Questions and Answers of Business Law Text and Cases

A state legislature enacted a statute that required any motorcycle operator or passenger on the state’s highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, sued the
Puerto Rico enacted a law that required specific labels on cement sold in Puerto Rico and imposed fines for any violations of these requirements.The law prohibited the sale or distribution of cement
Jason Trevor owns a commercial bakery in Blakely, Georgia, that produces a variety of goods sold in grocery stores. Trevor is required by law to perform internal tests on food produced at his plant
Internet giant Zoidle, a U.S. company, generated sales of £2.5 billion in the United Kingdom (UK) in 2013(roughly $4 billion in U.S. dollars). The U.K. corporate tax rate is usually between 20
Stan Garner resides in Illinois and promotes boxing matches for SuperSports, Inc., an Illinois corporation.Garner created the promotional concept of the “Ages” fights—a series of three boxing
Elaine Sweeney went to Ragged Mountain Ski Resort in New Hampshire with a friend. Elaine went snow tubing down a run designed exclusively for snow tubers. No Ragged Mountain employees were present in
While delivering materials to a construction site, he carelessly backs Dun’s truck into a passenger vehicle driven by Green. This is Richard’s second accident in six months. When the company
Donald and Gloria Bowden hosted a cookout at their home in South Carolina, inviting mostly business acquaintances. Justin Parks, who was nineteen years old, attended the party. Alcoholic beverages
While replacing screws in a gutter, John Baugh fell off a ladder and landed headfirst on his concrete driveway. He sustained a severe brain injury, which permanently limited his ability to perform
Two computer science majors, Trent and Xavier, have an idea for a new video game, which they propose to call “Hallowed.” They form a business and begin developing their idea. Several months
James, Chang, and Braden are roommates. They are music fans and frequently listen to the same artists and songs. They regularly exchange MP3 music files that contain songs from their favorite
Edward Hanousek worked for Pacific & Arctic Railway and Navigation Company (P&A) as a roadmaster of the White Pass & Yukon Railroad in Alaska. As an officer of the corporation, Hanousek was
The following situations are similar, but each represents a variation of a particular crime. Identify the crime and point out the differences in the variations.1. Chen, posing fraudulently as Diamond
Heesham Broussard obtained counterfeit money instruments. To distribute them, he used account information and numbers on compromised FedEx accounts procured from hackers. Text messages from Broussard
Time-Limited Group Assignment—Cyber Crime.Cyber crime costs consumers millions of dollars every year. It costs businesses, including banks and other credit card issuers, even more. Nonetheless,
Mitsui Bank hired Ross Duncan as a branch manager in one of its Southern California locations.At that time, Duncan received an employee handbook informing him that Mitsui would review his performance
Review the basic requirements for a valid contract listed at the beginning of this chapter. Now consider the relationship entered into when a student enrolls in a college or university.1. One group
Shane Durbin wanted to have a recording studio custom-built in his home. He sent invitations to a number of local contractors to submit bids on the project. Rory Amstel submitted the lowest bid,
John operates a motorcycle repair shop from his home but finds that his business is limited by the small size of his garage. Driving by a neighbor’s property, he notices a for-sale sign on a large,
Claudia Aceves borrowed $845,000 from U.S. Bank to buy a home. Less than two years into the loan, she could no longer afford the monthly payments. The bank notified her that it planned to foreclose
Renee Beaver started racing go-karts competitively in 2020, when she was fourteen. Many of the races required her to sign an exculpatory clause to participate. She or her parents regularly signed
Chelene had been a caregiver for Marta’s elderly mother, Janis, for nine years. Shortly before Janis passed away, Chelene convinced her to buy Chelene’s house for Marta. Janis died before the
Marguerite Eaton and Bobby Joe Waldrop moved into a mobile home on land owned by her son, James. Bobby Joe asked James to transfer that portion of the land to him and Marguerite, stating falsely that
Evelyn Vollmer orally agreed to loan Danny Lang $150,000 to make an investment in a local nightclub.The loan was to be repaid from the profits received from the investment. Their agreement was never
Val’s Foods signs a contract to buy 1,500 pounds of basil from Sun Farms, a small organic herb grower, if an independent organization inspects the crop and certifies that it contains no pesticide
Lisa Goldstein reserved space for a marriage ceremony in a building owned by Orensanz Events, LLC, in New York City. The rental agreement provided that on cancellation of the event “for any reason
Kyle Bruno enters into a contract with X Entertainment to be a stuntman in a movie. Bruno is widely known as the best motorcycle stuntman in the business, and the movie, Xtreme Riders, has numerous
Before buying a house, Dean and Donna Testa hired Ground Systems, Inc. (GSI), to inspect the sewage and water disposal system. GSI reported a split system with a watertight septic tank, a wastewater
Frances Morelli agreed to sell Judith Bucklin a house in Rhode Island for $177,000. The sale was supposed to be closed by September 1. The contract included a provision that “if Seller is unable to
Myrtle Jackson owns several commercial buildings that she leases to businesses, one of which is a restaurant. The lease states that tenants are responsible for securing all necessary insurance
Brian owes Jeff $1,000. Ed tells Brian to give him the $1,000 and he will pay Jeff. Brian gives Ed the $1,000, but Ed never pays Jeff. Can Jeff successfully sue Ed for the $1,000? Why or why not?
