolite. Prior to the Autolite acquisition, Ford bought 10 percent of the total spark plug output. The merger left Champion as the only major independent spark plug producer. Champion’s market share thereafter declined because Chrysler…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
BUSN 11 Introduction to Business Student EditionBusinessISBN:9781337407137Author:KellyPublisher:Cengage Learning
Essentials of Business Communication (MindTap Cou...BusinessISBN:9781337386494Author:Mary Ellen Guffey, Dana LoewyPublisher:Cengage Learning
Accounting Information Systems (14th Edition)BusinessISBN:9780134474021Author:Marshall B. Romney, Paul J. SteinbartPublisher:PEARSON
International Business: Competing in the Global M...BusinessISBN:9781259929441Author:Charles W. L. Hill Dr, G. Tomas M. HultPublisher:McGraw-Hill Education
BUSN 11 Introduction to Business Student Edition
Business
ISBN:9781337407137
Author:Kelly
Publisher:Cengage Learning
Essentials of Business Communication (MindTap Cou...
Business
ISBN:9781337386494
Author:Mary Ellen Guffey, Dana Loewy
Publisher:Cengage Learning
Accounting Information Systems (14th Edition)
Business
ISBN:9780134474021
Author:Marshall B. Romney, Paul J. Steinbart
Publisher:PEARSON
International Business: Competing in the Global M...
Business
ISBN:9781259929441
Author:Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher:McGraw-Hill Education