Expert Answer:BUS 302 California State Legal and statistical ana

  

Solved by verified expert:Hello, -I have a purpose of the report and sections I need to create a powerpoint for (Legal Analysis and Statistical) -I wanted to see if you could look at It and figure out the statistical and legal analysis. This is the purpose (do not just answer the questions I need to follow the purpose and connect it into the analysis for my power point) PURPOSE: Whether or not company can be held against lost profits under commercial codesNEED HELP WITH THE ANALYSIS OF THESE: (connecting to purpose above ^) (I will create power point but I need help connecting it to the purpose we stated above and the correct analysis of legal and statistical) Legal analysis to see if firm is liable Whether or not company can be held against lost profits under commercial codes- Introduce/ Define Section 2-207 (Refer to cases I attached with the case/ questions) Whether or not we can be held against lost profits Look at applicable law and see if we can be held liableAssuming we may be liable, conduct statistical analysisMake Histogram- what is the Avg potential weekly lost profitsCompare w descriptive to see accuracy of histogram by finding Confidence intervalTest his claim w Hypothesis testing first six months is different the last six average
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Harvey’s Tree Farm, Inc.
Student Coaching Notes
1
Recovery of Lost Profits

Is the Lost Profits Limitation Clause Part of the
Contract?

May an Established Business Recover Lost
Profits Based on Projection of Future Income?
2
Is the Lost Profits Limitation
Clause Part of the Contract?
Is there an Acceptance?
Rejection & Counter Offer
– Definite
– Timely
– Not Conditional
on Offeror’s Assent
Are the Additional/Different
Terms Part of Contract?
Both Parties Merchants
Yes, unless
– Material Alteration
– Offer Limit Acceptance
– Offeror Objects
At Least One Party is Not a Merchant
No, unless Offeror Expressly Consents
3
Material Alteration
◼ Surprise or Hardship Standard
◼ Clauses that deny implied warranties
◼ Clauses that require arbitration
◼ Clauses that limit remedies
4
May an Established Business
Recover Lost Profits Based on
Projection of Future Income?
◼ Reasonable Certainty Standard
◼ Not Speculative in Nature
◼ No Absolute Precision is Required
◼ May Rely on Statistical Models based
on Past Financial Data
5
Question 2a:
Getting the Histogram

Use Excel to Calculate Profits on Spreadsheet
File Harvey’s Case.

Divide Profits Range (Highest Minus Lowest) by
6 to Get Bin Size and Round to Nearest 1000’s.

Manually Input 6 Upper Values of Bins into
Column of Spreadsheet File Harvey’s Case.

Follow Directions for Constructing Histograms on
Using_Excel_for_Stat PowerPoint.
6
Questions 2b & 2c:
Descriptive Statistics

Follow Directions for Descriptive Statistics
on Using_Excel_for_Stat PowerPoint.

Use a 99% Confidence Level when Using
Excel.
7
Question 2 d:
Expected Exposure

Expected Exposure = Construction Costs +
Total Expected Profits for Six Months

Basis for Compensation
8
Question 4:
Hypothesis Test

Test Mr. Cooper’s Claim that Offer
Underestimated Lost Profits (Profit
Increased During Last Six Months).

Follow Directions for Hypothesis Testing
on Using_Excel_for_Stat PowerPoint.

