BUSINESS LAW
17th Edition
ISBN: 9780357007594
Author: Mann
Publisher: Cengage Learning
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Question
Chapter 3, Problem 12CP
Summary Introduction
Given situation:
Person SG purchased a lifetime termite protection plan from the local allied Company B branch which is a franchisee company for Company T for his home. This plan provided protection from various activities like infestation, re-inspect periodically and provides additional treatment in case of damages. It also provided that all the disputes shall be settled exclusively by arbitration.
Later person SG sold his house to Person B (which includes termite protection plan). After few days, person B found that the house to be infested with termites. Person B is not satisfied with the repairs of Company B service. He sued person SG and company B in State Court of A.
To discuss: Whether supreme court of State A is correct.
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Rensselaer Water Company contracted with the city of Rensselaer to provide water to the city for use in homes, public buildings, industry, and fire hydrants. During the term of the contract, a building caught fire. The fire spread to a nearby warehouse and destroyed it and its contents. The water company knew of the fire but failed to supply adequate water pressure at the fire hydrant to extinguish the fire. The warehouse owner sued the water company for failure to fulfill its contract with the city. Can the warehouse owner enforce the contract? Explain.
Reaction to discussion below:
In Melodee Lane Lingerie Co. v. ADT Co., the service contract's limitation of liability clause was lawful and enforceable. The equal parties freely entered the contract with knowledge of the potential risks, they should be bound by the agreement, including the limitation of liability clause that was clearly stated in the contract. As long as the contract and the clauses within it are clear, unambiguous, and negotiated between two equal parties, it will most likely hold in court as valid. These clauses divide the risk of loss among the parties and can limit one party's possible liability in the event of a breach even if it’s due to negligence.
However, it is important to balance the competing policy interests at play. Although this opinion highlights freedom of contract and efficient risk allocation, it may also have the unintended effect of reducing incentives for companies to act responsibly and ensure the proper functioning of their services. As such,…
Toby's Doggie Hotel enters into a contract with ABC Marketing to purchase 100 orange frisbees for $300.00. Toby's Doggie Hotel repudiates the contract and ABC later resells the frisbees to someone else for $250.00.
a.
ABC is not entitled to recover from Toby's Doggie Hotel
b.
ABC is entitled to recover $50.00 from Toby's Doggie Hotel
c.
ABC is entitled to recover $250.00 from Toby's Doggie Hotel
d.
ABC is entitled to recover $300.00 from Toby's Doggie Hotel
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