Questions and Answers of Introduction to Business Law

Offer and Acceptance. Continental Insurance Co. issued a policy to cover shipments by Oakley Fertilizer, Inc. Oakley agreed to ship three thousand tons of fertilizer by barge to Ameropa North America
A Question of Ethics Daniel Fox owned Fox & Lamberth Enterprises, Inc., a kitchen and bath remodeling business, in Dayton, Ohio. Fox leased a building from Carl and Bellulah Hussong. Craftsmen Home
Case Analysis Question Go to Appendix F at the end of this text and examine Case No. 3 [Spray-Tek, Inc. v. Robbins Motor Transportation, Inc., 426 F.Supp.2d 875(W.D.Wis. 2006)]. This case has been
Video Question Go to this text’s Web site at www.cengage.com/blaw/blt and select “Chapter 15.”Click on “Video Questions” and view the video titled Sales and Lease Contracts: Price as a
What is a contract? What is the objective theory of contracts?AppendixLO1
What are the four basic elements necessary to the formation of a valid contract?AppendixLO1
What is the difference between an implied-in-fact contract and an implied-in-law contract (quasi contract)?AppendixLO1
How does a void contract differ from a voidable contract? What is an unenforceable contract?AppendixLO1
What rules guide the courts in interpreting contracts?AppendixLO1
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
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 around-the-clock
Contract Classifi cation. Jay’s Flying Advertising, LLC, contracted with Big Bob’s Burger restaurant to fl y an advertisement above the Connecticut beaches. The advertisement offered$5,000 to any
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 through
Case Problem with Sample Answer In December 2000, Nextel South Corp., a communications fi rm, contacted R. A. Clark Consulting, Ltd., an executive search fi rm, about fi nding an employment manager
Contract Enforceability. California’s Subdivision Map Act(SMA) prohibits the sale of real property until a map of its subdivision is fi led with, and approved by, the appropriate state agency. In
Interpretation of Contracts. Lisa and Darrell Miller married in 1983 and had two children, Landon and Spencer. The Millers divorced in 2003 and entered into a “Joint Custody Implementation Plan”
A Question of Ethics International Business Machines Corp. (IBM) hired Niels Jensen in 2000 as a software sales representative. In 2001, IBM presented a new “Software Sales Incentive Plan” (SIP)
Critical Legal Thinking. Review the basic requirements for a valid contract listed at the beginning of this chapter. In view of those requirements, analyze the relationship entered into when a
Binding versus Persuasive Authority. A county court in Illinois is deciding a case involving an issue that has never been addressed before in that state’s courts. The Iowa Supreme Court, however,
Remedies. Arthur Rabe is suing Xavier Sanchez for breaching a contract in which Sanchez promised to sell Rabe a Van Gogh painting for $150,000.1 In this lawsuit, who is the plaintiff, and who is the
Legal Systems. What are the key differences between a common law system and a civil law system? Why do some countries have common law systems and others have civil law systems?
Hypothetical Question with Sample Answer This chapter discussed a number of sources of American law.Which source of law takes priority in each of the following situations, and why?1 A federal statute
Philosophy of Law. After World War II ended in 1945, an international tribunal of judges convened at Nuremberg, Germany. The judges convicted several Nazi war criminals of“crimes against
Reading Citations. Assume that you want to read the court’s entire opinion in the case of Citizens’ Committee to Save Our Canyons v. Krueger, 513 F.3d 1169 (10th Cir. 2008). (Note that this case
Stare Decisis. In the text of this chapter, we stated that the doctrine of stare decisis “became a cornerstone of the English and U.S. judicial systems.” What does stare decisis mean, and why has
Court Opinions. Read through the subsection entitled “Case Titles and Terminology” in the appendix following this chapter.What is the difference between a concurring opinion and a majority
A Question of Ethics On July 5, 1884, Dudley, Stephens, and Brooks—“all able-bodied English seamen”—and a teenage English boy were cast adrift in a lifeboat following a storm at sea. They had
Critical Legal Thinking. Courts can overturn precedents and thus change the common law. Should judges have the same authority to overrule statutory law? Should they be able to overturn administrative
Critical Thinking and Writing Assignment for Business. John’s company is involved in a lawsuit with a customer, Beth. John argues that for fi fty years, in cases involving circumstances similar to
Generally, what kind of conduct is prohibited by Title VII of the Civil Rights Act of 1964, as amended?AppendixLO1
What is the difference between disparate-treatment discrimination and disparate-impact discrimination?AppendixLO1
What remedies are available under Title VII of the 1964 Civil Rights Act, as amended?AppendixLO1
