A Student Bought an Elaborate Smartphone for the Stated Purpose

question 162

Multiple Choice

A student bought an elaborate smartphone for the stated purpose of listening to his taped notes while he went for his daily run. The contract he signed with the seller included a clause excusing the seller from liability for the breach of "any term of the contract, whether a breach of condition or warranty whether express, implied, statutory, or otherwise." After only 30 days, the smartphone failed to function at all. It was totally useless for the student's purpose, so he took it back to the seller. The seller refused to take it back and pointed out the exemption clause in the signed contract. On these facts, which of the following could be true?

• A) The student could get around the exemption clause by arguing insufficient notice.
• B) The student could get around the exemption clause by the court's strict interpretation (construction) of the clause.
• C) The student could be awarded damages if the exemption clause were found invalid by the court on the grounds that the clause could not be interpreted to mean it would forgive such a fundamental breach.
• D) The student is out of luck because the contract with the exemption clause was in writing.
• E) All exemption clauses are illegal, and therefore the student would not be bound by this one.

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Definitions:

Shareholder's Right

The entitlements or privileges granted to an individual or entity that owns shares in a corporation, including the right to vote on corporate matters and to receive dividends.

Shareholder Proposal

A suggestion submitted by a shareholder about a broad company policy or procedure.

Shareholders' Meeting

A gathering of the shareholders of a company where decisions regarding the company's policies, management, and financial matters are discussed and voted upon.

Duty of Loyalty

An obligation of individuals in fiduciary positions to act in the best interests of their company or clients.