Fluent Essays

Unit 2 Tutorials: Bases of Liability INSIDE UNIT 2 Contracts General Perspectives on Contracts Sources of Contract Law Different Types of Contracts Contract Formation Unenforceable Contracts Statute of Frauds Contract Remedies Monetary Awards Equitable Remedies: Specific Performance and Injunction Remedies in General Under the Uniform Commercial Code Sellers Remedies Under the Uniform Commercial Code Buyers Remedies Under the Uniform Commercial Code Limitations on Contract Remedies Torts Introduction to Tort Law Intentional Torts Negligent Torts: Liability Negligent Torts: Damages and Defenses Theories of Strict Tort Liability Strict Liability Products Liability Negligent Products Liability Strict Products Liability Problems with Strict Products Liability © 2020 SOPHIA Learning, LLC. SOPHIA is a registered trademark of SOPHIA Learning, LLC. Page 1 General Perspectives on Contracts by Sophia Tutorial  In this lesson, you will learn about contracts as a legal concept, and the role they take in society. Specifically, this lesson will cover: 1. Historical View of Contracts 2. Economic View of Contracts 1. Historical View of Contracts The contract is probably the most familiar legal concept in our society because it is so central to our political, economic, and social life. In conversation, the term is used interchangeably with agreement, bargain, undertaking, or deal; but whatever the word, it embodies our notion of freedom to pursue our own lives together with others. Contracts are central because they are the means by which a free society orders what would otherwise be disorder. So commonplace is the concept of contract - and our freedom to make contracts with each other - that it is difficult to imagine a time when contracts were rare, an age when people’s everyday associations with one another were not freely determined and agreed upon. Yet in historical terms, it was not so long ago that contracts were rare, entered into if at all by very few. IN CONTEXT In “primitive” societies and in medieval Europe, from which our institutions sprang, the relationships among people were largely fixed; traditions spelled out duties that each person owed to family, tribe, or manor. The movement toward contracts, then, went hand-in-hand with the emerging industrial order from the fifteenth to the nineteenth centuries, as England, especially, evolved into a booming mercantile economy with all that that implies— flourishing trade, growing cities, an expanding monetary system, commercialization of agriculture, and mushrooming manufacturing. Contract law was created out of necessity. Not until the nineteenth century, in both the United States and England, did a full-fledged law of contracts arise together with modern capitalism.  BIG IDEA WHATS COVERED © 2020 SOPHIA Learning, LLC. SOPHIA is a registered trademark of SOPHIA Learning, LLC. Page 2 Contract law did not develop according to a conscQUESTION 1 a) Write a brief definition of economics. Elaborate the conditions that give rise to this definition. b) Analyse the THREE interrelated features of the economics perspective ? c) Some stores give “free” products to consumer. An economist would say the products are not free. Is there any difference? Explain ? QUESTION 2 a. Use maginal analysis to explain why it is possible to “have too much of a good thing”. Use education as an example. b. Explain the importance of the ceteris paribus or “other-things-being-equal” assumption. c. Comment on the statement from an opportunity cost perspective: “The major cost of going to college is the $15,000 per year in tuition”. Assume that a person could have earned $30,000 a year if the person did not go to college. QUESTION 3 a. Why might it be a good economic decision for a person such as Bill Gates or Steve Jobs to drop out of college ? Give an economic justification for such a decision. b. How are tradeoffs illustrated by the production possibilities curve? Consider the case of Federal government spending on national defense and spending on social programs. QUESTION 4 a. Rafidah was earning $100,000 a year working as a scientist for a drug company. She decided to start her own business that conducted drug trials. She estimated this entrepreneurial talent or forgone entrepreneurial income to be $10,000 a year. She used $500,000 in savings that earned 5 percent interest annually to finance the new business. In the first year, the firm earned revenue of $1,500,000. The costs for rent, supplies, and employees salaries were $1,100,000. What was the accounting profit for the new business? What was the economic profit (or loss)? Explain your calculations for both questions. QUESTION 5 Suppose Tom, Dick and Harry live in a barter economy. Tom produces wine, Dick bakes bread and Harry makes cheese. Tom wants some bread to go with his wine and is willing to trade 1 gallon of wine for two loaves of bread. Dick wants some cheese to go with his bread and is willing to trade one loaf of bread for one-half pound of cheese. Harry doesn’t want bread, but wants some winde to go with his cheese and is willing to trade cheese for one gallon of wine. It is not possible for all three of them to meet together at one time. a. Explain how this situation illustrates the difficulty with a barter economy. b. Devise a money system using precious stones where four stones are equivalent in value to one gallon of wine. In other words tell how much bread and cheese would be worth in terms of stones in this economy. In this sytem, how much cheese mus Harry sell in order to buy one gallon of wine? QUESTION 6 What effect should each of the following have upon the demand for portable music players in the competitive market? Explain your reasoning in each case. a. The development of improved, low-priced devices that compete with music players. b. An increase in po