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business
business law principles
Questions and Answers of
Business Law Principles
2 Does an intoxicated person have the capacity to enter into an enforceable contract?
1 What are some exceptions to the rule that a minor can disaffirm (avoid) any contract?
10.9 A Question of Ethics. John Sasson and Emily Springer met in January 2002. John worked for the U.S. Army as an engineer. Emily was an attorney with a law firm. When, six months later, John bought
10.8 Settlement of Claims. Shoreline Towers Condominium Owners Association in Gulf Shores, Alabama, authorized Resort Development, Inc. (RDI), to manage Shoreline’s property. On Shoreline’s
10.7 Consideration. In 1995, Helikon Furniture Co. appointed Tom Gaede as an independent sales agent for the sale of its products in parts of Texas. The parties signed a one-year contract that
10.6 Case Problem with Sample Answer. As a child, Martha Carr once visited her mother’s 108-acre tract of unimproved land in Richland County, South Carolina. In 1968, Betty and Raymond Campbell
10.5 Preexisting Duty. New England Rock Services, Inc., agreed to work as a subcontractor on a sewer project on which Empire Paving, Inc., was the general contractor. For drilling and blasting a
10.4 Consideration. Ben hired Lewis to drive his racing car in a race. Tuan, a friend of Lewis, promised to pay Lewis $3,000 if he won the race. Lewis won the race, but Tuan refused to pay the
10.3 Payment for Services to Another. Daniel, a recent college graduate, is on his way home for the Christmas holidays from his new job. Daniel gets caught in a snowstorm and is taken in by an
10.2 Hypothetical Question with Sample Answer. Bernstein owns a lot and wants to build a house according to a particular set of plans and specifications. She solicits bids from building contractors
10.1 Contract Modification. Tabor is a buyer of file cabinets manufactured by Martin. Martin’s contract with Tabor calls for delivery of fifty file cabinets at $40 per cabinet in five equal
5 In what circumstances might a promise be enforced despite a lack of consideration?
4 What is an accord and satisfaction?
3 What are some examples of contracts that lack consideration?
2 What is required for consideration to be legally sufficient?
1 What is consideration?
9.8 Video Question. Go to this text’s Web site at www. cengage.com/blaw/blt and select “Chapter 9.” Click on “Video Questions” and view the video titled Offer and Acceptance. Then answer
9.7 Critical Legal Thinking. Review the ways to terminate an offer listed earlier in this chapter. If a defendant offers to settle a case for a specific amount of money, and the plaintiff asks if the
9.6 A Question of Ethics. In 1980, Kenneth McMillan and his associate in a dental practice obtained life insurance policies that designated each the beneficiary of the other. They set up automatic
9.5 Offer. In August 2000, in California, Terry Reigelsperger sought treatment for pain in his lower back from chiropractor James Siller. Reigelsperger felt better after the treatment and did not
9.4 Case Problem with Sample Answer. In 2000, David and Sandra Harless leased 2.3 acres of real property at 2801 River Road S.E. in Winnabow, North Carolina, to their son-in-law and daughter, Tony
9.3 Intention. Music that is distributed on compact discs and similar media generates income in the form of “mechanical” royalties. Music that is publicly performed, such as when a song is
9.2 Hypothetical Question with Sample Answer. Chernek, the sole owner of a small business, has a large piece of used farm equipment for sale. He offers to sell the equipment to Bollow for $10,000.
9.1 Agreement. Ball writes to Sullivan and inquires how much Sullivan is asking for a specific forty-acre tract of land Sullivan owns. In a letter received by Ball, Sullivan states, “I will not
5 Can silence ever operate as an acceptance?
4 What elements are necessary for an effective acceptance?
3 In what circumstances will an offer be irrevocable?
2 What are some examples of nonoffers?
1 What elements are necessary for an effective offer?
8.10 Video Question. Go to this text’s Web site at www. cengage.com/blaw/blt and select “Chapter 8.” Click on “Video Questions” and view the video titled Bowfinger. Then answer the
8.9 Critical Legal Thinking. Review the list of basic requirements for contract formation. Then analyze the relationship entered into when a student enrolls in a college or university. Has a
8.8 A Question of Ethics. International Business Machines Corp. (IBM) hired Niels Jensen as a software sales representative. In 2001, IBM presented a new “Software Sales Incentive Plan” (SIP) at
8.7 Contract Enforceability. California’s Subdivision Map Act (SMA) prohibits the sale of real property until a map of its subdivision is filed with, and approved by, the appropriate state agency.
