Smith and Roberson’s Business Law
17th Edition
ISBN: 9781337094757
Author: Richard A. Mann, Barry S. Roberts
Publisher: Cengage Learning
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Chapter 14, Problem 14CP
Summary Introduction
Case summary:
Person R, aged seventeen, bought a truck from company J by trading in his passenger car for $6,743 purchase price and $2,723 in credit agreeing to pay in equal monthly instalments. After he paid first month instalments, his truck caught fire. Insurance agent refused to deal with him as he is minor. Person R sued the company J to annul his contract with them and recover the purchase price he paid already. Company J argued that he cannot annul the contract as the truck is a necessary item.
To discuss: On whose favour should court rule.
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Executive Financial Services, Inc. (EFS), purchased three tractors from Tri-County Farm Company (Tri-County), a John Deere dealership owned by Gene Mohr and James Loyd. The tractors cost $48,000, $19,000, and $38,000. EFS did not take possession of the tractors but instead left the tractors on Tri-County’s lot. EFS leased the tractors to Mohr-Loyd Leasing (Mohr-Loyd), a partnership between Mohr and Loyd, with the understanding and representation by Mohr-Loyd that the tractors would be leased out to farmers. Instead of leasing the tractors, Tri-County sold them to three different farmers. EFS sued and obtained judgment against Tri-County, Mohr-Loyd, and Mohr and Loyd personally for breach of contract. Because that judgment remained unsatisfied, EFS sued the three farmers who bought the tractors to recover the tractors from them.
a) What does the entrustment rule provide? Explain.
b) Did Mohr and Loyd act ethically in this case?
c) Who owns the tractors, EFS or the farmers?
Stein, a mechanic, and Beal, a life insurance agent, entered into a written contract for the sale of Stein’s tractor to Beal for $6,800 cash. It was agreed that Stein would tune the motor on the tractor. Stein fulfilled this obligation and on the night of July 1 telephoned Beal that the tractor was ready to be picked up upon Beal’s making payment. Beal responded, “I’ll be there in the morning with the money.” On the next morning, however, Beal was approached by an insurance prospect and decided to get the tractor at a later date. On the night of .July 2, the tractor was destroyed by fire of unknown origin. Neither Stein nor Beal had any fire insurance. Who must bear the loss? Why?
Matthew and Joe were roommates. When they were renting their apartment, each agreed to pay half of the cost of the rent and the cable and electric bills. Two months after moving in, Matthew borrowed Joe's car and was involved in an accident. Matthew promised to pay $2,200 in damages if Joe promised not to file a claim with his insurance company. Joe agreed. However, Matthew never paid him for the damages. He claimed that the agreement was not enforceable because there was no consideration. What is the outcome?
Rubric
Chapter 14 Solutions
Smith and Roberson’s Business Law
Ch. 14 - Prob. 1COCh. 14 - Prob. 2COCh. 14 - Prob. 3COCh. 14 - Prob. 4COCh. 14 - Prob. 5COCh. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - Prob. 3QCh. 14 - Prob. 4QCh. 14 - Prob. 5Q
Ch. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - Prob. 8QCh. 14 - Prob. 9QCh. 14 - Prob. 10CPCh. 14 - Prob. 11CPCh. 14 - Prob. 12CPCh. 14 - Prob. 13CPCh. 14 - Prob. 14CPCh. 14 - Prob. 15CPCh. 14 - Prob. 16CPCh. 14 - Prob. 17CPCh. 14 - Prob. 18CPCh. 14 - Prob. 19CPCh. 14 - Prob. 20CPCh. 14 - Prob. 21CPCh. 14 - Prob. 22CPCh. 14 - Prob. 1TSCh. 14 - Prob. 2TSCh. 14 - Prob. 3TS
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