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Newspaper ads for car dealers

Hot Cars, Inc., is a retail car dealership based in Any State, U.S.A. Hot Cars ran an ad that stated that 2002 models were on sale for 10% over invoice. Small print indicated that some restrictions and costs may apply. Hot Cars ran a separate ad for a 2000 model truck, which was identified by its VIN. The ad listed the sales price for the truck as $8,600.

a. Sally read the ad for the 2002 models and told Joe, the salesman at Hot Cars, that she wanted to buy the red car for 10% over the invoice. Joe said that the 2002 red car was not covered in the ad. Does Joe have to sell Sally the red car for 10% over the invoice? Using contract principles, explain why or why not?

b. Adam approached Joe to purchase the 2000 truck for the advertised price of $8,600. As Joe wrote up the sale he discovered that the actual price was $18,600. The price in the ad was a misprint. Is Adam entitled to the advertised price of $8,600? How should the dispute be resolved using contract principles? Why?

Solution Preview

A) Since the ad stated that "some restrictions and costs may apply, Hot Cars has covered itself legally and does not have to sell Sally the red car for 10% over the invoice. Even though the print is small, Hot Cars' specifically and ...

Solution Summary

The solution addresses an ad placed in the newspaper from the Hot Cars, Inc. dealership and the misrepresentations of the ad.