Use Two Sample Assuming Equal
Variances.
9
10
HARVEY’S TREE FARM, INC. ©
Memo
To:
David Hill, Manager of Risk Management Department
From:
Barbara Diaz, Supervisor, Sales Department
Date:
February 20, 2006
Re:
Burger, Fries, and Beer
__________________________________________________________________________________
As you may remember, Harvey’s Tree Farm, Inc. (“Harvey’s”) has recently entered into one of our largest
contracts yet with Burger, Fries, and Beer (Burger), whereby Harvey’s is to supply and decorate a
Christmas tree in each of Burger’s one hundred and thirty-seven fast food restaurants in Gould each year
in December. The first year of the contract was 2005.
You undoubtedly remember the December 2, 2005 disaster. On that day one of the Christmas trees that
we had delivered and decorated in early December to one of Burger’s restaurants in Ocean Park, Gould
caught on fire. The fire then severely damaged the restaurant’s premises, including the kitchen and dining
areas. Earlier today, I received an angry call from Mark Cooper, the president of Burger, updating me on
the recent calculations of losses from the disaster.
Our records indicate that the Christmas tree was delivered to Burger’s Ocean Park site on time and in
good order on the morning of Friday, December 2nd, 2005. As the manager on site requested our delivery
crew, they placed the tree inside the restaurant in an area next to the ordering counter. The crew then
spent the next two hours, as they routinely do, decorating the tree to the satisfaction of the on site
manager, Richard Carr. Mr. Carr then initialed the receipt provided to him by our delivery crew,
acknowledging receipt and full satisfaction from the decorated tree. Mr. Carr then fully paid for the tree
and the services with a company check.
The fire broke out inside the Ocean Park restaurant just as the last employee was leaving at
approximately 11:37 p.m. on December 2nd. Fortunately, there were no customers in the restaurant at that
time as the store generally closes at 11:00 p.m. on weekdays. Mr. Cooper indicated to me during the
phone conversation that a report he received yesterday from the local fire department tentatively
concluded that the fire originated from the Christmas tree. He went on to say that the report indicates that
the lights on the tree required too much power for the one outlet they were plugged into, causing an
electrical short. The spark from this instantly ignited the tree. The employee, who had been about to
unplug the tree and turn off the lights in the restaurant, was so shocked that he instantly ran out of the
restaurant. He then searched for a phone to call the fire department (in his haste he had left his cell
phone inside). It took a few minutes to find a phone, giving the fire a chance to spread.
Mr. Cooper also said that as a result of the fire, the restaurant has been completely shut down for the
past three months and that he does not expect the restaurant to be open for at least another three
months pending complete renovation of the damaged areas.
©
Copyright 2009, Dr. Rafi Efrat, Dr. Kenneth Klassen, and Dr. Richard Gunther
Mr. Cooper then demanded compensation for the losses that Burger’s restaurant sustained as a result of
the fire. He faxed to me a copy of the construction bid Burger’s restaurant accepted to reconstruct the
premises, which came out to $464,900. In addition to the reconstruction costs, he also demands
compensation for the potential profits the restaurant could have generated during the downtime. I am
attaching the documents I asked him to fax me, which include some of Burger’s financial data regarding
revenues and expenses during 2004 and 2005.
I told Mr. Cooper that I sympathize with the lost profits sustained by the Ocean Park Burger, Fries, and
Beer, but that according to the agreement we entered with Burger, Burger agreed to waive all claims
against us for any consequential damages. After he quickly looked at the Purchase Order
Acknowledgment, he said that while there was such a clause in the document, it was not part of the
contract since Burger never agreed to it or signed it. I replied that I would look it over and get back to him
soon.
Required
In addition to the financial data provided by Mr. Cooper below, please read parts of the Gould
Commercial Code and the cases attached in the legal library. Before Ms. Diaz replies to Mr. Cooper, write
