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STUDENT ID # ____________________ THESE EXAMINATION QUESTIONS MUST BE RETURNED AT THE END OF THE EXAMINATION. SANTA CLARA UNIVERSITY
SALES
FEBRUARY 7, 1998 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 materials 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 two questions, each of which will be afforded approximately equal weight in determining a grade.
Question 1 For ten years after his graduation from college, Robert had been a sales representative for Worlds of Knowledge Encyclopedia, Inc., selling encyclopedias door-to-door. With financial help from his in-laws, he recently decided to open a 1950's style coffee shop. In one of his last door-to-door sales visits, he met Barbara. Barbara owns and operates a local pub. Several years ago, Barbara relocated an operable old fashioned juke box from the pub to a basement playroom in her house, for use by her teenage daughter and her daughter=s friends. Recently, Barbara=s daughter left for college. Barbara wasn=t interested in an encyclopedia, but she and Robert talked about Robert purchasing the juke box, for $2,500, for his soon to be opened coffee shop. A few days after that conversation, Robert sent Barbara an e-mail message reading as follows: ``To: Barbara Confirming our juke box deal. The coffee shop opens in three weeks." When Barbara receives e-mail, her computer displays the name of the sender and the subject line. To open and read her e-mail, Barbara needs to point her mouse to the subject line and click. A day after Robert sent the e-mail, Barbara looked at the computer display of her e-mail messages. However, because she was about to leave to visit her daughter, she did not open the e-mail. She returned a week later, but didn't open her e-mail for another week. When she finally read Robert's message, two weeks after it was sent, she replied: ``To: Robert My daughter wants the juke box. No deal." Robert called Barbara and they had an unpleasant conversation in which Robert claimed that the two had a deal and Barbara denied ever reaching a final agreement. Robert opened his coffee shop without the juke box. After carefully shopping the juke box market, he was able to find another, comparable, juke box for $5,000. He has sought your advice to see whether he can recover any money from Barbara, including what he estimates to be about $1,000 in lost profits because of early customers who left without buying a meal when they discovered that the heavily advertised juke box was not yet in place. What is your advice?
Question 2 Lincoln and Brooks, a law firm, were opening a new law office in Chicago. It placed an order for a specially manufactured $25,000 oak conference table, with hand carved scales of justice on each of the four legs. The seller, Specialty Products, agreed to deliver the conference table to the law firm conference room no later than January 10, 1998, a day before a buffet luncheon for important clients. Specialty Products delivered the table at 4:00 p.m. on January 10, 1998, but the first person to notice a rather prominent gouge on one of the scales of justice on one leg of the conference table was a law firm partner who noticed the gouge at 10:00 a.m. the next morning as he was greeting the caterers who had arrived to set up the buffet. The partner decided to use the conference table for the luncheon anyway because the only alternative was to hold the luncheon in the firm library, losing both the magnificent view from the conference room and displacing associates busy with their research. The partner asked his secretary to call Specialty Products about the gouge, but she wasn't able to reach them until after the luncheon had been concluded. Specialty Products told her (truthfully) that they had been unaware of the gouge and would send somebody to repair it the next day. Prior to the luncheon, one of the caterers lost his balance carrying a hot dish, falling onto the table with dish in hand and leaving a burn and gouge on the conference table top. The luncheon proceeded, the burn and gouge concealed by a strategically placed trivet. When Specialty Products arrived the next day, they said that they could repair the gouge such that no one would notice the repair unless kneeling directly in front of the gouge and that they could repair the burn and gouge on the table top with only a slightly noticeable discoloration. Upon hearing this, the managing partner declined the repairs and told Specialty Products to take the table back and give them a new one for the same price. Specialty Products refused and billed the law firm $25,000. The law firm, without further use of the conference table, hired a warehouse to pick up and store the table, and, after two months of unsuccessful negotiation with Specialty Products, advertised and then sold the table for $10,000. Specialty Products then sued the law firm to recover $25,000. You are an associate in the law firm and have been asked by the managing partner to assess the rights and liabilities of the parties. What is your assessment?
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