Cost Accounting
Jenine Teixeira
ACFI 406
9/24/12
Assignment chapter 19 Q: 1, 2, 11, 15
1. Dickison orders one thousand widgets at $5 per widget from International Widget to be delivered within sixty days. After the contract is consummated and signed, Dickison orally requests that International deliver the widgets within thirty days rather than sixty days. International agrees. Is the contractual modification binding?
A- Both parties are merchants, the change of delivery date would affect the bottom line price of the widget, therefore considered big deal, a consent is need in writing for this modification to be binding, therefore this modification is not binding 2. In Question 1, what effect, if any, would the following telegram have?
International Widget: In accordance with our agreement of this date you will deliver the one thousand previously ordered widgets within thirty days. Thank you for your cooperation in this matter. (signed) Dickison
A- In this case the contractual modification is binding.
11. Schreiner, a cotton farmer, agreed over the telephone to sell one hundred and fifty bales of cotton to Loeb & Co. Schreiner had sold cotton to Loeb & Co. for the past five years. Written confirmation of the date, parties, price, and conditions was mailed to Schreiner, who did not respond to the confirmation in any way. Four months later, when the price of cotton had doubled, Loeb & Co. sought to enforce the contract. Schreiner argues that he is not a merchant. Is the contract enforceable?
A- Under the mailbox rule the moment the offer gets mailed it’s affective when both parties are Merchant. There was an oral contract following a written confirmation of the order, this contract is enforceable under the Uniform Code only and if Schreiner is a merchant and in this case he is.
15. The defendant, Gray Communications, desired to have a television tower built. After a number of negotiation sessions conducted by telephone between
ACFI 406
9/24/12
Assignment chapter 19 Q: 1, 2, 11, 15
1. Dickison orders one thousand widgets at $5 per widget from International Widget to be delivered within sixty days. After the contract is consummated and signed, Dickison orally requests that International deliver the widgets within thirty days rather than sixty days. International agrees. Is the contractual modification binding?
A- Both parties are merchants, the change of delivery date would affect the bottom line price of the widget, therefore considered big deal, a consent is need in writing for this modification to be binding, therefore this modification is not binding 2. In Question 1, what effect, if any, would the following telegram have?
International Widget: In accordance with our agreement of this date you will deliver the one thousand previously ordered widgets within thirty days. Thank you for your cooperation in this matter. (signed) Dickison
A- In this case the contractual modification is binding.
11. Schreiner, a cotton farmer, agreed over the telephone to sell one hundred and fifty bales of cotton to Loeb & Co. Schreiner had sold cotton to Loeb & Co. for the past five years. Written confirmation of the date, parties, price, and conditions was mailed to Schreiner, who did not respond to the confirmation in any way. Four months later, when the price of cotton had doubled, Loeb & Co. sought to enforce the contract. Schreiner argues that he is not a merchant. Is the contract enforceable?
A- Under the mailbox rule the moment the offer gets mailed it’s affective when both parties are Merchant. There was an oral contract following a written confirmation of the order, this contract is enforceable under the Uniform Code only and if Schreiner is a merchant and in this case he is.
15. The defendant, Gray Communications, desired to have a television tower built. After a number of negotiation sessions conducted by telephone between