BUS 340 Module 3 Assignment Problems – Chapters 9, 10, 11, and 12

Chapter 9 Case
Study: Stephen Gall v. McKeesport
Municipal Water Authority
Stephen Gall and
his family became ill after drinking contaminated water supplied to their home
by the McKeesport Municipal Water Authority. They filed suit against the
utility, arguing, among other things, that the utility had breached the UCC
implied warranty of merchantability when it sold them contaminated water. The
utility moved to dismiss their complaint, arguing that since water was not
“goods,” the UCC did not apply. Should the Galls’ complaint be dismissed?

In 1994,
Schumacher and his wife and their two daughters moved to Finland, Minnesota, to
operate a bar and restaurant called the Trestle Inn, which was owned by his
parents. Schumacher claims that his parents induced him to leave his previous
job and to make the move by orally agreeing to provide him a job managing the
inn for life and to leave the business and a large parcel of land to him when
his first parent died. Schumacher was given free reign in managing the inn and
was allowed to retain all profits of the business but was not given any salary
or wage. While he was operating the inn, Schumacher used his own funds to build
a home for his family
on his parents’
land, install a well, buy equipment for the business, and develop various
marketing tools for the business. In the fall of 1998, Schumacher suspected
that his parents were about to sell the inn and the adjoining property. He
brought suit for a restraining order to prevent them from doing so, claiming
breach of contract and unjust enrichment, among other claims. In October 1998,
the parents notified Schumacher that his employment at the inn and his right to
possess the adjoining property were terminated. The parents moved for summary judgment.
The trial court held that Schumacher’s oral contract claim was invalid because
the contract needed to be in writing under applicable Minnesota law. However,
does Schumacher have a valid claim for unjust enrichment?

Chapter 10 Case Study: Pernal v. St. Nicholas Greek
Orthodox Church
Pernal owned a
parcel of real estate adjacent to property owned by St. Nicholas Greek Orthodox
Church. Pernal sent a letter to the
church indicating that he was offering it for sale for “$825,000 cash/mortgage,
‘as is,’ with no conditions, no contingencies related to zoning and 120 days
post closing occupancy for the present tenants.” This offer was dated June 3,
2003, and expressly provided that it would remain open for a two-week period.
On the same day, Pernal also sent
the same offer
to sell the property on the same terms to another prospective purchaser, White
Chapel Memorial Association Park Perpetual Care Trust. On June 4, the church
sent a letter indicating that it accepted the terms of the offer that Pernal
had set forth in his letter. However, the church’s letter also referenced an
attached purchase agreement. The purchase agreement
agreed with
Pernal’s purchase price and the close occupancy period, but contrary to the
offer, it contained additional terms. The church’s president signed this
attached purchase agreement, but defendant did not sign it. The offer by letter
dated June 3, 2003, did not reference other potential purchasers. On June 10,
White Chapel, by letter, offered to pay $900,000 cash for the property, with no
conditions or contingencies related to zoning and 180 days post closing
occupancy rent
free. On that
same date (June 10), Pernal sent a letter to both potential purchasers. This
letter indicated that “amended offers” had been received. The letter further provided
that the offer would remain open for two weeks’ time as provided in the initial
offering letter. On June 13, the church sent a letter to Pernal, stating that the
offer had been accepted on June 4, and that an enforceable contract was formed.
The church sued Pernal for breach of contract. Will it win?

Chapter 11 Case
Study: Cantu v. San Benito Consolidated Independent School
Cantu was hired
as a special education teacher by the San Benito Consolidated Independent
School District under a one-year contract for the 1990–91 school year. On
August 18, 1990, shortly before the start of the school year, Cantu
hand-delivered to her supervisor a letter of resignation, effective August 17, 1990.
In this letter, Cantu requested that her
final paycheck
be forwarded to
an address in McAllen, Texas, some 50 miles from the San Benito office where
she tendered the resignation. The San Benito superintendent of schools, the
only official authorized to accept resignations on behalf of the school
district, received Cantu’s resignation on Monday, August 20. The superintendent
wrote a letter accepting Cantu’s resignation the same day and deposited the
letter, properly stamped and addressed, in the mail at approximately 5:15 pm that
afternoon. At about 8:00 am the next morning, August 21, Cantu hand-delivered
to the superintendent’s office a letter withdrawing her resignation. This
letter contained a San Benito return address. In response, the superintendent
hand-delivered that same day a copy of his letter mailed the previous day to
inform Cantu that her resignation had been accepted and could not be withdrawn.
The dispute was taken to the state commissioner of education, who concluded
that the school district’s refusal to honor Cantu’s contract was lawful,
because the school district’s acceptance of Cantu’s resignation was effective when
mailed, which resulted in Cantu argued
that the mailbox rule should not apply because her offer was made in person and
the superintendent was not authorized to accept by using mail.Is this a good argument?

Chapter 12 Case Study: Tinker Construction v. Scroge
Tinker
Construction had a contract with Scroge to build a factory addition for Scroge
by a particular date. The contract contained a penalty clause exacting daily
penalties for late performance, and Tinker was working hard to complete the
building on time. Because prompt completion of the addition was so important to
Scroge, however, Scroge offered Tinker a bonus if it completed the factory
addition on time. Scroge also learned that the supplier of parts for machinery that
he had contracted for had called and said that it could not deliver the parts
on Scroge’s schedule for the price it had agreed to. Because there was no other
supplier, Scroge promised to pay the requested higher price. The factory
addition was completed on time and the parts arrived on time. Scroge then
refused to pay both the bonus to Tinker and the higher price for the parts.
Were these promises enforceable?