Question

Exercuse

Answer each question, and explain the basis for your answer

A furniture retailer purchased a shipment of furniture and signed a promissory note, which the furniture manufacturer sold to a finance company. The retailer found the furniture to be defective. Can the retailer decline to pay the note?

Response:

A customer expected to pay for a car with a payment she hoped to receive from her insurance company. The exact date of payment was indefinite. To accommodate her, the automobile dealer modified the promissory note by showing the due date as "on or about April 15" in order to allow a few extra days if the customer found that she needed them. Did this affect the negotiability of the note?

Response:

The proprietor of a small service firm located in leased quarters discovered an ideal location available for purchase. She gave the owner of the site a check for $500 pending the drawing up of a written agreement. Later that day, the owner received and accepted a higher offer for the same property. Can the proprietor force the property owner to convey the property to her?

Response:

A business owner told his agent to see if he could find a certain piece of equipment for $40,000 or less. The agent made a contract to purchase the equipment for $47,000. Who is responsible on the contract? Why? Are there possible circumstances that would change your answer?

Response:

Answer 1

1. The furniture retailer can decline to pay in following circumstances-

• If both the involved parties that is the furniture retailer and the furniture manufacturer have not signed the promissory note. In this case the promissory note stands void.
• If the terms and conditions mentioned in the promissory note clearly state that the furniture retailer can decline to pay if in case the furniture is defected

1. This cannot affect the negotiability of the note if the time period of “on or about April 15” (e.g.: 30-60 days depending on the attorney) is mentioned in the terms of payment. Further, if both the involved parties that is the seller and buyer sign the note, the negotiability stands still.
2. The conditions for proprietor to force the property owner to convey the property to her depends on the condition of the agreement signed by both property owner and the proprietor.
3. The responsibility of the contract will be dependent on the person who will sign the agreement. If the agent has the rights given by the business owner to sign the contract on his behalf then the business owner will be responsible. But this is again subjected to terms of agreement between the business owner and the agent. If the business owner signs the contract personally then he will be responsible for the extra payment.

The possible circumstances under which the changes in the above discussion can occur are based on the terms and conditions of the contract itself.