Redd is the owner of an art gallery in Amsterdam. He has what he has always believed was a Rembrandt painting in his gallery. However, the Rembrandt Project has recently added this painting to the list they are currently reviewing, because they are of the opinion it may not be authentic. Learning this, Redd wants to sell the Rembrandt now before any official ruling on its authenticity. Redd remembered that his colleague, Blathers, was the curator for the Art Gallery of Ontario (AGO). Blathers mentioned to him at a show last year that the AGO was very interested in acquiring a Rembrandt for its collection. Redd decided to take Blathers up on this offer. He sent Blathers a standard form used by art dealers setting out a sale for the Rembrandt for $2.7m. He sent it to Blathers by fax on Friday, September 27. The form indicates that Redd will hold the painting until a response is received by October 27. Blathers saw the fax on Monday, September 30 and became exhilarated. He filled out the portions of the form left blank for him and agreed to have the AGO purchase the Rembrandt from Redd for $2.7m. Blathers sent the form back to Redd by mail on October 1. Unfortunately, he made a mistake with one number in the address line, so it ended up being sent to another address. The recipient threw it in the garbage. Redd never received Blathers' mail. Very happy about the purchase, Blathers left for a three week holiday on October 2. Not hearing back from Blathers, Redd figured he was not interested, so on October 7 he put an ad in a special art dealers journal stating: “For sale, one Rembrandt painting. Price: $2.7million.” While on holiday, Blathers meets up with his Celeste, who is also a museum curator of sorts. Celeste tells Blathers that she saw an ad placed by Redd in the Museum Curator’s Quarterly offering his Rembrandt painting for sale. Blathers was upset, and telephoned Redd. He left Redd a voicemail on October 12 stating that he mailed back the form on October 1 indicating his willingness to buy the painting, which he expected him to honour. In the meantime, on October 10, the Rembrandt Project got back to Redd with their verdict on the painting’s authenticity – they deemed that the painting was not an authentic Rembrandt. Learning of this, Redd became worried that the reputation of his gallery would suffer if he kept the painting, but he also could not afford to sell the painting for less than the cost of a true Rembrandt. 2 days later, Redd picked up Blathers’ message that the form had become lost in the mail, and that he was still interested in buying the painting from him. Redd felt relieved, and closed the deal with Blathers, selling him the alleged Rembrandt painting for $2.7 million. A couple of months later, a member of the board of the Rembrandt Project is visiting the AGO. He spots the inauthentic Rembrandt on the wall, and informs Blathers at once. Blathers is devastated, and wants to sue Redd for selling him an inauthentic painting. QUESTION In your answer, please respond to and discuss the following: •

1.Identify the elements of the contract that were present in the contract’s formation

2.Explain any issues with the communication of the offer or its acceptance

3. Explain what Redd did wrong in the context of contract law, and what Blathers options for recovery would be

Case: Buckeye Check Cashing, Inc. v. Camp[1] Facts: On October 12, Shawn Sheth and James Camp agreed that Camp would provide services to Sheth by October 15. In payment, Sheth gave Camp a check for $1,300 that was postdated October 15. On October 13, Camp sold the check to Buckeye Check Cashing for $1,261.31. On October 14, fearing that Camp would violate the contract, Sheth stopped payment on the check. Also, on October 14, Buckeye deposited the check with its bank, believing that the check would reach Sheth's bank on October 15. Buckeye was unaware of the stop payment order. Sheth’s bank refused to pay the check. Buckeye filed suit against Sheth. The trial court ruled that, because Buckeye was a holder in due course, the check was valid and Sheth had to pay Buckeye. Sheth appealed. Issues: Was Buckeye a holder in due course? Must Sheth pay Buckeye? Excerpts from Justice Donovan’s Decision: At issue is whether Buckeye acted in "good faith" when it chose to honor the postdated check originally drawn by Sheth. "Honesty in fact" is defined as the absence of bad faith or dishonesty with respect to a party's conduct within a commercial transaction. Under that standard, absent fraudulent behavior, an otherwise innocent party was assumed to have acted in good faith. The "honesty in fact" requirement, also known as the "pure heart and empty head" doctrine, is a subjective test under which a holder had to subjectively believe he was negotiating an instrument in good faith for him to become a holder in due course. [H]owever, the Ohio legislature amended the definition of "good faith" to include not only the subjective "honesty in fact" test, but also an objective test: "the observance of reasonable commercial standards of fair dealing." A holder in due course must now satisfy both a subjective and an objective test of good faith. Check cashing is an unlicensed and unregulated business in Ohio. Thus, there are no concrete commercial standards by which check cashing businesses must operate. Buckeye argues that its own internal operating policies do not require that it verify the availability of funds, nor does Buckeye apparently have any guidelines with respect to the acceptance of postdated checks. Under a purely subjective "honesty in fact" analysis, it is clear that Buckeye accepted the check from Camp in good faith and would therefore achieve holder in due course status. When the objective prong of the good faith test is applied, however, we find that Buckeye did not conduct itself in a commercially reasonable manner. [T]he presentation of a postdated check should put the check cashing entity on notice that the check might not be good. Some attempt at verification should be made before a check cashing business cashes a postdated check. Such a failure to act does not constitute taking an instrument in good faith under the current objective test of "reasonable commercial standards." This court in no way seeks to curtail the free negotiability of commercial instruments. [However, without] taking any steps to discover whether the postdated check issued by Sheth was valid, Buckeye failed to act in a commercially reasonable manner and therefore was not a holder in due course. Judgment reversed, and cause remanded.

