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15 Jun 2019

Understanding how contracts work is essential for any business person. After listening to the lecture and reading your chapter on formation of contracts, answer the following Question:1) I have an old TV for sale and have a potential buyer who wants to take it now and pay for it over 10 months. How can I protect myself if she moves or disappears?

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Casey DurganLv2

16 Jun 2019

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Learning Activity 1

This assignment focuses on UCC contracts.

Scenario: Landmark Company is a US-based business that sells iron tables to retailers in the US. The tables are purchased from individual metalsmiths, from US wholesale suppliers, and suppliers in Mexico.

Landmark ordered by telephone 300 iron tables to be shipped by April 1 from Metal Elements, Inc., another US company. No other sales terms were discussed. Landmark followed up the telephone call with an email to Metal Elements confirming the number of tables in the order and the delivery date, but did not discuss price. Metal Elements did not respond but shipped the tables as ordered to Landmark by April 1 at a price of $700 each, totaling $210,000.

Landmarkâs new Director of Purchasing, Payton Mann, is concerned about whether Landmark is bound to accept the tables from Metal Elements since Landmark had no formal acceptance or written correspondence Metal Elements. Payton is also concerned about the price of the tables which is higher than she had expected to pay. She emails you, one of the Landmark owners, to explain the situation with Metal Elements and to seek your advice about the sales.

Respond to Payton via email including:

A. An analysis and explanation of whether this is a valid contract between Landmark and Metal Elements, and why or why not; suggest to Payton how this situation should be handled;

B. For Paytonâs future information, include in the email a hypothetical situation in which the same facts apply as in the Landmark â Metal Elements order except that, upon inspection, fifty of the tables delivered from Metal Elements were damaged; provide an analysis of Landmarkâs options and suggestions for resolving this situation with Metal Elements.

Sources: Saylor: Advanced Business Law and the Legal Environment

Chapter 8: Formation of Sales and Lease Contracts, Uniform Commercial Code, Contracts for Sale of International Goods (CISG)

Chapter 9: Title, Risk and Insurable Interest

Chapter 10: Performance, Breach of Sales Contracts and Remedies

Chapter 11: Sections 11.1-11.7 (Warranties and Product Liability)

Week 5 Overview

SALES AND LEASE CONTRACTS

Formation of Sales and Lease Contracts, Uniform Commercial Code, Contracts for Sale of International Goods (CISG)

Introduction: Contracts for the sale and lease of goods are based primarily on the Uniform Commercial Code (UCC), rather than common law contract principles. UCC Article 2 and Article 2A govern contract formation for the sale and lease of goods. The goal of the UCC is to provide a relatively simple, straightforward guide to commercial transactions without the formality and inflexibility required to validly form other types of contracts. The UCC has been adopted in all states; Louisiana has not adopted Articles 2 and 2A. Because globalization has increased the scope and number of international sales transactions, the United Nations Convention on Contracts for the International Sale of Goods (CISG) is a model uniform law that applies for those nations that have adopted it.

Title, Risk, and Insurable Interest

Introduction: The UCC addresses and clarifies the concepts of identification of specific goods to a contract, when risk of loss for goods passes from a seller to a buyer, and which party to a sales contract holds an insurable interest in goods. Under the UCC, typically title and risk of loss for the goods in a specific transaction pass from a seller or lessor to a buyer or lessee according to specific terms in the contract between the parties. Parties to sales and lease agreements often have insurance to protect against damage, loss, or destruction of goods.

Performance, Breach of Sales Contracts, Remedies

Introduction: Under a sales or lease contract subject to the UCC, the seller or lessor has the basic duty to transfer and deliver the goods according to the contract terms, and the buyer or lessee has the basic duty to accept and pay for the goods. Parties may also be bound to implied terms based on customs within an industry, or based on prior contracts and dealings between the parties. When a contract is breached, the non-breaching party has available remedies under the law, such as retaining the goods or requiring the breaching party to perform under the contract. As with common law contract principles, remedies are designed to put the non-breaching party in essentially the same position as if the contract had not been breached.

