The Boosters of the Athletic Program at a Small College

question 12

Essay

The boosters of the athletic program at a small college were trying to get uniforms and equipment for its football team.By a stroke of luck, a wealthy alumnus of the school happened to have forty football helmets.The boosters wrote and asked him to donate the helmets.The alumnus wrote back a very short letter in which he stated only that he would donate the helmets.Unfortunately, during the first day of practice in the hot sun, the helmets melted and became unusable.The boosters are demanding that the alumnus replace the helmets because he has breached an express warranty and the implied warranty of merchantability.The alumnus contends that there was no contract because there was no consideration, and thus he is liable for nothing.Evaluate each of the claims individually and state which party should prevail.

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Definitions:

Actuarial Assumptions

The estimates and hypotheses used by actuaries to calculate insurance risks and liabilities, including rates of mortality, morbidity, and interest.

Service Cost

The actuarial present value of benefits earned by employees during a given period, included in the calculation of pension expense.

Actuarial Present Value

A calculation used to determine the present value of a future series of payments or receipts, taking into account variables such as mortality, investment earnings, and expense risks.