Guy Holcomb owns and operates Oasis Goodtime Emporium, an adult entertainment establishment.Holcomb wanted to create an adult Internet system for Oasis that would offer customers adult theme videos
Under a contract between Great Products, Inc., in New York and National Sales Corporation in Dallas, if delivery is “F.O.B. New York,”the risk passes when Great Products puts the goods in a
GFI, Inc., a Hong Kong company, makes audio decoder chips, one of the essential components used in the manufacture of MP3 players. Egan Electronics contracts with GFI to buy 10,000 chips on an
Brite Images, Inc. (BI), agrees to sell Catalog Corporation (CC) five thousand posters of celebrities, to be delivered on May 1. On April 1, BI repudiates the contract. CC informs BI that it expects
Milan purchased saffron extract, marketed as “America’s Hottest New Way to a Flat Belly,” online from Dr. Chen.The website stated that recently published studies showed a significant weight
Robert Durbin, a student, borrowed funds from a bank for his education and signed a promissory note for their repayment. The bank loaned the funds under a federal program designed to assist students
Peter Gowin was an employee of a granite countertop business owned by Joann Stathis. In November 2022, Gowin signed a promissory note agreeing to pay$12,500 in order to become a co-owner of the
Goods exported to a foreign country for repair or alteration can qualify for tariff-free or reduced-tariff treatment when they re-enter the United States. But the goods do not qualify for favorable
RPM Pizza, Inc., issued a check for $96,000 to Systems Marketing for an advertising campaign. A few days later, RPM decided not to go through with the deal and placed a written stop-payment order on
Lyn writes a check for $900 to Mac, who indorses the check in blank and transfers it to Jan. She presents the check to Omega Bank, the drawee bank, for payment. Omega does not honor the check. Is Lyn
Roy Supply, Inc., and R. M. R. Drywall, Inc., had checking accounts at Wells Fargo Bank. Both accounts required all checks to carry two signatures—that of Edward Roy and that of Twila June Moore,
Gary goes grocery shopping and carelessly leaves his checkbook in his shopping cart. His checkbook, with two blank checks remaining, is stolen by Dolores.On May 5, Dolores forges Gary’s name on a
Under the revised Article 4, a bank is no longer required to include the customer’s canceled checks when it sends monthly statements to the customer. A bank may simply itemize the checks (by
Paul Barton owned a small property-management company, doing business as Brighton Homes. In October, Barton went on a spending spree. First, he bought a Bose surround-sound system for his home from
Three months ago, Janet Hart’s husband of twenty years died of cancer. Although he had medical insurance, he left Janet with outstanding medical bills of more than $50,000. Janet has worked at the
Dean Brothers Corp. owns and operates a steel-drum manufacturing plant. Lowell Wyden, the plant superintendent, hired Best Security Patrol, Inc. (BSP), a security company, to guard the property and
Rick Saldona began working as a traveling salesperson for Aimer Winery in 2009. Sales constituted 90 percent of Saldona’s work time. Saldona worked an average of fifty hours per week but received
Amaani Lyle, an African American woman, took a job as a scriptwriters’ assistant at Warner Brothers Television Productions. She worked for the writers of Friends, a popular, adult-oriented
Carlos Del Rey decided to open a fast-food Mexican restaurant and signed a franchise contract with a national chain called La Grande Enchilada. Under the franchise agreement, Del Rey purchased the
Tom George was the sole owner of Turbine Component Super Market, LLC(TCSM), when its existence was terminated by the state of Texas. A TCSM creditor, Turbine Resources Unlimited, filed and won a suit