8.6 Case Problem with Sample Answer. In December 2000, Nextel South Corp., a communications firm, contacted R. A. Clark Consulting, Ltd., an executive search firm, about finding an employment manager
8.5 Interpretation of Contracts. East Mill Associates (EMA) was developing residential “units” in East Brunswick, New Jersey, within the service area of the East Brunswick Sewerage Authority
8.4 Implied Contract. Thomas Rinks and Joseph Shields developed Psycho Chihuahua, a caricature of a Chihuahua dog with a “do-not-back-down” attitude. They promoted and marketed the character
8.3 Contract Classification. High-Flying Advertising, Inc., contracted with Big Burger Restaurants to fly an advertisement above the Connecticut beaches. The advertisement offered $5,000 to any
8.2 Hypothetical Question with Sample Answer. Janine was hospitalized with severe abdominal pain and placed in an intensive care unit. Her doctor told the hospital personnel to order
8.1 Express versus Implied Contracts. Suppose that a local businessperson, McDougal, is a good friend of Krunch, the owner of a local candy store. Every day on his lunch hour McDougal goes into
5 Why have plain language laws been enacted? What rules guide the courts in interpreting contracts?
4 How does a void contract differ from a voidable contract? What is an unenforceable contract?
3 What is the difference between an implied-in-fact contract and an implied-in-law contract (quasi contract)?
2 What are the four basic elements necessary to the formation of a valid contract?
1 What is a contract? What is the objective theory of contracts?
7.11 Video Question. Go to this text’s Web site at www. cengage.com/blaw/blt and select “Chapter 7.” Click on “Video Questions” and view the video titled Ethics: Business Ethics an
7.10 Critical Legal Thinking. Human rights groups, environmental activists, and other interest groups concerned with unethical business practices have often conducted publicity campaigns against
7.9 A Question of Ethics. Steven Soderbergh is the Academy Award–winning director of Traffic, Erin Brockovich, and many other films. CleanFlicks, LLC, filed a suit in a federal district court
7.8 Ethical Leadership. In 1999, Andrew Fastow, chief financial officer of Enron Corp., asked Merrill Lynch, an investment firm, to participate in a bogus sale of three barges so that Enron could
7.7 Ethical Conduct. Ernest Price suffered from sickle-cell anemia. In 1997, Price asked Dr. Ann Houston, his physician, to prescribe OxyContin, a strong narcotic, for the pain. Over the next
7.6 Ethical Conduct. Richard Fraser was an “exclusive career insurance agent” under a contract with Nationwide Mutual Insurance Co. Fraser leased computer hardware and software from Nationwide
7.5 Case Problem with Sample Answer. Eden Electrical, Ltd., owned twenty-five appliance stores throughout Israel, at least some of which sold refrigerators made by Amana Co. Eden bought the
7.4 Ethical Decision Making. Shokun Steel Co. owns many steel plants. One of its plants is much older than the others. Equipment at the old plant is outdated and inefficient, and the costs of
7.3 Business Ethics and Public Opinion. Assume that you are a high-level manager for a shoe manufacturer. You know that your firm could increase its profit margin by producing shoes in Indonesia,
7.2 Hypothetical Question with Sample Answer. If a firm engages in “ethical” behavior solely for the purpose of gaining profits from the goodwill it generates, the “ethical” behavior is
7.1 Business Ethics. Some business ethicists maintain that whereas personal ethics has to do with “right” or “wrong” behavior, business ethics is concerned with “appropriate” behavior. In
5 What types of ethical issues might arise in the context of international business transactions?
4 What are six guidelines that an employee can use to evaluate whether his or her actions are ethical?
3 How do duty-based ethical standards differ from outcome-based ethical standards?
2 How can business leaders encourage their companies to act ethically?
1 What is business ethics, and why is it important?
6.12 Video Question. Go to this text’s Web site at www. cengage.com/blaw/blt and select “Chapter 6.” Click on “Video Questions” and view the video titled Casino. Then answer the following
6.11 Critical Legal Thinking. Ray steals a purse from an unattended car at a gas station. Because the purse contains money and a handgun, Ray is convicted of grand theft of property (cash) and grand
6.10 For Critical Analysis. Do you think that criminal procedure in this country is weighted too heavily in favor of accused persons? Can you think of a fairer way to balance the constitutional
6.9 A Question of Ethics. A troublesome issue concerning the constitutional privilege against self-incrimination has to do with the extent to which trickery by law enforcement officers during an
6.8 Trial. Robert Michels met Allison Formal through an online dating Web site in 2002. Michels represented himself as the retired chief executive officer of a large company that he had sold for
6.7 Case Problem with Sample Answer. Helm Instruction Co. in Maumee, Ohio, makes custom electrical control systems. Helm hired Patrick Walsh in September 1998 to work as comptroller. Walsh soon
6.6 Right to Counsel. The Sixth Amendment guarantees to a defendant who faces possible imprisonment the right to counsel at all critical stages of the criminal process, including the arraignment and
6.5 Larceny. In February 2001, a homeowner hired Jimmy Smith, a contractor claiming to employ a crew of thirty work- ers, to build a garage. The homeowner paid Smith $7,950 and agreed to make
6.4 Double Jeopardy. Armington, while robbing a drugstore, shot and seriously injured Jennings, a drugstore clerk. Armington was subsequently convicted of armed robbery and assault and battery in a
6.3 Types of Crimes. Which, if any, of the following crimes necessar- ily involve illegal activity on the part of more than one person? 1 Bribery. 2 Forgery. 3 Embezzlement. 4 Larceny. 5 Receiving
6.2 Hypothetical Question with Sample Answer. The following sit- uations are similar (all involve the theft of Makoto's laptop computer), yet they represent three different crimes. Identify the three
6.1 Criminal versus Civil Trials. In criminal trials, the defendant must be proved guilty beyond a reasonable doubt, whereas in civil trials, the defendant need only be proved guilty by a pre-
