MFC 365 Lecture Notes - Lecture 2: Sustainable Organic Integrated Livelihoods, Automotive Products, Wood Preservation

62 views5 pages

whitetrout713

12 Oct 2017

School

University at Buffalo

Department

Millard Fillmore College

Course

MFC 365

Professor

Coyle

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

The property condition disclosure act requires the seller of. Residential real property to cause this disclosure statement or a. Copy thereof to be delivered to a buyer or buyer"s agent prior to. The signing by the buyer of a binding contract of sale. Purpose of statement: this is a statement of certain conditions and. Information concerning the property known to the seller. Disclosure statement is not a warranty of any kind by the seller or. By any agent representing the seller in this transaction. Substitute for any inspections or tests and the buyer is encouraged. To obtain his or her own independent professional inspections and. Environmental tests and also is encouraged to check public. A knowingly false or incomplete statement by the seller on this. Form may subject the seller to claims by the buyer prior to or after. In the event a seller fails to perform the duty. Prescribed in this article to deliver a disclosure statement prior to.

Related Questions

Target Statement for Assignment 8

When IT procurement managers do business across a transnational border (or choose which borders to negotiate across) it will be helpful for managers to be aware of what restraints or pressures exist on both sides of the border that will affect the negotiated price of the product or service being acquired. The understanding that Garrettâs entire pricing theory depends on the macroeconomic (and hence also political) environment emerges from considering relations between contract pricing and economic theory, specifically, the âreservation priceâ and âeconomic calculation problemâ.

A fixed-price strategy in Garrettâs account does not mean a price that is fixed legally; it means a price that is determined by negotiation between free parties, such as is described in Ch. 8, pp. 105-106. That is, in Garrettâs pricing theory there is a transaction pricing calculation performed on each side of the transaction. Contract pricing is a decision, about which what matters is not the type of contract but the locus of the decision, that is, who makes the decision, and under what constraints?

Garrettâs Chapter 8 answers: buyer and seller make the decision. In a free-market economy, the pricing decision would be entirely an outcome of their negotiation. In an interventionist economy, the decision is in part an outcome of the buyer-seller negotiation; however, the cost of such interventions as taxes, regulations, currency instability, or contract impairment by monetary inflation, and any price caps or floors are built into or reflected by the sellerâs offering price.

In free market economic planning where there is zero central economic planning, a first approximation to a contract price that is freely set by buyer and seller is the reservation price or âwalk-awayâ price for the buyer. The seller, too, has a âwalk-awayâ price. The negotiation can only occur, resulting in a contract, in the interval between the two. Buyer and seller make a decision through a negotiation based on the sellerâs estimate of the cost of performance and the buyerâs estimate of what price the market, established by other potential sellers, would bear -- both estimates being a function of history.

According to the economic calculation problem described by the economist Ludwig Von Mises, a freely agreed upon price that reflects the combination of the buyerâs and sellerâs needs or desires is based on a calculation of the type that cannot be performed in a condition of central economic planning by a government. Under central economic planning, or socialism, price determination is not a function of trading history, or of the sellers' willingness to sell or the buyers' willingness to buy at a given price, rather it is either an arbitrary or politically-influenced decision. Such central economic planning, Von Mises observes, replaces economic calculation â the statistical aggregate of all individual actions by buyers and sellers who freely set prices by their own transaction pricing calculations.

Under the free market modeled in the theory of Von Mises, contract pricing relies on the absence of such market intervention so that buyer and seller are totally free to set a price that allows a contract to occur in the interval between the seller's and buyer's respective walkaway prices. This decision of both parties to agree on a price in that interval is one component of economic calculation â a component that applies to a single trade or transaction and contributes to the statistical aggregate which, in turn, tends to govern resource allocation so as to bring supply and demand into alignment.

To a lesser extent, contract pricing described by Garrett in Chapter 8 relies largely on the absence of central economic planning. Why? Because when the state intervenes it either substitutes its decision for that of the buyer and seller, or at a minimum imposes price controls that either foster shortages or surpluses or else tend to preclude the contract from ever happening if the controlled price is below the sellerâs cost estimate.