How does giving someone a postdated check offer the drawer any protection? How does it give rise to any “notice that the check might not be good”?

Do you think the court reached the right result? Why or Why not?

If Camp had taken the check to Sheth’s bank to cash it, what would have happened?

Question: Facts: Bill, a contractor in Brentwood, New York, prepared a bid for construction of an office bu... Facts: Bill, a contractor in Brentwood, New York, prepared a bid for construction of an office building for Fred. In preparation of his bid, Bill asked Sam, a tile manufacturer in Setauket, New York, for a quote on tile to Bill's specifications. On October 27, 2006, Sam returned a statement on his letterhead with a quote of $8,000.00 which stated that the quote was irrevocable. Although Bill did not tell Sam, Bill submitted a bid for the building on November 11, 2006, using Sam's quote as the basis for part of his bid. On January 8, 2007, after the price of tile had increased, Sam told Bill that he was revoking his offer. On January 9, 2007, Bill was awarded the contract to build the office building. Bill demanded that Sam deliver tile as per Sam's offer, but Sam refused. Bill thereupon purchased tile to his specifications from Ted, another tile manufacturer, for $9,000.00. Bill also needed doors for the office building. He contacted Steve, a door manufacturer in Syosset, New York, and placed an order for doors at a cost of $6,000.00, F.O.B. Syosset. Steve entered into a contract, which was reasonable, with a common carrier for the transportation of the doors from Syosset to Brentwood. While the doors were en route, the truck in which the doors were being transported was struck by lightning. The doors were completely destroyed. Bill refused Steve's demand for payment. Steve refused to supply Bill with replacement doors. Bill obtained replacement doors from Tom, another door manufacturer, for a cost of $7,000.00 which was then the current market value for doors meeting Bill's specifications. Bill and Susan, a window manufacturer in Stony Brook, New York, entered into a written contract whereby Susan agreed to provide windows to Bill's specifications no later than October 23, 2007, for a cost of $12,000.00. Susan's profit on the sale to Bill was $2,000.00. Susan has thousands of windows in stock, and can supply anyone with as many windows as he or she needs, at any time. On October 15, 2007, Susan delivered windows to Bill; however, the windows did not conform to Bill's specifications. Bill refused the windows and notified Susan in writing that day that he refused the windows. On October 16, 2007, Susan notified Bill that she would cure the non-conforming tender of goods. On October 18, 2007, Susan delivered new windows to Bill which conformed to Bill's specifications, but Bill had already purchased the windows he needed from Tina, another window supplier, for $11,500.00, on October 17, 2007, and Bill refused to accept Susan's second delivery of windows. Susan sold the windows to Frank, another buyer, for $12,000.00. Bill seeks damages from Sam, Steve and Susan. Steve and Susan seek damages from Bill.

Steve was discharged by impossibility when the doors were destroyed by lightning during transportation to Bill. True or False?

Bill is entitled to receive the full contract price of $6,000.00 from Steve. True or False?

Susan delivered defective windows to Bill on October 15, 2007. True or False ?

Susan is a lost volume seller since she had thousands of windows in stock and could supply anyone with as many windows as they need, at any time. True or False?

Susan is entitled to recover the full contract price of $12,000.00 from Bill. True or False?

Question: Facts: Bill, a contractor in Brentwood, New York, prepared a bid for construction of an office bu... Facts: Bill, a contractor in Brentwood, New York, prepared a bid for construction of an office building for Fred. In preparation of his bid, Bill asked Sam, a tile manufacturer in Setauket, New York, for a quote on tile to Bill's specifications. On October 27, 2006, Sam returned a statement on his letterhead with a quote of $8,000.00 which stated that the quote was irrevocable. Although Bill did not tell Sam, Bill submitted a bid for the building on November 11, 2006, using Sam's quote as the basis for part of his bid. On January 8, 2007, after the price of tile had increased, Sam told Bill that he was revoking his offer. On January 9, 2007, Bill was awarded the contract to build the office building. Bill demanded that Sam deliver tile as per Sam's offer, but Sam refused. Bill thereupon purchased tile to his specifications from Ted, another tile manufacturer, for $9,000.00. Bill also needed doors for the office building. He contacted Steve, a door manufacturer in Syosset, New York, and placed an order for doors at a cost of $6,000.00, F.O.B. Syosset. Steve entered into a contract, which was reasonable, with a common carrier for the transportation of the doors from Syosset to Brentwood. While the doors were en route, the truck in which the doors were being transported was struck by lightning. The doors were completely destroyed. Bill refused Steve's demand for payment. Steve refused to supply Bill with replacement doors. Bill obtained replacement doors from Tom, another door manufacturer, for a cost of $7,000.00 which was then the current market value for doors meeting Bill's specifications. Bill and Susan, a window manufacturer in Stony Brook, New York, entered into a written contract whereby Susan agreed to provide windows to Bill's specifications no later than October 23, 2007, for a cost of $12,000.00. Susan's profit on the sale to Bill was $2,000.00. Susan has thousands of windows in stock, and can supply anyone with as many windows as he or she needs, at any time. On October 15, 2007, Susan delivered windows to Bill; however, the windows did not conform to Bill's specifications. Bill refused the windows and notified Susan in writing that day that he refused the windows. On October 16, 2007, Susan notified Bill that she would cure the non-conforming tender of goods. On October 18, 2007, Susan delivered new windows to Bill which conformed to Bill's specifications, but Bill had already purchased the windows he needed from Tina, another window supplier, for $11,500.00, on October 17, 2007, and Bill refused to accept Susan's second delivery of windows. Susan sold the windows to Frank, another buyer, for $12,000.00. Bill seeks damages from Sam, Steve and Susan. Steve and Susan seek damages from Bill.

