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STUDENT ID # ____________________
SANTA CLARA UNIVERSITY FINAL EXAMINATION
SALES MARCH 15, 1997
THE EXAMINATION RULES STATED IN THE CURRENT STUDENT HANDBOOK GOVERN THIS EXAMINATION, EXCEPT THIS IS A LIMITED OPEN BOOK EXAMINATION.
Instructions 1. Limited open book examination: During the examination you may consult books assigned for the course, handouts distributed in class, and any notes, outlines or other work product prepared by you either individually or in cooperation with other students registered in the class. You may not consult any other material during the examination. 2. Provide analysis supporting your conclusions. 3. There are four questions on this examination, the answers to which are worth a total of 65 points. At the beginning of each question we have indicated the total number of points available for the answer to each question and a roughly proportional time allocation for each question. The total time for taking the examination, 2 hours and 15 minutes, affords 10 additional minutes.
Question 1 (10 points) (20 minutes) Robert had owned a retail appliance store for forty years when he decided to retire. Following an inventory liquidation sale and termination of his lease, he was left with a few unsold appliances. He stored them in the basement of his residence while he advertised them for sale in the newspaper. Val, a veterinarian, responded to Robert's ad for the sale of a refrigerator which she intended to use in her clinic both to refrigerate vaccines for animals and to refrigerate soft drinks, lunches and dinners for herself and her employees. Val paid Robert 2 of the purchase price on a Sunday evening, and the two agreed that Val would pay the balance when she picked up the refrigerator. They agreed that she would pick up the refrigerator within the next few days. On Monday evening, a strong earthquake struck the area, and the refrigerator, still in Robert's basement, toppled and was destroyed. Val wants her down payment back and Robert wants the balance of the purchase price. What result and why?
Question 2 (20 points) (40 minutes) Kravitz and Hodge, a law firm (hereafter K & H), was opening a new law office in New York City. K & H ordered from Custom Craft a $15,000 conference table for the conference room. Under an express term of the written agreement of sale, Custom Craft was to deliver the table to the new office no later than March 15, in time for a March 20 reception for important new clients. Custom Craft delivered the table on March 17. The planned reception for new clients had been delayed until April 1 because some of the new clients could not make the March 20 reception. On March 16, K & H saw a comparable conference table, available from another vendor for $16,000, which it liked somewhat more than the Custom Craft table. This $16,000 table could be delivered on March 25. K & H purchased the $16,000 table. On March 18, K & H notified Custom Craft that K & H was not taking the Custom Craft table, citing delay in delivery, and requested that Custom Craft pick up the table or give other instructions for disposition. Custom Craft neither picked up the table nor gave instructions for disposition. Instead, it billed K & H $15,000, sending statements for the next three months and, when not paid, turning the bill over to a lawyer for collection. On June 15, K & H sold the Custom Craft table to another law office for $8,000 and sent a check for $8,000 to Custom Craft with a note explaining that K & H had sold the table on behalf of Custom Craft. Custom Craft wants $7,000 from K & H. K & H wants $1,000 from Custom Craft. Who prevails and why?
Question 3 (20 points) (40 minutes) Ruben's son had just been accepted to law school. The law school required all entering students to have a laptop computer. Ruben, not knowledgeable about computers, went to Computer Mart with the law school=s written specifications for laptop computers. He showed the specifications to a clerk in the computer hardware department of the store who, without reading the specifications very carefully, escorted Ruben to the store's selection of laptop computers and told Ruben: "Any of these ought to do the trick." The clerk was then called to the telephone and, before the clerk's return, Ruben had selected and purchased a laptop computer from among those the clerk had identified as suitable. The computer which Ruben selected did not come equipped with a CD-ROM drive. Ruben paid the $2,000 purchase price in full. When Ruben gave the computer to his son just before law school started, the son thanked his father profusely but told his father that the law school specifications required a CD-ROM drive because many of the new casebooks required CD-ROM. Ruben tried to return the laptop to Computer Mart for a refund but Computer Mart refused because it was now selling laptops with new super duper 3rd generation enhanced Pentium triple X memory chips. After notifying Computer Mart of his intentions, Ruben advertised the laptop in the local paper (at a price comparable to those being asked for similar models) and, after having received no responses to the ad for two weeks, sold it for $1300 ($200 less than the advertised price) to a co-worker in Ruben's office. In the meantime, Ruben purchased another laptop for his son which, although otherwise comparable to the laptop he had purchased from Computer Mart, met the law school's requirements because it included a CD-ROM drive. This second laptop cost $500 more than the laptop he had purchased from Computer Mart. Ruben has sued Computer Mart in small claims court. Should he prevail? Why? If so, to how much money is he entitled? Explain.
Question 4 (15 points) (25 minutes) Jason is the proprietor of a Navaho Arts and Crafts retail store in Sedona, Arizona. For the ten years he has been conducting this business, his inventory has consisted exclusively of items made by members of the Navaho tribe. Recently, a friend of Jason lent Jason a vase made by a member of the Sioux tribe (hereafter "Sioux vase") for Jason to display in the store to see if customers might be interested. Jason's friend told Jason to return the Sioux vase in a week or two. Jason took the Sioux vase to his store for display. On a day when Jason was home ill, Sal, another local merchant to whom Jason owed $500, noticed the Sioux vase in the store and thought it would make a nice gift for Sal's mother. A clerk in the store called Jason to ask the price of the Sioux vase and Jason, mistakenly believing that the clerk was referring to another vase which Jason also had recently brought to the store, told the clerk that the price was $1,000. Over the phone, Jason also agreed to Sal's proposal that Sal acquire the vase in exchange for extinguishment of the $500 debt which Jason owed Sal together with Sal's transfer to Jason of an antique desk which Jason had been coveting. After acquiring the Sioux vase, Sal gave it to his mother. The friend who had lent the Sioux vase to Jason noticed it in the mother's home. He asked the mother to return it to him but she refused. Is Jason's friend entitled to a return of the Sioux vase? Why or why not? If Jason's friend is entitled to a return of the Sioux vase, what claim, if any, does Sal have against Jason?
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