Contract law

1.  Using your personal workplace experience and your readings for this week, discuss why you believe it is important to study contracts as they relate to the private market system  (Reed, Pagattaro, Cahoy, Shedd, & Magid, 2015).  Include in your discussion how contract law provides flexibility and precision in business dealings?

2.  Based on your reading of chapter 9 or the text (Reed, Pagattaro, Cahoy, Shedd, & Magid, 2015) and considering how a contract can be legally discharged and when a contract can be breached, respond to the learning activity below.

As a new sales representative for Misco Equipment Corporation, you take a customer out to dinner. Before dinner is over, you have shaken hands on a deal to sell the customer nearly a half-million dollars’ worth of industrial equipment. In writing up the formal contract the next morning, you discover that you miscalculated the equipment’s price. Your error could cost Misco $60,000. You telephone your customer and explain the situation.

  • Is the “deal” you made an enforceable contract?
  • Assuming the contract is enforceable, does the mistake you made permit you to get out of the contract?
  • What do you think will happen in this situation?

3.  After reading chapter 14 of the text, Reed, Pagattaro, Cahoy, Shedd, and Magid (2015), respond to the questions raised in the learning activity below.

You and two of your college roommates have discussed plans to open a restaurant. You intend to attract college-age students who are health and fitness minded to your restaurant. You and your co-owners agree that each will invest equally in terms of time and money. However, in addition to contributions made by each of you, another $700,000 is essential for the restaurant to succeed.

  • What type of organization is best suited for this business activity? What factors should be considered in the selection of the best suited business organizational form?
  • Who will manage the restaurant during times that you and your co-owners re not present?
  • What liabilities do you and your co-owners face?

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