Jordan Mendelson is interested in purchasing a franchise in a meal-preparation business.Customers will come to the business to assemble gourmet dinners and then take the prepared meals to their homes
Grace Tarnavsky and her sons, Manny and Jason, bought a ranch known as the Cowboy Palace in March 2019. The three orally agreed to share the business for five years. Grace contributed 50 percent of
At least six months before the Summer Olympic Games in Atlanta, Georgia, a group made up of Stafford Fontenot, Steve Turner, Mike Montelaro, Joe Sokol, and Doug Brinsmade agreed to sell Cajun food at
The city of Papagos, Arizona, had a deteriorating bridge in need of repair on a prominent public roadway. The city posted notices seeking proposals for an artistic bridge design and
Randall and Peggy Norman operated a dairy farm in Pine River, Minnesota. About ten years after the operation was begun, the cows started to experience health issues. Over the next eighteen years, the
William Sharp was the sole shareholder and manager of Chickasaw Club, Inc., an S corporation that operated a popular nightclub of the same name in Columbus, Georgia. Sharp maintained a corporate
Lester Fulmer sold H2O Lifts and Ramps, LLC (H2O), to Hurt-Hoover Investments, LLC (HHI). HHI agreed to pay$550,000 of the price by a note in thirty-six installments. From the installments, HHI
Mario Bonsetti and Rico Sanchez incorporated Gnarly Vulcan Gear, Inc. (GVG), to manufacture windsurfing equipment. Bonsetti owned 60 percent of the corporation’s stock, and Sanchez owned 40
Dale Emerson served as the chief financial officer for Reliant Electric Company, a distributor of electricity serving portions of Montana and North Dakota. Reliant was in the final stages of planning
David Gain is the chief executive officer(CEO) of Forest Media Corp., which is interested in acquiring RS Communications, Inc. To initiate negotiations, Gain meets with RS’s CEO, Gill Raz, on
Assume that the Securities and Exchange Commission (SEC) has a rule under which it enforces statutory provisions prohibiting insider trading only when the insiders make monetary profits for
The Internet Corporation for Assigned Names and Numbers (ICANN) is a nonprofit entity that organizes Internet domain names. It is governed by a board of directors elected by various groups with
Residents of Lake Caliopa, Minnesota, began noticing an unusually high number of lung ailments among the local population. Several concerned citizens pooled their resources and commissioned a study
A McDonald’s Happy Meal® consists of an entrée, a small order of French fries, a small drink, and a toy.In the early 1990s, McDonald’s Corp. began to aim its Happy Meal marketing at children
Superior Wholesale Corporation planned to purchase Regal Furniture, Inc., and wished to determine Regal’s net worth. Superior hired Lynette Shuebke, of the accounting firm Shuebke Delgado, to
In early 2018, Bennett, Inc., offered a substantial number of new common shares to the public. Harvey Helms had a long-standing interest in Bennett because his grandfather had once been president of
Luis and Maria Rojas contracted to buy a house in Westchester County, New York, from Andrew and Karen Paine. The house was on property designated as “Lot No. 8” on a subdivision map filed in the
Vanessa Denai owned forty acres of land in rural Louisiana. On the property were a 1,600-square-foot house and a metal barn. Denai met Lance Finney, who had been seeking a small plot of rural
Unique situations present particular ethical problems. In this final Focus on Ethics feature, we consider some of the ethical dimensions of the special legal topics discussed in the chapters of this
Suppose that your neighbor puts a "For sale" sign on her car, offering to sell it for $6,000. You learn that she is moving to another state and needs the extra cash to help finance the move. You know
Would it be ethical for a U.S. firm to choose not to do business in a foreign country that requires the use of its own language in the legal documents that govern the firm’s business transactions?