Steve was discharged by impossibility when the doors were destroyed by lightning during transportation to Bill. True or False?

Bill is entitled to receive the full contract price of $6,000.00 from Steve. True or False?

Susan delivered defective windows to Bill on October 15, 2007. True or False ?

Susan is a lost volume seller since she had thousands of windows in stock and could supply anyone with as many windows as they need, at any time. True or False?

Susan is entitled to recover the full contract price of $12,000.00 from Bill. True or False?

The following items were selected from among the transactions completed by O’Donnel Co. during the current year: Jan. 10. Purchased merchandise on account from Laine Co., $366,000, terms n/30. Feb. 9. Issued a 30-day, 6% note for $366,000 to Laine Co., on account. Mar. 11. Paid Laine Co. the amount owed on the note of February 9. May 1. Borrowed $198,000 from Tabata Bank, issuing a 45-day, 8% note. June 1. Purchased tools by issuing a $270,000, 60-day note to Gibala Co., which discounted the note at the rate of 6%. 15. Paid Tabata Bank the interest due on the note of May 1 and renewed the loan by issuing a new 45-day, 6.5% note for $198,000. (Journalize both the debit and credit to the notes payable account.) July 30. Paid Tabata Bank the amount due on the note of June 15. 30. Paid Gibala Co. the amount due on the note of June 1. Dec. 1. Purchased office equipment from Warick Co. for $400,000, paying $108,000 and issuing a series of ten 8% notes for $29,200 each, coming due at 30-day intervals. 15. Settled a product liability lawsuit with a customer for 320,000, payable in January. O’Donnel accrued the loss in a litigation claims payable account. 31. Paid the amount due Warick Co. on the first note in the series issued on December 1. Required: 1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to the nearest dollar. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: A. Product warranty cost, $29,000. B. Interest on the nine remaining notes owed to Warick Co. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to the nearest dollar. 1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Scroll down to access page 12 of the journal. Round your answers to the nearest dollar. How does grading work? PAGE 11 JOURNALACCOUNTING EQUATION Score: 316/360 DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 ✔ ✔ ✔ 2 ✔ ✔ 3 ✔ ✔ ✔ 4 ✔ ✔ 5 ✔ ✔ ✔ 6 ✔ ✔ 7 ✔ ✔ 8 ✔ ✔ ✔ 9 ✔ ✔ 10 ✔ ✔ ✔ 11 ✔ ✔ 12 ✔ ✔ 13 ✔ ✔ ✔ 14 ✔ ✔ 15 ✔ ✔ 16 ✔ ✔ 17 ✔ ✔ ✔ 18 ✔ ✔ 19 ✔ ✔ 20 ✔ ✔ 21 ✔ 22 ✔ ✔ 23 ✔ 24 ✔ 25 ✔ ✔ 26 ✔ 27 ✔ ✔ 28 ✔ 29 ✔ Points: 60.57 / 69 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles): A. Product warranty cost, $29,000. B. Interest on the nine remaining notes owed to Warick Co. Assume a 360-day year. How does grading work? PAGE 12 JOURNALACCOUNTING EQUATION Score: 28/51 DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 ✔ 3 ✔ 4 ✔ 5 ✔ Points: 5.49 / 10 Feedback Check My Work If you were the borrower how much would you be leaving with in proceeds? What does the liability always have to be recorded at? As the lender what have you earned by doing business with O’Donnel Co.? As the lender what will you be receiving on the maturity date?

Draw a molecular orbital diagram for Mo(CO)6. What is the point group symmetry?

12. List and briefly describe incomplete dominance, co-dominance, pleiotropy, and polygenic inheritance.

Using CO as an example, explain the differences in MO theory bonding and VSEPR theory bonding.

If the cost of a medical visit/ co-pay increases, how does this affect the demand for this item?

(CO A) Describe any two of the three major characteristics of the fifth merger wave of the 1990s.