an objective report to her (refer to the report guidelines on the Gateway web site). (Assume that the
applicable precedent is from the fictional jurisdiction of the state of Gould).
In preparing your report you may wish to review business law concepts 1, 2 and 10 and statistics
concepts 1, 2, 3 and 9.
PURCHASE ORDER
Number: 865
San Sur, Gould 93400
(874) 788-7000
Date: September 20, 2005
_______________________________________________________________________
SELLER: Harvey’s Tree Farm, Inc.
18500 First Blvd.
Ocean Park, Gould 75356
SHIP TO: See Instructions below
_______________________________________________________________________
Per our discussion from earlier today, Burger, Fries, and Beer orders one hundred thirty
seven (137) Harvey’s Nevada Christmas Trees – Evergreen style.
The trees are to be delivered before December 12, 2005 to each of Burger, Fries, and
Beer’s 137 restaurants (attached please find a list). Harvey’s delivery crew shall decorate
each tree on the site per sample shown by your sales representative, Ms. Westbrook.
Price: $150 per tree, all-inclusive, per quote from Jill Westbrook. Payable net upon delivery
and decoration.
General Conditions
Seller warrants all goods are of merchantable quality and fit for the intended purpose. Seller warrants that all goods are free and clear of
all liens and claims by third party and that Seller possesses all rights to sell said goods free and clear.
____________________________________________________________________________________________________________
Authorized Signature:
___________________
Ruben Sanchez
PURCHASE ORDER ACKNOWLEDGMENT
18500 First Blvd.
Ocean Park, Gould 75356
(818) 995-6500
September 25, 2005
Buyer: Burger, Fries, and Beer, Inc.
1990 Century City Boulevard
San Sur, Gould 93400
(874) 788-7000
Ship To: Per instructions
Contact: Ruben Sanchez
We have received your purchase order number 865 dated September 20,
2005.
-137 Christmas trees-Evergreen style;
-Decorations to be added upon delivery;
-unit price $150
-We will ship first unit to your store in Ocean Park, Gould.
-Payable net upon delivery.
____________________
Alexa Rubin
Department of Procurement
CONDITIONS APPLICABLE TO ALL SALES:
Late charges at 10% per month for past due payments; minimum late charge $10. Shipment travel at the risk and cost of Buyer. Risk of
loss passes to Buyer at the time of identification. Seller warrants that all goods are of merchantable quality and fit for the intended
purpose. To the extent defect is identified in any tree delivered, Seller shall promptly deliver a replacement tree to Buyer. Buyer waives
any claims for consequential damages arising out of this purchase order, including, but not limited to lost profits.
4
BURGER FINANCIAL DATA FROM THE PRIOR YEAR OF OPERATION*
Week
Of
Expenses
($)
Revenues
($)
Week
Of
Expenses
($)
Revenues
($)
6-Dec-04
103,084
122,533
6-Jun-05
101,201
153,171
13-Dec-04
99,584
131,036
13-Jun-05
99,726
136,244
20-Dec-04
94,936
137,813
20-Jun-05
96,206
101,012
27-Dec-04
100,757
114,495
27-Jun-05
100,878
156,135
3-Jan-05
102,736
120,579
4-Jul-05
99,439
125,567
10-Jan-05
94,866
182,122
11-Jul-05
95,537
154,901
17-Jan-05
96,158
137,983
18-Jul-05
105,354
128,439
24-Jan-05
97,013
104,668
25-Jul-05
89,897
116,745
31-Jan-05
97,796
117,807
1-Aug-05
91,257
168,639
7-Feb-05
106,315
157,735
8-Aug-05
104,675
148,706
14-Feb-05
92,307
145,685
15-Aug-05
93,216
141,687
21-Feb-05
89,923
129,758
22-Aug-05
102,284
141,879
28-Feb-05
100,546
130,642
29-Aug-05
103,959
106,889
7-Mar-05
99,270
85,895
5-Sep-05
97,823
169,328
14-Mar-05
98,632
125,994
12-Sep-05
97,765
126,747
21-Mar-05
100,273
113,194
19-Sep-05
108,032
154,728
28-Mar-05
100,006
127,209
26-Sep-05
101,433
162,576
4-Apr-05
105,531
114,713
3-Oct-05
96,548
138,661
11-Apr-05
92,774
145,468
10-Oct-05
93,295
158,689
18-Apr-05
103,169
151,959
17-Oct-05
100,227
135,165
25-Apr-05
105,794
68,623
24-Oct-05
97,876
112,240
2-May-05
98,534
126,485
31-Oct-05
102,985
118,904
9-May-05
97,474
97,000
7-Nov-05
100,099
141,778
16-May-05
102,492
121,350
14-Nov-05
102,245
161,104
23-May-05
105,295
137,074
21-Nov-05
102,353
140,226
30-May-05
99,640
152,589
28-Nov-05
105,811
133,108
* All figures are after tax
5
HARVEY’S TREE FARM, INC. LIBRARY©
Library of Legal Information
1.
AGUILAR MANUFACTURING, INC., Plaintiff and Appellant, v. RICHFIELD, INC., Defendant and
Respondent
2.
KIDS’ WORLD INC., Plaintiff and appellant v. LABS ETC. INC., Defendant and respondent.
