Download BBA3210Unit VI Case StudyColumbia Southern UniversityUnit VI and more Lecture notes Accounting in PDF only on Docsity! BBA3210 Unit VI Case Study Columbia Southern University Unit VI Case Study During this case study, Scott Resaurant Company entered into a contract with Big Refrigeration Company to purchase an Artic Air commercial freezer for $5,000. Prior to signing the contract a agreement was made to pay Big Refrigeration Company an additional $1,000 to delivery and install the freezer. Upon deliver of the freezer to Scott Resturant Company an representative noticed that the unit they had a written agreement for was not what they received and immediately stop the installation from taking place. Based on the research I have conducted; we will determine if the contract that was made between Scott Restarunat Company and Big Refrigeration Company was subject to Article 2 of the Uniform Commercial Code (UCC) and by Big Refrigation Company being a merchant what difference this makes during this type of transaction. We will also determine if Big Refrigeration Company breach the contract and why. Lastly, we will discuss what actions Scott Resturant Company can take if a breach in the contract has occurred. Was the Contract Subject to Article 2 of the UCC? “Mental capacity is when a person suffers from the mental illness or deficiency that limits or fully prevents them into entering into a legally binding contract.” (Kubasek, 2011). In Calvin’s situated he suffered a stroke and could not communicate or walk based on the traumatic health experience. Even though Calvin was in the stages of recovery and he was capable of speaking and making sound decisions when the contract was derived. During the visits, Billy listened to his uncles’ problems and began to think of remedies to help ratify the situation. He knew his uncle was a coin collector; he started studying it and soon proposed a solution to his uncle to help his financial situation. Billy researched the worth of one of his coins and offered to help sell his uncle’s coin for a percentage. Calvin did not accept the offer. Calvin even explained to Billy that the coin was worth 100,000 dollars, and Billy began to persuade his uncle by telling him that the market had changed. Calvin eventually agreed to sell the coin for the asking price, being that he did need the money. Calvin could reject the offer, recall the worth of the coin, and neglected to tell his nephew to sell the coin at the auction but the best price. In order for Calvin to prove that he was not in a mental capacity of entering into the contract, he would have to show or prove through documentation from his doctor that on that particular day, he was incapable of entering into an agreement with Billy due to the traumatic experience he suffered doing his stroke. Calvin understood and analyzed the offer he was positioned with by his nephew. One could say that Calvin did not lack mental capacity when he entered into this contract. Calvin knew how much his coin was worth, and he failed to ask for documentation to show that the market had changed when the agreement was presented. Even though Calvin legally entered into this contract, there still is a question of whether he was influenced to make this decision by Billy. Was Calvin “undue influence by Billy? “Undue influence is when an individual uses their dominant position in a relationship to persuade a person to enter into a contract. Primarily initiated by a person that is deemed trustworthy such as a relative or doctor that can persuade through unusual pressure to have an individual make a decision based on their incapability to decide on their own.” (Kubasek, 2011). Calvin took what his nephew stated as facts being that he trusted his nephew, which supports the possibility that he may have been an undue influence when the contract was made. We must remember that Calvin was in the hospital due to a stroke and on the road to recover. Even though he was able
