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Subject Topic: HELP! these two MCQ make me confused (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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thesame2
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Posted: 24 Jun 2009 at 23:27 | IP Logged  

these two MCQ are all about sales contract. I will list the questions briefly. I feel confused, because they seems to be contradictory.

1. On May 2, Handy Hardware sent Ram industries a signed purchase order that stated, in part, as follows, "ship for May 8 delivery 300 Model A-X socket sets at current dealer price. Terms 2/10/net 30" Ram received Handy's purchase order on May 4. On May5, Ram discovered that it had only 200 Model A-X socket sets and 100 Model W-Z in stock. Ram shipped A-X and W-Z without any explanation. The socket sets were received by Handy on May8.

Which of the following statements concerning the shipment is correct? (a)

a. Ram's shipment is an acceptance of Handy's offer.

b. Ram's shipment is a counteroffer.

c. Handy's order must be accepted by Ram in Writing before Ram ships the socket sets.

d. Handy's order can only be accepted by Ram shipping conforming goods.

2.Jefferson Hardware ordered 200 Ram hammers from Ajax Hardware. Ajax accepted in writing. Because don't have enough Ram hammers, Ajax sent 300 Strong hammers. Ajax stated on the invoice that the shipment was sent only as an accommodation. Which is correct? (c)

c. Ajax's shipment of Strong hammers is a breach of contract.

 

I am sooooooooooooo confused. These two are the similar situations. Why is the first one considered as acceptance while the second is taken as a breach of contract?

 



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bryris
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Posted: 25 Jun 2009 at 00:35 | IP Logged  

Based on the info you posted, I agree with you. I know the programs don't let you cut and paste, but can you clean up that first question a bit so we can see EXACTLY what it said?

It looks like the first question is a unilateral contract. In this case, acceptance occurs when performance BEGINS. I can see that Ram did make an attempt at accepting the order because it shipped something. But the goods were not conforming goods, so technically Ram is in breach of contract. I guess one could argue in support of answer (b). I will admit I do not see why (b) couldn't also be correct.

The second makes sense because the offer was expressly accepted. When the wrong stuff was sent, that constituted a breach.
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roswellpodsquad
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Posted: 25 Jun 2009 at 03:41 | IP Logged  

Question 1: With Sales Contracts, prompt shipment is a valid method of
acceptance. When the seller ships nonconforming goods is both an
acceptance and a breach of contract. Had the seller sent an accommodation
prior to shipment then it would have been a counteroffer.

Question 2: It also a breach of contract. Even though the seller notified the
buyer that the goods were sent only as an accommodation, the notice was
sent with the goods (the seller did not give the buyer reasonable notice) so
it is a plain only breach of contract situation and not a counteroffer.

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thesame2
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Posted: 25 Jun 2009 at 10:09 | IP Logged  

Hey, bryris, please see the original question now.

About roswellpodsquad's answer, do you mean that under both situations, the sellers both accept the offer and at the same time breach the contract?

 



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bryris
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Posted: 25 Jun 2009 at 10:22 | IP Logged  

Roswell.....good explanation.

The only thing I will add is that an accommodation IS NOT a counter offer (both a rejection of the original and an offer of the new) but rather a substitute performance outside of the original contract terms. Its purpose is to keep the original contract unaccepted (thus unbreached).
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