Bait and Switch

Assignment #4 – Bait and Switch

Law, Ethics, and Corporate Governance

LEG 500

Date May 24, 2011

1) Betty drove three hours in one-hundred degree heat. Explain if this fact has any bearing on whether or not the dealer must perform in accordance with the published advertisement

The issue at hand is whether the customer has the right to claim the published advertisement, rather than her opinion that her travels were unpleasant because she drove many hours in uncomfortable conditions to the dealer expecting to buy the automobile that was advertised. The Federal Trade Commission (FTC) is responsible for regulating false advertising and entrusted to protect consumers from what would be considered bait and switch. In this case, the fact that Betty drove three hours in one-hundred degree heat is not regulated by the FTC laws; therefore it has no relevance to the dealer.

A car dealer is not required to sell a person a car just because that person underwent some difficulty to get to the dealership. Although Betty might argue that she relied to her detriment (the doctrine of detrimental reliance) on the ad, the fact that Betty experienced some hardship to make her offer to purchase the truck does not obligate the dealership to accept her offer.

2) When Tony said over the phone “three thousand dollars firm,” explain whether or not he was making an offer that, if accepted, would bind the dealership in contract.

The Law of Contract in modern terms could be defined as an agreement containing a promise enforceable in law. Contract has component; Agreement, offer and acceptance; mutuality and consideration; Mentally Competent parties and a legal objective (Worthington, 1994). Simple or informal contracts are called 'parol' contracts. Which means or verbal, when we speak of Formal versus Simple (informal), we are distinguishing the difference between a Formal Contract which is written, signed, and sealed, and a Simple (informal) Contract which is verbal or oral. “An...