Alexandra, Jane and Sukie decide to establish a new corporation in the New England region. Their...
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Alexandra, Jane and Sukie decide to establish a new corporation in the New England region. Their business-"Three Sisters Pottery"-would produce elaborate custom sculptures for commercial purposes. When just starting the company, their friend Daryl offered to work on behalf of the company to get things set up. Although they hadn't gone through the formalities of organizing the corporation yet, they were anxious to hit the ground running, so Jane authorized Daryl to begin searching for a kiln and clay supplier. Daryl contacted the company Big Fire Ceramics and ordered a kiln at the price of $1,695. He also entered into a contract to have Big Fire supply Three Sisters Pottery with low fire and medium fire grade clay, on a re- occurring basis, for two years. The contract included a "no other supplier" clause and also a provision for liquidated damages of $2,000 in the event of cancellation. Daryl signed the contract as "Daryl, Agent for Three Sisters Pottery." The next day, the three owners met and formally organized the corporation, but they did not review the contracts that Daryl signed, nor did they know who the supplier would be. When the kiln arrived at the Three Sisters shop, Alexandra signed for it and had it installed. The next day, Sukie started a project in the kiln, using some clay she had from home. Within a few days, the clay deliveries also began, and Alexandra, with the knowledge and approval of Jane and Sukie, accepted the deliveries and paid the invoices. A few months later, Jane discovers that Daryl had ordered from Big Fire Ceramics, and is upset because she believes them to be unreliable and expensive. Jane calls Big Fire and attempts to cancel the contract for the clay. Who is liable for the damages on the cancelled contract? a. Three Sisters Pottery only. b. Daryl only. c. Daryl and Three Sisters Pottery. O d. No liability for any of the parties. O Icon Key Alexandra, Jane and Sukie decide to establish a new corporation in the New England region. Their business-"Three Sisters Pottery"-would produce elaborate custom sculptures for commercial purposes. When just starting the company, their friend Daryl offered to work on behalf of the company to get things set up. Although they hadn't gone through the formalities of organizing the corporation yet, they were anxious to hit the ground running, so Jane authorized Daryl to begin searching for a kiln and clay supplier. Daryl contacted the company Big Fire Ceramics and ordered a kiln at the price of $1,695. He also entered into a contract to have Big Fire supply Three Sisters Pottery with low fire and medium fire grade clay, on a re- occurring basis, for two years. The contract included a "no other supplier" clause and also a provision for liquidated damages of $2,000 in the event of cancellation. Daryl signed the contract as "Daryl, Agent for Three Sisters Pottery." The next day, the three owners met and formally organized the corporation, but they did not review the contracts that Daryl signed, nor did they know who the supplier would be. When the kiln arrived at the Three Sisters shop, Alexandra signed for it and had it installed. The next day, Sukie started a project in the kiln, using some clay she had from home. Within a few days, the clay deliveries also began, and Alexandra, with the knowledge and approval of Jane and Sukie, accepted the deliveries and paid the invoices. A few months later, Jane discovers that Daryl had ordered from Big Fire Ceramics, and is upset because she believes them to be unreliable and expensive. Jane calls Big Fire and attempts to cancel the contract for the clay. Who is liable for the damages on the cancelled contract? a. Three Sisters Pottery only. b. Daryl only. c. Daryl and Three Sisters Pottery. O d. No liability for any of the parties. O Icon Key
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Related Book For
Elementary Statistics
ISBN: 978-0538733502
11th edition
Authors: Robert R. Johnson, Patricia J. Kuby
Posted Date:
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