Reference no: EM132206943
1. Chandler brought his car into Ben’s Auto Garage for servicing. Their oral agreement was that Chandler’s car would be given a tune-up, an oil change, tire rotation, and would have a tail-light replaced for a total of $500.00. When Chandler arrived to pick up his car, he noticed that all the work was done except the tail-light had not been replaced. Ben stated they didn’t have the necessary part to do the repair. Chandler refused payment to the garage because the garage was in breach of contract and had failed to fulfill their promise. Ben’s Auto Garage seeks to enforce the original contract for $500.00. You’re the judge, what’s your ruling?
a) The garage cannot sue to enforce their agreement since their obligation under the contract hasn’t been discharged.
b) The garage cannot sue to enforce their agreement for $500.00 under the contract but they may sue for the reasonable value of the services they did provide.
c) The garage has substantially performed their agreement and may collect the $500.00 owed to them under the agreement.
d) The garage cannot enforce the agreement because of the statute of frauds.
e) The garage may enforce the agreement because they’ve substantially performed but their award of $500.00 will be reduced by the reasonable value of replacing the taillight.
2. Suppose you are the chief strategist of a large bank. Say, it is a Fortune 500 company. The CEO asks you to recommend some reading material to her direct reports. She says that the reading material should preferably not be about businesses but one from which businesses can learn important lessons. You have decided to recommend the book chapter “Catastrophic failure, The French army and air force, May–June 1940” to her direct reports. Which of the following statements will you make about this reading as you introduce it to her. Identify the statement below that best captures what the reading is about.
a. Your direct reports should read this because it captures succinctly the relationship between spending on new technologies and the benefits of such spending.
b. Your direct reports will learn about the benefits of careful capital budgeting when planning to acquire new, expensive technologies.
c. Your direct reports will learn - when there is a swift and significant change in the technologies employed by our competitors, it is quite possible that there is an equally significant change in the strategy that they will adopt compete with (or disrupt) us.
d. Sudden changes in strategy are expensive and require careful capital budgeting.
e. A sudden and swift change in strategy favors the weaker party in a competitive situation.
3. Damages to be paid in case of a breach that are specified in a contract are known as:
a) nominal damages.
b) consequential damages.
c) liquidated damages.
d) breach payments.
4. Roger entered into a valid contract with Lisa to have his whole house painted for $4,000. After Lisa painted half of Roger’s house, Roger informed Lisa that he could not pay her for her services. Lisa told Roger that they had a valid contract and that she was going to hold up her half of the deal and paint the whole house. Lisa painted the entire house and submitted a bill for $4,000 to Roger. Lisa is entitled to:
a) $4000, the value of the contract, less any expenses that Lisa could have avoided incurring after Roger told her he would not honor their agreement.
b) $4,000 (the amount Roger promised to pay in the contract).
c) the reasonable value of painting the entire house on a quasi-contract basis.
d) nothing because she didn’t accept Roger’s rescission.