Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for $10,500. Colby agrees to deliver the truck on Friday, and Efrem promises to pay the $10,500 on the following Monday. On Thursday, Efrem tells Colby that he changed his mind and will not buy the truck. Over the weekend, Efrem changes his mind again and tenders $10,500 to Colby on Monday. Colby has not sold the truck to another party but refuses the tender and refuses to deliver. Efrem claims that Colby has breached their contract. Colby contends that Efrem’s repudiation released him from his duty to perform under the contract. Explain who is correct, and why.
Essay Question 2: Best Products, Inc., hires Cole to develop and implement an e-commerce strategy for marketing Best’s products. Cole signs a contract that includes a clause prohibiting him from competing with Best during and after the employment. Before the strategy is implemented, Cole resigns from Best’s employ and opens a business to compete with Best. In Best’s suit against Cole, discuss the most important factor the court should consider in determining whether Cole should be allowed to compete with Best.
Essay Question 3: Bob is shopping in Carl’s Hardware Store when a nail gun in use by Dan, one of Carl’s employees, fires without warning and hits Bob in the leg. Carl checks the gun and discovers that it was assembled improperly. Bob files a suit against Eagle Tools, Inc., the manufacturer of the gun, for product liability, on the ground of strict liability. Outline the elements for an action based on strict liability. Explain and analyze in whose favor is the court likely to rule and why.
Essay Question 4: In the following situations, two parties claim the same goods. Discuss who is most likely to prevail in each circumstance. Explain the basis for your response.
(a) Olan steals Phil’s television set and sells it to Quincy, an innocent purchaser, for value. Phil learns Quincy has the set and demands its return
(b) Riley takes his television set for repair to Slick, a merchant who sells new and used television sets. By accident, one of Slick’s employees sells the set to Tuna, an innocent purchaser-customer, who takes possession. Riley wants his set back from Tuna.
Essay Question 5: Pam borrows $5,000 from Quality Auto Sales to buy a car. When Pam does not pay the loan or return the car, Quality wants to transfers the right to the payment to Rapid Collection Agency. Rapid agrees to pay Quality for this right, but for a price that is less than the amount owed. Discuss whether Quality transferred this right to Rapid without Pam’s consent. If so, and Quality committed fraud in the deal with Pam, discuss whether Pam could legitimately refuse to pay Rapid. Explain the basis for your response.