Course Paper

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xnivre

Business Finance

Description

You are an assistant to the attorney for ABCD company. To complete this assignment you must write a two-to-three page report discussing the issues and likely outcome case below:

Several months ago, WXYZ Co. CEO met with ABCD’s CEO for lunch to discuss potential business ventures between both companies. After several glasses of wine WXYZ’s CEO offered to buy from ABCD a 20 acre parcel of waterfront land located in the Florida Keys. WXYZ’s purchase offer was for $50 million but ABCD’s reply was that it would sell the land only at $70 million. Since WXYZ had so much interest in this piece of land, its CEO told ABCD that he would have to meet with the rest of its board to make a decision but that he would pay ABCD $10,000 to keep the option to buy the land open for 30 days. ABCD’s CEO, agreed and wrote in a piece of paper that in exchange for $10,000 ABCD was giving WXYZ the option to buy the land in question within 30 days at a $70 million price. WXYZ then gave ABCD’s CEO a $10,000 check which they promptly cashed. On day 20th, WXYZ met and it unanimously agreed to buy the land from ABCD at $70 million. That same day, its CEO sent ABCD’s CEO a fax confirming that they were accepting ABCD’s offer to buy the land. Upon receiving the fax, ABCD’s CEO called WXYZ to inform them that the offer was off the table and that the price for the land was now $90 million which WXYZ refused to pay. Two days later billionaire Richie Moneymaker offered to buy the land from ABCD for $100 million. WXYZ is now demanding that ABCD honor its word and sell them the land for the original offered price.

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Explanation & Answer

Attached.

Running head: WARRANTY OF MERCHANTABILITY

Warranty of Merchantability
Student’s Name
Institution

1

WARRANTY OF MERCHANTABILITY

2

Issuance of a written warranty for a product is a guarantee that the product will be sold
without any objections in the trade. This guarantee of selling of a product without any objections
is referred to as warranty of merchantability (Bevans, 2009). The CEO of ABCD offered to sell
the 20-acre parcel of waterfront land that is located in the Florida Keys for $70 million. This was
after the CEO of WXYZ offered $50 million. After negotiations, they agreed that the CEO of
WXYZ would go and discuss the price with the board. Before the meeting was over, CEO of
ABCD agreed to take $10,000 and signed on a piece of paper that ...


Anonymous
This is great! Exactly what I wanted.

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