Spectrum Stores, Inc., a gasoline retailer, filed a suit against Citgo Petroleum Corp. in a U.S. court. Spectrum alleged that Citgo conspired with other oil production companies to fix the prices of
Technology Incubation and Entrepreneurship Training Society (TIETS) is an association made up of members of a local community in India. TIETS contracted with Mandana Farhang, a resident of
Taconic Plastics, Ltd., is a manufacturer incorporated in Ireland with its principal place of business in New York. Taconic enters into a contract with a German firm, Werner Voss Architects and
Hi-Cola Corporation, a U.S. firm, markets a popular soft drink. The formula is secret, but with careful chemical analysis, its ingredients could be discovered. What can Hi-Cola do to prevent its
Should all commercial arrangements subject to the antitrust laws be evaluated under the rule of reason? Discuss
E.I. DuPont de Nemours and Co. manufactures a special fiber that is used to make body armor, fiber-optic cables, and other products. In fact, DuPont controls more than 70 percent of the U.S. market
Dayton Superior Corp. makes and distributes commercial concrete construction products. Dayton’s customers, including Spa Steel Products, Inc., compete with each other to sell Dayton’s products.
Maple Corporation conditions the sale of its syrup on the buyer’s agreement to buy Maple’s pancake mix. What type of arrangement is this? What factors would a court consider to decide whether
The Federal Communications Commission (FCC) monitors indecent speech—that is, “language that describes, in terms patently offensive as measured by contemporary community standards for the
Should an individual or organization sue an agency before the agency takes formal enforcement action? Discuss your answer.
Sikorsky Aircraft Corp. contracted with the U.S. Department of Defense (DoD). Under the Freedom of Information Act, a reporter asked the DoD for copies of all DoD requests that Sikorsky fix problems
Itex Corporation would like to know what information federal agencies have about its business operations so that it will know what its competitors may be able to learn about it. Under what federal
The Securities and Exchange Commission (SEC) makes rules regarding what must be in a stock prospectus, prosecutes and adjudicates alleged violations, and prescribes punishment. This gives the SEC
Stella Jankowski added her niece, Genevieve Viarengo, as a joint owner on Jankowski’s bank accounts. In executing a will, Jankowski told her attorney, John Wabiszczewicz, that she wanted her estate
Under what circumstances might it be appropriate to ignore the provisions in a will?
Katherine Hagan executed a will that left her estate to various charitable organizations, such as the Humane Society, and expressly excluded her relatives. When Hagan died, her estate was worth $1.48
Sherman Hemsley was a wellknown actor from the 1970s. Most notably, he played George Jefferson on the television shows “All in the Family” and “The Jeffersons.” He was born to Arsena Chisolm
Lee’s will provides for a distribution of his property. First, the assets must be collected and inventoried, however. They may also need to be appraised. Creditors’ claims must be sorted out.
Sheila makes out a will, leaving her property in equal thirds to Mark and Paula, her children, and Carol, her niece. Two years later, Sheila is adjudged mentally incompetent, and that same year, she
Perry Armstrong owned the Monona Center, a mall. One of the mall’s eight tenants, Ring’s All-American Karate, occupied about one-third of the space under a fiveyear lease. Ring’s began to
What is a landlord’s ethical duty with respect to keeping rental premises “fit for human habitation”?
S&V Liquor, Inc., leased retail space from the Charles Downey Family Limited Partnership for a five-year term for $3,333.33 per month. Four months before the end of the term, Downey offered to
Gi Hwa Park entered into a lease with Landmark HHH, LLC, for space in the Plaza at Landmark, a shopping center. The lease required the landlord to keep the roof “in good repair.” In the space,
Flawlace, LLC, leased unfinished commercial real estate in Las Vegas, Nevada, from Francis Lin to operate a beauty salon. The lease required Flawlace to obtain a “certificate of occupancy” from
You are a college student and plan to attend classes for nine months. You sign a twelve-month lease for an apartment. Answer fully each of the following questions:1. You have a summer job in another
Eve orally agrees to rent an apartment to Nancy for a six-month term. Is this lease enforceable if it is not in writing?
Should eminent domain be used to promote private developments? Discuss your answer.
What public policies underlie the doctrine of adverse possession?

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