Warranties and Product Liability

Introduction: A warranty is a promise, or guarantee, by a seller or lessor that certain facts are true of the goods being sold or leased. Types of warranties include (1) warranties of title guaranteeing that the goods have clear and valid title, (2) express warranties promising specific facts about the goods, and (3) implied warranties of merchantability, or fitness for a particular purpose. A warranty creates a legal duty for the seller or lessor; a non-breaching party can recover damages for breach of warranty(ies). Because warranties are associated with the sale or lease of products, breach of warranty claims are a part of product liability claims and manufacturers and sellers of goods can be held liable for breach of warranty for defective products. Warranties are subject to regulation under the UCC, product liability tort law, contract law, and the Magnuson-Moss Warranty Act.

Comparison of Common Law vs. UCC Contracts

Introduction: Common law contract principles are stringent, specific, relatively rigid and rules-laden, and require clarity in the formation and performance of agreements. Common law contract rules focus on protecting the rights and interests of parties to an agreement. UCC contract principles are more flexible, looser, permit implied terms in agreements, focus on âkeeping the deal togetherâ, and expediting business transactions. The UCC rules rely on prior dealings between the parties, customs within an industry, and reasonableness to complete contracts that may have omitted or implied terms. Both common law and UCC principles are based on fairness for the parties, and provide remedies, such as compensatory damages or specific performance, for contract breach. The goal of remedies for breach under both common law and the UCC contracts is to restore the non-breaching party to essentially the same position as if there had been no breach.

Need help revising, and recommendation for a conclusion.

Throughout this paper is my understanding of what I have learned in class chapters 1-4, expressing my understanding and opinions. Economics is the study of how we deal with scarce resources. Microeconomics specially deals with business in the home country exclusively. This type of economics affects small businesses in the home country only. On the other hand, macroeconomics concerns our national welfare concerning trade and international business.

I believe that many things affect our economy on a microeconomics level. Things such as our understanding of our country in reflection to the world are very important. That is why we study ourselves before we study the macroeconomic principle of the world. Understanding ourselves is what microeconomics teaches us. Working from the inside out. The world is a place where there are differences in our wants and what we get. That is what makes items scarce. That is what positive economics is. Positive economics deals with what is and what we have. The other type of economics is called normative statements. This deals with what we should receive instead of what is and deserved to some extent. It's our scarce resources that determine our allocation of resources and how we use our resources and time. This is where opportunity costs come in, giving up something to do something. A successful business or country never ignores opportunity costs. We must ensure that we have a comparative advantage instead of the absolute advantage. Our resources must be used to achieve maximum output. Comparative is met when we have fewer opportunity costs to make some certain products than the other person or entity.

My initial understanding was scarcity was oil potentially running out, but we have so much of it that you can always find more with techniques such as fracking. Now it's obvious to me, one of our most scarce resources is time. You cannot avoid the 8,760 hours in a year. I understand that people have unlimited wants but limited resources. Everything has a cost and we must make a choice as we don't have unlimited farms, factories workers, etc. scarcity forces choices and this ties in with opportunity cost, for every gun made, a theft from the hungry is made. The opportunity cost not being used to feed the poor, but to make guns. And I find it easy to understand no one can have everything choices must be made on benefits. If I'm going to school, imp giving up making cash, as I'm giving up money for an education, I value education more. Scarcity is also related to the invisible hand. As it's an achievement that leads free markets and capitalism through competition for scarce resources.

My understanding of the invisible hand is a person neither intends to promote public interest and does not know how much he is promoting it. Only intending on his own gain. Without being his intention a person can be lead by the invisible hand to do good for society by pursuing one's own self-interest. Going into equity and efficiency the invisible hand does ensure both equity and efficiency. People work in their selfish ways to maximize profit while also contributing to the economy as a whole. It can also be argued that as the invisible hand wants to ensure efficiency, it cannot guarantee efficiency, because it can fail to produce an efficient allocation of resources, which in turn lead to a market failure. It can also be argued that it can't guarantee equity because not everyone gets a fair price. The way I like to remember efficiency is with a real-life example, like a reduction in the number of workers needed to produce a particular good for a particular amount. Equity refers to the ownership interest in an asset, for example, if a person owns a house with a market value of $800,000 and owes $100,000 on the mortgage leaving a $700,000 equity in the home.

It can be predicted that if the price of beef increases - ceteris paribus-the quantity of beef demanded by buys will decrease. In other words, if the price of beef increases, then the quantity of beef increases, then the quantity of beef demanded will decrease because all things have to be equal. In-class lecture thought me all other things remaining the same. Economists use ceteris paribus to determine the effect of a factor when all other factors have been held the same and helps simplify the study and get a more refined data set.

