Answer questions (Business 506 legal and ethical environment)

Homework Questions 10-12 Due Week 5 

QUESTION 10

Carol’s five-year employment contract as sales manager contains a clause requiring that any modification of the contract must be in writing. After two years, the company decides that it wants to employ Carol as vice-president of marketing. Over the telephone, the president and Carol agree to new terms for the remaining three years, including a change in salary, vacation, sick leave, country club membership, and office space.

Are the new contract terms valid? Can Carol enforce these new terms in case of a dispute? Is the company obligated to comply with the terms? Please explain.

QUESTION 11

Mel owns a neighborhood grocery store that he would like to sell. Katrina is interested in purchasing the business, but she is concerned because she knows that Mel has built up a lot of good will over the years, and she wonders whether Mel might not just open another store down the street and take all of the business from the old store with him. Katrina asks for and receives from Mel a clause in the sales agreement that Mel will not open another grocery store within a 150-mile radius of the old store for a period of at least ten years. 

Is this clause in the contract to purchase the store valid? Give the name of this type of clause. If you decide that the clause is valid, please give your reasons. If you decide the clause is not valid, also give your reasons. If you decide the clause is not valid, does it make the entire contract invalid? Please explain. If you decide the clause is invalid, how could you re-write it to make it valid?

QUESTION 12

Cheryl is a 17-year-old high school student who was elected homecoming queen and does part-time modeling to earn money for college. She has an important interview with a modeling agency and wants to make a good impression, so she withdraws $5000 from her savings and buys a designer outfit and a fur coat for the interview. A week later, she returns the coat to the department store and says that she would like her money back. The store is reluctant to take the items. 

What are Cheryl’s rights? What is the store obligated to do? Please explain your answers.