Sarah works for a company that has offered a promotion if she is willing to relocate. Sarah accepts the position and puts her house on the market right away. She sells her house the first day that the realtor holds an open house. The buyer agrees to pay cash for the full purchase price of the house. Sarah is thrilled, except that it means that she will have to put her furniture in storage until she finds another house in her new city. She enters into a written contract with Safe Storage, Inc. The agreement includes a clause excusing Safe Storage, Inc. from any liability for loss or damage, even if the loss or damage results from Safe Storage's negligent acts. Because of Self Storage's negligence, a fire destroys the warehouse and all of its contents, including Sarah's household goods and
furniture. Sarah claims that Safe Storage, Inc. is liable for the full value of the contents, which is approximately $10,000. Is Sarah correct?
A. Yes, because storage warehouses are strictly liable for loss or damage, regardless of fault and regardless of exculpatory clauses.
B. No, because there was equal bargaining power between Sarah and Safe Storage, Inc.
C. Yes, because exculpatory clauses are illegal and never enforceable.
D. Probably, because often a court will reject an exculpatory clause against a bailor who is a consumer.
Answer: D
You might also like to view...
Assume that there is a decline in inventory value in one period, then there is a reversal of value to the original or higher value and a later period. Which of the following statements about recognition of the loss is true?
A) The decline in inventory value and related loss should be recognized in the first period and reversed in the second period in all situations. B) The decline in inventory value and related loss should be recognized in the first period and reversed in the second period but only if the second period is within the same fiscal year. C) The decline in inventory value and related loss should be recognized in the first period and reversed in the second period but only if the second period is within a different fiscal year. D) The decline in inventory value and related loss should never be recognized.
The cognitive condition that occurs to an individual in a work organization when the demands of the role overwhelm the person’s ability to perform the task is called?
a. role conflict b. role ambiguity c. role overload d. role intention e. role creation
As a basis for measuring performance for a particular accounting period, the cash basis of accounting has three weaknesses. Briefly describe the three weaknesses
The major difference between a typical credit account and a debit-only transfer system is that in the debit-only transfer system, _____
a. interest is assessed from the billing date b. the purchase price is immediately deducted from the consumer's bank account c. no interest is charged if payment is made at the billing date d. the consumer is billed monthly on the basis of the outstanding balance