Advertisement in the newspaper

Assignment Help Financial Management

Reference no: EM131990124

Mighty Motors needed to sell cars at year-end, because sales were slow and it needed to make room for its 2005 vehicles. Mighty Motors placed the following advertisement in the newspaper:

BUY NOW! Buy a 2004 United Motor car now and, when the 2005 models come out, we’ll trade even for your 2004. Your 2005 model will be the same model, accessory group, etc., as the 2004 that you buy now. A sure thing for you—a gamble for us, but we’ll risk it! Hurry! This offer is good only during September. Buyer responsible for license, fees, and taxes.

Mr. and Mrs. Johnson were in the market for a new car. They visited Mighty Motors on September 20th. They bought a 2004 United Motors Stingbird on the same day. When the Johnsons got home, they saw for the first time the ad that is shown above. They looked at each other and smiled.

When the 2005 cars came out, the Johnsons went back to Mighty Motors and requested a 2005 United Motors Stingbird. Mighty Motors refused, stating that the Johnsons failed to tell the salesman that they were taking advantage of newspaper ad. They had even failed to mention the ad. The Johnsons sue. Who will win, and why?

Reference no: EM131990124

Questions Cloud

Heat and humidity are extremely high in the summer : Riley, a 71-year old man, lived in an area of the southern United States where the heat and humidity are extremely high in the summer.

Will silas be able to enforce the agreement : If Abraham fails to pay, will Silas be able to enforce the agreement? Explain.

Contract by which he promises to sell his guitar to jimmy : Eric, an adult, signs a written contract by which he promises to sell his guitar to Jimmy, a minor, for $500.

Difference between the present value of settlement : What is the difference between the present value of the settlement at 5 percent and 10 percent? Compute each one separately. U

Advertisement in the newspaper : Mighty Motors needed to sell cars at year-end, Mighty Motors placed the following advertisement in the newspaper:

What are the four key elements to arbitrage trading : What are the four key elements to arbitrage trading?

Assume interest rates in the market : Assume interest rates in the market (yield to maturity) decline from 14 percent to 10 percent. What is the bond price at 10 percent?

Now contemplating two separate capital structures for firm : Tanager, Inc. just hired a new chief financial officer who is now contemplating two separate capital structures for the firm.

Critical to healthcare organization financial health : Why is managing accounts receivable and collections so critical to a healthcare organization's financial health?

User Account

All Pages