Punitive damages are generally recoverable in contract actions.
An issuer has an obligation to honor drafts under a letter of credit if the conditions
specified in the letter have been satisfied. This obligation includes the bank’s obligation
to assure that the goods sold by the seller in fact conform to the contract.
Illegality, such as a note for gambling, is a universal defense.
Small children are afforded additional protection against the trespass rule through the
€attractive nuisance€ doctrine.
No writing is required for a service contract that can be performed within one year after
the date of the agreement.
Truth is not a defense to defamation.
Order paper is negotiated by the indorsement of the holder and delivery.
A young stockbroker was rather overwhelmed by a flood of new clients. Assunta, one
of his clients, had purchased XYZ Corp. stock through the broker at a price of $35 per
share. The price had gone down to $29 by the time Assunta telephoned the broker.
Assunta told the broker that she wanted to sell the stock if it went below $30 and
inquired as to the price. The broker did not check the price, but thinking it could not
have fallen below the $30 threshold, simply reassured Assunta that it was still “in the
low 30s.”Marta, Assunta’s cousin, also had purchased XYZ stock at $35 per share and
made a similar call to the broker and received the same response. Marta, however,
coincidentally saw the price on a stock ticker tape when she hung up and realized the
broker had made an error. Both Assunta and Marta held the stock and did not sell.Later
that same day, the stock price fell an additional $7 per share. Facing sizable losses, both
Assunta and Martha decided to sue for fraud when Marta told Assunta of the broker’s
misstatement. Discuss the probable outcome of the lawsuits.
Consumer goods are not subject to perfection of a security interest.