Law 2 – Week 2 – University Alliance

A signs a contract for snow skiing lessons, and the contract reads that it is “noncancelable” and that “no refunds will be made under the terms of the contract.” The ski lodge informs A that A has a “great potential to become a world‑class skier,” and consequently, A signs further contracts with the ski lodge for ski lessons. As time progresses, A spends $7,500 on ski lessons and has signed contracts, containing the language mentioned above, and paid $12,000 for future ski lessons. A is hit by a fast‑moving snowmobile and is injured to the extent that skiing is no longer possible. A seeks return on the $12,000 paid for ski lessons that A will not be able to take. The ski lodge says that this is a risk that A assumed in signing the contracts and paying in advance and furthermore will not give a refund because of the terms of the contract. A sues the ski lodge. Who wins? Does the doctrine of impossibility apply? Should the court imply a condition of “good health” into the contract for the ski lessons?

Amortization of prior service cost using years-of-service method.On January 1, 2010, Krupka LLC amended its pension plan which caused an increase of $6,000,000 in its projected benefit obligation. The company has 400 employees who are expected to receive benefits under the company’s defined-benefit pension plan. The personnel department provided the following information regarding expected employee retirements:Expected RetirementsNumber of Employees On December 3140 2010120 201160 2012160 201320 2014400The company plans to use the years-of-service method in calculating the amortization of prior service cost as a component of pension expense.InstructionsPrepare a schedule which shows the amount of annual prior service cost amortization that the company will recognize as a component of pension expense from 2010 through 2014.