Economists deal with many issues that pertain to assuring that both a countries domestic output is efficient and that there is an effective trade balance. This means that there are a balance and limit on the amount of imports. Also, this means home production must be able to meet export demands. There are many factors that affect the production of goods and their effect on shifting the production possibilities frontier. This involves evaluating every detail including knowing the products and any close substitutes and compliments. It also involves knowing how an action or other external force will affect demand. This is called price elasticity; Substitutes are products that can replace any given product or service. An example of this would be Coke and Pepsi. The presence of substitutes affects price elasticity because if there are other options, then any change to the price or quality of the product will cause a shift of the demand curve. O course, price is a huge reason why the demand for a product decreases or increases yet it doesn't shift the curve because of the price only. This price change will cause a domino effect that will end with the shifting of the demand curve because it will cause an increase or decrease in demand of the substitute good if the price change is either lower or higher respectively. This price change serves as a catalyst that will change people's desire to spend more money on a more expensive product and that will instead choose to buy the substitute good for cheaper or buy more of the desired product. The change in the price of actual products will not shift the demand curve yet the change of the price of substitutes will because it serves to change people's purchasing behavior. On the other hand, compliments serve to boost demand when there is a decrease in price. The use of complementary goods is dependent upon another product. An example of this would be hot dogs and buns. If the price of hotdogs decreases then, conversely, the demand for hot dog buns will increase because of this change in price. In this scenario, the decrease in price will cause a positive shift in the demand curve because of people's desire and willingness to buy more buns. This is an example of a demand shifter. There are a few other demand shifters. The shifters of the demand curve are changes in expectations, disposable income, price of substitute goods and complements, tastes and preferences, and population size and composition. Changes in income affect the demand curve because if income is lower then people tend to save any extra income instead of wasting it. Disposable income is minimized and spending is lower. This also causes people to see a perceived value of things and distinguishing between what is necessary and what is a relative luxury. The lower the income, the higher the saving and avoidance to spend. An example of this would be if someone needs to buy some medication and it is relatively expensive, that doesn't mean that someone won't buy the medication just because it is expensive. It is necessary. Other factors that contribute to spending and demand are having a price ceiling and price floor. Having a price ceiling is a limit on the price of the product this is a government-imposed idea that is meant to protect consumers from unfair pricing and other conditions that may be malicious or obscure. This affects demand because if there is a price ceiling there is a limit on profit on a unit-to-unit basis. The other factor is the price floor. This price floor was created to encourage competition and affect consumers' willingness to pay because sometimes this new price may be higher than the original price. This causes a negative impact on a product that has a less than wanted perceived value. Many factors contribute to economic prosperity and certainly do help assure that information is analyzed and implemented into an economic and business plan.

limejellyfish231

Question 1:

How will commercial airlines respond to the threat of new $27,500 fines for keeping passengers on the tarmac for more than 3 hours? What inefficiency will this create?

Question 2:

I recently sold my used car. If no new production occurred for this transaction, how could it have created value?

Question 3:

The U.S. government subsidizes flood insurance because those who want to buy it live in the flood plain and cannot get it at reasonable rates. What inefficiency does this create?

Question 4:

An elderly physician has built up his own practice into a quite valuable business. Now that he is thinking of retiring, he wants to take on a partner to learn the business and eventually buy the practice in three years. Her compensation will be a salary plus 25% of the profits if they are below the historical average and 50% for any increase above the historical average. The eventual purchase price for the practice will be 5 times the average profits over the three years. Discuss the efficiency aspects of such a contract. Are the incentives of the buyer and seller aligned?

Question 5:

You were able to purchase two tickets to an upcoming concert for $100 apiece when the concert was first announced three months ago. Recently, you saw that StubHub was listing similar seats for $225 apiece. What does it cost you to attend the concert?

Question 6:

Due to the housing bubble, many houses are now selling for much less than their selling price just two to three years ago. There is evidence that homeowners with virtually identical houses tend to ask for more if they paid more for the house. What fallacy are they making?

Question 7:

Students doing poorly in courses often consider dropping the courses. Many universities will only offer a refund up to a certain date. Should this affect their drop decisions?