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ADMS 2610 (70)

Midterm Questions

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York University
Administrative Studies
ADMS 2610
Richard Gasparini

QUESTIONS: Question 1– 6 Marks Cheap And Save Food Stores Limited regularly purchased large quantities of strawberries for its bulk food section from a Canadian food wholesaler. The purchase of strawberries was carried out with a separate purchase order and invoice each time although a full, written contract had been executed between the parties governing the relationship in its entirety. One of the terms of the contract specified that for individual orders in excess of 100 kg, a quantity discount of 15% would be applied to the purchase price. Since these were very favourable terms, Cheap And Save regularly ordered quantities ranging between 500-700 kg of strawberries to adequately supply all of its stores. After it had been purchasing strawberries for over a year, Cheap And Save received a note attached to its most recent invoice informing it that the contract was in error. The wholesaler's policy was that only purchases in excess of 1000 kg were entitled to the quantity discount of 15%. The invoice showed the full amount owing for the most recent purchase of 650 kg with no discount applied and also a cumulative amount equal to the 15% discount which had been granted to Cheap And Save on all previous orders. Cheap And Save refused to pay the extra amount. Discuss the arguments which may be raised by the parties. (4 marks) Render a decision. (2 marks) Question 2- 6 marks There are requirements predetermined by law to make a contract binding and, therefore, legally enforceable. With your knowledge of the process of arriving at a contract, explain how that process relates to the legal solidification of a contract. (6 marks) Question 3- 6 marks Rose Asphalt Co. Ltd. had been informed of upcoming requirements of the Ministry of Transportation for the supply of $600 000 worth of asphalt for a nearby road project. To comply with the requirements for tenders, Rose Asphalt was required to have their bid submitted to the Minister of Transport no later than 3 p.m. on October 2nd of that year. Rose Asphalt prepared their bid, and contacted Michelet Couriers Limited and requested them to pick up the envelope. Michelet attended at the Rose offices at 12 noon on October 1, and their driver was met by an engineer of Rose Asphalt. "I do not know if you can do this or not, but this must get to the addressee by 3 p.m. tomorrow. If you can do it, that's great, it will save me driving up myself." In response the driver said, "Well, we have our noon next day service." The engineer answered, "Well, noon would be 3 hours grace, do you have any problem doing that?" The driver responded, "They probably build in a little lead time anyway, but I do not think they would advertise it if we could not come through." The engineer nodded and the driver handed him the bill of lading. The engineer filled it out, marked it as a tender, and removed his copy. On it was a clause which read in fine print, "Max
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