Under contract pricing as described by Garrett, the parties to the contract are still able to perform calculations of reservation (walkaway) prices and determine whether they can do the deal at some price in the interval that does not cause either to walk away. However, in a market that is only partially free, interventions such as regulations, taxes, currency exchange fluctuations, or monetary inflation that increase the sellerâs cost do alter the pricing calculation and tend to narrow the interval within which the buyer and seller can come to agreement. That still-intact possibility of agreeing on a price sensitive to market conditions is the essence of the relationship between the economic theory of Von Mises and the contract pricing theory of Garrett.

chocolateraven16

Learning Activity 1

This assignment focuses on UCC contracts.

Scenario: Landmark Company is a US-based business that sells iron tables to retailers in the US. The tables are purchased from individual metalsmiths, from US wholesale suppliers, and suppliers in Mexico.

Landmark ordered by telephone 300 iron tables to be shipped by April 1 from Metal Elements, Inc., another US company. No other sales terms were discussed. Landmark followed up the telephone call with an email to Metal Elements confirming the number of tables in the order and the delivery date, but did not discuss price. Metal Elements did not respond but shipped the tables as ordered to Landmark by April 1 at a price of $700 each, totaling $210,000.

Landmarkâs new Director of Purchasing, Payton Mann, is concerned about whether Landmark is bound to accept the tables from Metal Elements since Landmark had no formal acceptance or written correspondence Metal Elements. Payton is also concerned about the price of the tables which is higher than she had expected to pay. She emails you, one of the Landmark owners, to explain the situation with Metal Elements and to seek your advice about the sales.

Respond to Payton via email including:

A. An analysis and explanation of whether this is a valid contract between Landmark and Metal Elements, and why or why not; suggest to Payton how this situation should be handled;

B. For Paytonâs future information, include in the email a hypothetical situation in which the same facts apply as in the Landmark â Metal Elements order except that, upon inspection, fifty of the tables delivered from Metal Elements were damaged; provide an analysis of Landmarkâs options and suggestions for resolving this situation with Metal Elements.

Sources: Saylor: Advanced Business Law and the Legal Environment

Chapter 8: Formation of Sales and Lease Contracts, Uniform Commercial Code, Contracts for Sale of International Goods (CISG)

Chapter 9: Title, Risk and Insurable Interest

Chapter 10: Performance, Breach of Sales Contracts and Remedies

Chapter 11: Sections 11.1-11.7 (Warranties and Product Liability)

Week 5 Overview

SALES AND LEASE CONTRACTS

Formation of Sales and Lease Contracts, Uniform Commercial Code, Contracts for Sale of International Goods (CISG)

Introduction: Contracts for the sale and lease of goods are based primarily on the Uniform Commercial Code (UCC), rather than common law contract principles. UCC Article 2 and Article 2A govern contract formation for the sale and lease of goods. The goal of the UCC is to provide a relatively simple, straightforward guide to commercial transactions without the formality and inflexibility required to validly form other types of contracts. The UCC has been adopted in all states; Louisiana has not adopted Articles 2 and 2A. Because globalization has increased the scope and number of international sales transactions, the United Nations Convention on Contracts for the International Sale of Goods (CISG) is a model uniform law that applies for those nations that have adopted it.

Title, Risk, and Insurable Interest

Introduction: The UCC addresses and clarifies the concepts of identification of specific goods to a contract, when risk of loss for goods passes from a seller to a buyer, and which party to a sales contract holds an insurable interest in goods. Under the UCC, typically title and risk of loss for the goods in a specific transaction pass from a seller or lessor to a buyer or lessee according to specific terms in the contract between the parties. Parties to sales and lease agreements often have insurance to protect against damage, loss, or destruction of goods.