3.
GOULD Commercial Code
©
Copyright 2009, Dr. Rafi Efrat, Dr. Kenneth Klassen, and Dr. Richard Gunther
6
AGUILAR MANUFACTURING, INC.,
Plaintiff and Appellant, v. RICHFIELD, INC.,
Defendant and Respondent
damages, for damages for loss of good will and
reputation according to proof, for attorney’s fees
in the action, plus costs and other proper relief.
Civ. No. 87546
In defendant’s answer to the complaint, it
pleaded 16 affirmative defenses, one of which
alleged “. . . that plaintiff failed to commence the
within action within the one-year limitation period
expressly agreed to by the parties in writing.”
Court of Appeal of Gould, Third
Appellate District, Division Three
April 24, 1998 filed
After the case was at issue, the parties
stipulated in writing “that the question of
whether, as a matter of law, plaintiff’s claims are
barred by the applicable statute of limitations on
contractual limitations period may, and should,
be determined in advance of impaneling a jury to
determine the remaining factual issues in
respect of the trial set for January 30, 1984. The
reason for this stipulated order of proceeding is
that if, as defendant contends but plaintiff
disputes, the action is time-barred as a matter of
law, defendant would be entitled to judgment
without the need for further proceedings.”
PRIOR HISTORY:
Superior Court of San Dimes County, No. SD
9563466, Elizabeth Westbrook, Judge.
DISPOSITION: The judgment is affirmed.
COUNSEL: Warren & Warren for Plaintiff and
Appellant.
Gibson & Anderson for Defendant and
Respondent.
OPINION BY: KAUFMAN
With reference to the agreed upon issue of fact,
the pretrial conference order included recitations
that:
OPINION: This appeal presents for the first time
in this state an occasion to interpret section
2207 of the Commercial Code (infra) as it
operates to permit an offeree seller to accept an
offer to purchase on terms not contained in the
offer, which are yet binding on the offeror buyer,
provided such terms do not represent a “material
alteration” of the contract. Here the offeree
seller’s invoices contained a printed limitation of
one year within which the buyer could
commence an action “under this contract” after
such action had accrued. On the facts before it,
the trial court ruled that a suit brought by the
buyer twenty-one months after all of its causes
of action had accrued, including those for breach
of warranty fraud and negligent
misrepresentation, was barred by this one-year
limitation provision which had become a term of
the contract in the manner noted. In our view,
the trial court properly ruled on the issues before
it, and the judgment of dismissal will be affirmed.
“3. The procedure for all sales of emulsions
purchased by plaintiff from [defendant], including
all sales of Polyco 2151, was as follows: A
representative of plaintiff would telephone
[defendant’s] facility and place an oral order for a
quantity of emulsion at [defendant’s] standard
price for delivery at plaintiff’s facilities in Colton.
On several occasions plaintiff would also
thereafter send to [defendant] a written purchase
order identifying the product to be purchased,
stating the quantity required and the place and
means of shipment, the price per pound, the
date and place of requested delivery.
“4. Plaintiff made at least seventeen purchases
of Polyco 2151 between May 1976 and July
1977, inclusive.
“5. Plaintiff’s oral and/or written offers to
purchase Polyco 2151 did not limit acceptance
to their terms.
Synopsis of the Trial Court Proceedings:
Aguilar Manufacturing, Inc., a Nebraska
corporation (plaintiff) filed its initial complaint in
the underlying action on March 30, 1979 for
breach of warranty, fraud, and negligent
misrepresentation. The suit was brought against
Richfield Inc. a Gould corporation (defendant).
The prayer asked for $ 2 million in general
“6. [Defendant’s] sales documents in respect of
the shipments of Polyco 2151 to plaintiff
contained the following limitation of action
provision, which constituted a proposal for
addition to the contract: “‘2. . . . Any action
7
by Buyer hereunder shall be commenced within
one year after receipt of said products.’
On the material alteration issue, comment 4 to
section 2-207 provides in pertinent part:
“Examples of typical clauses which would
normally ‘materially alter’ the contract and so
result in surprise or hardship if incorporated
without express awareness by the other party
