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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?

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Solution Summary

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

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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 ...

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