The Consumer Protection Act Says That the Parties to a Contract

question 49

Essay

The Consumer Protection Act says that the parties to a contract must each have a copy of the contract or it will not be enforceable.Tim and Tess go to the Rapacious Furniture Co.to buy a couch.They have saved $500 from their salaries as employees in a sheltered workshop for the developmentally handicapped and do not intend to spend more than that,but the salesman takes advantage of their slower thought processes to fast-talk them into a couch which costs $1,200,the balance of which they must pay for in installments of $50 per month,a sum which is really beyond their means.Having read a book on contract law,the salesman makes sure that all the formalities are followed when Tim and Tess sign the contract,and he makes sure he gives the couple one copy of the contract and keeps one for Rapacious' files.Tim and Tess realize later that day that they cannot afford the couch and they ask Rapacious to tear up the contract.They are upset to find out that the furniture salesman will not do so.Can you advise them of any way out?

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing as scale increases.

Diseconomies of Scale

The phenomenon where production costs increase as a firm expands output, leading to reduced efficiency.

U-Shaped Long-Run Average Cost Curve

This describes the phenomenon where, over time, average costs first decrease with increased production, hit a minimum, and then increase with further production increase, forming a U-shape.

Minimum Cost

The lowest possible expense at which a particular set of goods or services can be produced or acquired.