5 What is cyber crime? What laws apply to crimes committed in cyberspace?
4 What constitutional safeguards exist to protect persons accused of crimes? What are the basic steps in the criminal process?
3 What defenses might be raised by criminal defendants to avoid liability for criminal acts?
2 What are five broad categories of crimes? What is white-collar crime?
1 What two elements must exist before a person can be held liable for a crime? Can a corporation commit crimes?
5.11 Video Question. Go to this text’s Web site at www. cengage.com/blaw/blt and select “Chapter 5.” Click on “Video Questions” and view the video titled The Jerk. Then answer the following
5.10 Critical Thinking and Writing Assignment for Business. Delta Computers, Inc., makes computer-related products under the brand name “Delta,” which the company registers as a trademark.
5.9 A Question of Ethics. Custom Copies, Inc., in Gainesville, Florida, is a copy shop, reproducing and distributing, for profit, on request, material published and owned by others. One of the copy
5.8 Trademarks. In 1969, Jack Masquelier, a professor of pharmacology, discovered a chemical antioxidant made from the bark of a French pine tree. The substance supposedly assists in nutritional
5.7 Trade Secrets. Briefing.com offers Internet-based analyses of investment opportunities to investors. Richard Green is the company’s president. One of Briefing.com’s competitors is
5.6 Case Problem with Sample Answer. Gateway, Inc., sells computers, computer products, computer peripherals, and computer accessories throughout the world. By 1988, Gateway had begun its first
5.5 Patent Infringement. As a cattle rancher in Nebraska, Gerald Gohl used handheld searchlights to find and help calving animals (animals giving birth) in harsh blizzard conditions. Gohl thought
5.4 Domain Name Disputes. In 1999, Steve and Pierce Thumann and their father, Fred, created Spider Webs, Ltd., a partnership, to, according to Steve, “develop Internet address names.” Spider
5.3 Copyright Infringement. Professor Wise is teaching a summer seminar in business torts at State University. Several times during the course, he makes copies of relevant sections from business law
5.2 Hypothetical Question with Sample Answer. In which of the following situations would a court likely hold Maruta liable for copyright infringement? 1 At the library, Maruta photocopies ten pages
5.1 Patent Infringement. John and Andrew Doney invented a hard-bearing device for balancing rotors. Although they registered their invention with the U.S. Patent and Trademark Office, it was never
5 What steps have been taken to protect intellectual property rights in today's digital age?
4 What are trade secrets, and what laws offer protec- tion for this form of intellectual property?
3 What laws protect authors' rights in the works they generate?
2 Why are trademarks and patents protected by the law?
1 What is intellectual property?
4.10 Video Question. Go to this text’s Web site at www. cengage.com/blaw/blt and select “Chapter 4.” Click on “Video Questions” and view the video titled Jaws. Then answer the following
4.9 Critical Legal Thinking. What general principle underlies the common law doctrine that business owners have a duty of care toward their customers? Does the duty of care unfairly burden business
4.8 A Question of Ethics. White Plains Coat & Apron Co. is a New York–based linen rental business. Cintas Corp. is a nationwide business that rents similar products. White Plains had five-year
4.7 Defenses to Negligence. Neal Peterson’s entire family skied, and Peterson started skiing at the age of two. In 2000, at the age of eleven, Peterson was in his fourth year as a member of a ski
4.6 Case Problem with Sample Answer. Between 1996 and 1998, Donna Swanson received several anonymous, handwritten letters that, among other things, accused her husband, Alan, of infidelity. In 1998,
4.5 Negligence. In July 2004, Emellie Anderson hired Kenneth Whitten, a licensed building contractor, to construct a twostory addition to her home. The bottom floor was to be a garage and the second
4.4 Defamation. Lydia Hagberg went to her bank, California Federal Bank, FSB, to cash a check made out to her by Smith Barney (SB), an investment-services firm. Nolene Showalter, a bank employee,
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