Performance, Breach of Sales Contracts, Remedies

Introduction: Under a sales or lease contract subject to the UCC, the seller or lessor has the basic duty to transfer and deliver the goods according to the contract terms, and the buyer or lessee has the basic duty to accept and pay for the goods. Parties may also be bound to implied terms based on customs within an industry, or based on prior contracts and dealings between the parties. When a contract is breached, the non-breaching party has available remedies under the law, such as retaining the goods or requiring the breaching party to perform under the contract. As with common law contract principles, remedies are designed to put the non-breaching party in essentially the same position as if the contract had not been breached.

Warranties and Product Liability

Introduction: A warranty is a promise, or guarantee, by a seller or lessor that certain facts are true of the goods being sold or leased. Types of warranties include (1) warranties of title guaranteeing that the goods have clear and valid title, (2) express warranties promising specific facts about the goods, and (3) implied warranties of merchantability, or fitness for a particular purpose. A warranty creates a legal duty for the seller or lessor; a non-breaching party can recover damages for breach of warranty(ies). Because warranties are associated with the sale or lease of products, breach of warranty claims are a part of product liability claims and manufacturers and sellers of goods can be held liable for breach of warranty for defective products. Warranties are subject to regulation under the UCC, product liability tort law, contract law, and the Magnuson-Moss Warranty Act.

Comparison of Common Law vs. UCC Contracts

Introduction: Common law contract principles are stringent, specific, relatively rigid and rules-laden, and require clarity in the formation and performance of agreements. Common law contract rules focus on protecting the rights and interests of parties to an agreement. UCC contract principles are more flexible, looser, permit implied terms in agreements, focus on âkeeping the deal togetherâ, and expediting business transactions. The UCC rules rely on prior dealings between the parties, customs within an industry, and reasonableness to complete contracts that may have omitted or implied terms. Both common law and UCC principles are based on fairness for the parties, and provide remedies, such as compensatory damages or specific performance, for contract breach. The goal of remedies for breach under both common law and the UCC contracts is to restore the non-breaching party to essentially the same position as if there had been no breach.

Professional baseball teams earn substantial revenues through ticket sales. To maximize profit, they offer significantly lower ticket prices for children (whose demand is elastic) than for adults (whose demand is inelastic). This discount may be as much as 50 percent.

If this type of price discrimination increases revenue and profit, why don't teams also price discriminate at the concession stands? Why don't they offer half-price hot dogs, soft drinks, peanuts, and Cracker Jack to children?

The answer involves the three requirements for successful price discrimination. All three requirements are met for game tickets: (1) The team has monopoly power; (2) it can segregate ticket buyers by age group, each group having a different elasticity of demand; and (3) children cannot resell their discounted tickets to adults.

It's a different situation at the concession stands. Specifically, the third condition is not met. If the team had dual prices, it could not prevent the exchange or resale of the concession goods from children to adults. Many adults would send children to buy food and soft drinks for them: Here's some money, Billy. Go buy six hot dogs. In this case, price discrimination would reduce, not increase, team profit. Thus, children and adults are charged the same high prices at the concession stands. (These prices are high relative to those for the same goods at the local convenience store because the stadium sellers have a captive audience and thus considerable monopoly power.)

Finally, price discrimination often occurs in international trade. A Russian aluminum producer, for example, might sell aluminum for less in the United States than in Russia. In the United States, this seller faces an elastic demand because several substitute suppliers are available. But in Russia, where the manufacturer dominates the market and trade barriers impede imports, consumers have fewer choices and thus demand is less elastic.

First, give your own thoughts on the above analysis of the concept of Price Discrimination. Second, give some concrete examples from your own life where you have been confronted by situations of Price Discrimination. Finally are there some forms of Price Discrimination that should be illegal?

magentaeagle184

MFC 365 Lecture Notes - Lecture 2: Sustainable Organic Integrated Livelihoods, Automotive Products, Wood Preservation

Document Summary

Get access

Related Documents

MFC 365 Lecture 1: VL_Rider

LAW 792 Lecture Notes - Lecture 12: Caveat Emptor, Precontract, Disclose

ACC 296 Lecture Notes - Lecture 8: Escrow, Escheat, Adverse Possession

Related Questions