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Springfield Sports, Inc.: false advertising, auctions, agreements, and binding contracts

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Springfield Sports, Inc. is a sports equipment and memorabilia store in the state of Columbia, U.S.A. Springfield Sports sells sports trading cards and autographed photos, baseballs, bats, footballs, jerseys and other sports equipment and clothing. Homer owns 100% of the stock in Springfield Sports, Inc., and is the President of the corporation. Flanders is the corporation's Treasurer and Secretary and he also works at the store. Marge, Bart, Lisa and Barney are employees but do not own any stock or hold any corporate positions. Bart is a 16 year old student who works part-time at the store.

1. Springfield Sports ran an ad promoting aluminum baseball bats for $35. Principal Skinner read the ad and went to Springfield Sports to purchase a $35 bat; however, Flanders told him that there weren't any $35 bats and the advertisement had been a misprint. Flanders then told Principal Skinner that Springfield Sports did have other aluminum bats for $55. Which of the following statements is true about this situation?

A. Springfield Sports may choose to accept or reject Principal Skinner's offer to buy an aluminum baseball bat for $35, in its sole discretion.

B. Springfield Sports must sell Principal Skinner an aluminum baseball bat for $35 because the advertisement was an offer and Principal Skinner accepted it when he offered to pay $35.

C. If Principal Skinner sues Springfield Sports for false advertisement, he will win and recover three times his damages.

D. If Principal Skinner sues Flanders for fraud, he will win.

2. A week after the facts in question #1, Springfield Sports ran a new advertisement. This ad said Springfield Sports had that the football that had been used in last year's college football championship that was kicked through the goalposts to win the game, and that quarterback of the winning team had autographed the ball, and that it was available for $800. Mayor Quimby went into Springfield Sports to buy the football, but was told by Homer that the ball was no longer for sale. Homer said that although Mayor Quimby was the first person to walk in with $800 to buy the football, he had so many telephone inquiries about the ball that he decided to auction it off during a Saturday card show. Which of the following statements is true about this situation?

A. Springfield Sports may choose to accept or reject Mayor Quimby's offer to buy the football for $800, in its sole discretion.

B. Springfield Sports must sell Mayor Quimby the championship football because the advertisement was an offer and Mayor Quimby accepted it when he offered to pay $800.

C. If Mayor Quimby sues Springfield Sports for false imprisonment, he will win.

D. Springfield Sports may conduct the auction, but regardless of who wins the auction, Mayor Quimby has the option to buy the football at the greater of $800 or whatever price is determined at the auction.

3. Bart wanted to buy Barney's car, and he and Barney agreed that the value of the car was $2,000. Barney agreed to accept $1,000 up front and $200 a month from Bart until the car was paid off. Two months later, Bart lost his job at Springfield Sports. Barney had no idea that Bart was only 16 years old. Which of the following statements is true?

A. Bart may elect to keep the car and stop paying Barney with no consequences to himself, because he is a minor.

B. Bart cannot return the car and must continue making payments to Barney, even if he does not want to.

C. Bart can keep the car but must make diligent efforts to find a new job and renew making payments to Barney.

D. Bart can require Barney to take the car back and give him (Bart) his money back.

4. Reverend Lovejoy bought a signed hockey jersey for $2,500. He signed a written contract with Homer to pay $200 down and $75 per month, plus interest. After making ten payments, Reverend Lovejoy questioned the interest calculation, as he thought he was paying more interest than he had expected under the contract. Homer ignored Reverend Lovejoy's inquires. With $500 left to pay according to Homer's calculations, Reverend Lovejoy lost his job, and he could not make the remaining monthly payments. Reverend Lovejoy asked Flanders if he would agree to settle the debt in full for $150, leaving $350 unpaid. Which of the following statements is true?

A. If Flanders orally agrees to Reverend Lovejoy proposition, but Homer tells Flanders after the fact that the company should not have made that deal, Reverend Lovejoy is free to keep the jersey once he pays $150.

B. Flanders can bind Springfield Sports to Reverend Lovejoy's proposition, but only in writing and only if Homer authorizes him to do so beforehand.

C. Even if Flanders accepts Reverend Lovejoy's deal, it is of no effect; Reverend Lovejoy must continue to make payments pursuant to his original agreement.

D. If Reverend Lovejoy sues Homer and Springfield Sports for fraud, he will win

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1. Answer C

The term ''false advertisement'' means an advertisement, other than labeling, which is misleading in a material respect; and in determining whether any advertisement is misleading, there shall be taken into account (among other things) not only ...

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