The ACME Toaster Company Was Searching for a Supplier of Wire

question 20

Multiple Choice

The ACME Toaster Company was searching for a supplier of wire heating elements for its toasters. It located the XYZ Element Company which also supplied good quality elements to the Pop-Up Toaster Company, ACME's main competitor. In order to fill ongoing standing orders for elements, XYZ required ACME to complete a credit survey identifying ACME's bank and trade credit references. ACME, which was in financial difficulty, provided a bank account number which actually belonged to the president personally and in which there were substantial deposits. ACME also wrote a letter to the operations manager of XYZ stating that ACME could purchase the entire production of XYZ's elements and that if XYZ would agree to ACME being its exclusive elements customer, ACME would guarantee the purchase of XYZ's annual production at 1% above the price paid by Pop-Up. XYZ was delighted. It informed Pop-Up that it would no longer be able to meet its supply requirements, effective immediately. ACME received its first shipment of elements within a week.

• A) XYZ has committed the tort of fraudulent conversion of goods.
• B) XYZ has committed the tort of deceit.
• C) Pop-Up may sue for damages actually suffered.
• D) Pop-Up may sue for punitive damages.
• E) None of the responses are correct.

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Definitions:

Job

A specific piece of work or task undertaken for payment or to achieve a particular result, often within the context of employment or contracting.

Owner's Withdrawals

Money or other assets taken out of a business by the owner for personal use, not considered a business expense.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities, representing the owner's claim on the business assets.

Expenses

Costs incurred in the process of earning revenue, typically classified as operating or non-operating expenses.