are: a clause negating such standard warranties
as that of merchantability or fitness for a
particular purpose in circumstances in which
either warranty normally attaches . . . [to] a
clause requiring that complaints be made in a
time materially shorter than customary or
reasonable or to a provision which require
arbitration, or otherwise contain terms limiting
remedies.” However, Comment 5 to section 2207 provides in pertinent part: “Examples of
clauses which involve no element of
unreasonable surprise and which therefore are
to be incorporated in the contract unless notice
of objection is seasonably given are: . . . a
clause fixing a reasonable time for complaints
within customary limits.”
“8. On each occasion that plaintiff ordered a
shipment of Polyco 2151, [defendant] sent to
plaintiff sales documents containing the
limitation of action provision discussed in
paragraph 6 at the same time or shortly after
each shipment of Polyco 2151. Plaintiff received
each of the foregoing sales documents in due
course.
“9. Plaintiff at no time notified [defendant] of an
objection to the one-year limitation of action
provision contained in [defendant’s] sales
documents for the sale of Polyco 2151.
Discussion
Defendant’s motion was brought and granted
on the grounds that the one-year limitation
periods in the sales documents were additional
terms which became part of the contracts,
pursuant to Gould’s Commercial Code section
2207. Section 2207 provides in relevant part:
“(1) A definite and seasonable expression of
acceptance or a written confirmation which is
sent within a reasonable time operates as an
acceptance even though it states terms
additional to or different from those offered or
agreed upon, unless acceptance is expressly
made conditional on assent to the additional or
different terms. (2) The additional terms are to
be construed as proposals for addition to the
contract. Between merchants such terms
become part of the contract unless: (a) The offer
expressly limits acceptance to the terms of the
offer; (b) They materially alter it; or (c)
Notification of objection to them has already
been given or is given within a reasonable time
after notice of them is received.”
On the issue of whether, between merchants, a
one-year limitation period is normal, customary,
or reasonable, there seem to be no Gould cases
directly on point. However, the Gould
Commercial Code section 2725, subdivision (1)
provides that the parties to a sales contract may
reduce the statutory four-year period of
limitations to one year. A district court in New
York has recently found that a one-year
limitation provision is not an unreasonable or
material alteration of a contract pursuant to
Uniform Commercial Code section 2-207.
(Aceros Industrials, S.A. de C.V. v. Florida Steel,
supra, 528 F.Supp. 1156, 1158.)
In view of all the above, particularly comment 5
under the corresponding section of the Gould
Commercial Code, we hold that the trial court
correctly determined that the limitation periods
here in question were not material alterations of
the contracts, and further in view of section
2725, subdivision (1) of the Gould Commercial
Code, that the one-year period was not
unreasonable. As a consequence, the provisions
are legally enforceable.
The trial court ruled that limiting the period
contained in the sales documents was not a
material alteration, and further that the one-year
period of such limitation was not unreasonable.
Plaintiff does not dispute the applicability of
section 2207, and concedes, as to subdivision
(2) thereof, that its own offers to purchase did
not limit acceptance to the terms of the offers,
and that it did not object to the one-year
limitation provisions. Plaintiff argues, however,
that those provisions materially altered the
contracts, and therefore did not become part of
the contracts.
Plaintiff’s attempts to distinguish Aceros, and to
analogize defendant’s one-year limitation
provisions to provisions which require
arbitration, disclaim warranties, or otherwise
contain terms “limiting remedies” ( Album
Graphics, Inc. v. Beatrice Foods Co. (1980) are
8
without merit. The one-year limitation provisions
here do not limit plaintiff’s remedy, but limit the
time within which it may pursue that remedy,
and, moreover, do so in a way which is
statutorily and judicially acceptable.
The judgment is affirmed.
9
K …
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