George Was an Independent Salesman, Working Sales Territories in Which

question 44

Essay

George was an independent salesman, working sales territories in which various manufacturers did not maintain sales agents. Prior to a trip to Northern Manitoba, George informed a manufacturer of small electrical generators he expected to secure an order for fifty generators on this trip. From a more remote community, George was able to send a fax to the manufacturer which, when received, read "Send by air immediately the generators. Must be here by next Thursday." The fax should have read, "three generators" and the mistake was made solely by the fax office. The manufacturer sent fifty generators. Aside from the fact that one of the parties may have a remedy against the fax office, discuss the relevant principles of contract raised here, and determine whether there was no contract, a contract for three generators, or a contract for fifty generators.

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Definitions:

FIFO

"First In, First Out," an inventory valuation method where goods first acquired are the first to be sold.

Current Cost

The cost that would be incurred to purchase an asset or service at the present time, contrasting historical cost.

LIFO Firm

A company that uses the Last-In, First-Out method of inventory valuation where the most recently produced items are sold first.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from total revenue, indicating the company's profit.