What federal acts prohibit discrimination based on age and discrimination based on disability?AppendixLO1
What are three defenses to claims of employment discrimination?AppendixLO1
Title VII Violations. Discuss fully whether either of the following actions would constitute a violation of Title VII of the 1964 Civil Rights Act, as amended.1 Tennington, Inc., is a consulting fi
Hypothetical Question with Sample Answer Chinawa, a major processor of cheese sold throughout the United States, employs one hundred workers at its principal processing plant. The plant is located in
Religious Discrimination. Gina Gomez, a devout Roman Catholic, worked for Sam’s Department Stores, Inc., in Phoenix, Arizona. Sam’s considered Gomez a productive employee because her sales
Case Problem with Sample Answer For twenty years, Darlene Jespersen worked as a bartender at Harrah’s Casino in Reno, Nevada. In 2000, Harrah’s implemented a “Personal Best” program that
Discrimination Based on Disability. Cerebral palsy limits Steven Bradley’s use of his legs. He uses forearm crutches for shortdistance walks and a wheelchair for longer distances. Standing for more
Discrimination Based on Gender. The Milwaukee County Juvenile Detention Center established a new policy that required each unit of the facility to be staffed at all times by at least one offi cer of
Sexual Harassment. The Metropolitan Government of Nashville and Davidson County, Tennessee (Metro), began looking into rumors of sexual harassment by the Metro School District’s employee relations
A Question of Ethics Titan Distribution, Inc., employed Quintak, Inc., to run its tire mounting and distribution operation in Des Moines, Iowa. Robert Chalfant worked for Quintak as a second-shift
Case Analysis Question Go to Appendix F at the end of this text and examine Case No. 5 [Burlington Northern and Santa Fe Railway Co. v. White, 548 U.S. 53, 126 S.Ct. 2405, 165 L.Ed.2d 345 (2006)].
What advantages and disadvantages are associated with the sole proprietorship?AppendixLO1
What is a franchise? What are the most common types of franchises?AppendixLO1
What laws govern a franchising relationship?AppendixLO1
What terms and conditions are typically included in a franchise contract?AppendixLO1
What is wrongful termination? In what types of situations do courts typically fi nd that a franchisor has wrongfully terminated a franchise?AppendixLO1
Control of a Franchise. National Foods, Inc., sells franchises to its fast-food restaurants, known as Chicky-D’s. Under the franchise agreement, franchisees agree to hire and train employees
Hypothetical Question with Sample Answer Omega Computers, Inc., is a franchisor that grants exclusive physical territories to its franchisees with retail locations, including Pete’s Digital
Franchise Termination. J.C., Inc., operated McDonald’s restaurants in Lancaster, Ohio, under a franchise agreement with McDonald’s Corp. The agreement required J.C. to make monthly payments of
Sole Proprietorship. James Ferguson operates “Jim’s 11-E Auto Sales” in Jonesborough, Tennessee, as a sole proprietorship. In 1999, Consumers Insurance Co. issued a policy to “Jim Ferguson,
Case Problem with Sample Answer Walid Elkhatib, a Palestinian Arab, emigrated to the United States in 1971 and became a U.S. citizen. Eight years later, Elkhatib bought a Dunkin’ Donuts, Inc.,
Sole Proprietorship. Julie Anne Gaskill is an oral and maxillofacial surgeon in Bowling Green, Kentucky. Her medical practice is a sole proprietorship consisting of her as the sole surgeon, with offi
A Question of Ethics In August 2004, Ralph Vilardo contacted Travel Center, Inc., in Cincinnati, Ohio, to buy a trip to Florida in December for his family to celebrate his fi ftieth wedding
Critical Legal Thinking. Suppose that a franchisor requires the franchisee to purchase a particular type of van that will be used to deliver the franchised carpet-cleaning services to the public.If
Critical Thinking and Writing Assignment for Business. Jordan Mendelson is interested in starting a kitchen franchise business.Customers will come to the business to assemble gourmet dinners and then
What are the three essential elements of a partnership?AppendixLO1
What are the rights and duties of partners in an ordinary partnership?AppendixLO1
What is meant by joint and several liability? Why is this often considered to be a disadvantage of the partnership form of business?AppendixLO1
What advantages do limited liability partnerships offer to businesspersons that are not offered by general partnerships?AppendixLO1
What are the key differences between the rights and liabilities of general partners and those of limited partners?AppendixLO1
Partnership Formation. Daniel is the owner of a chain of shoe stores. He hires Rubya to be the manager of a new store, which is to open in Grand Rapids, Michigan. Daniel, by written contract, agrees
Hypothetical Question with Sample Answer Dorinda, Luis, and Elizabeth form a limited partnership. Dorinda is a general partner, and Luis and Elizabeth are limited partners. Discuss fully whether each
Indications of Partnership. At least six months before the 1996 Summer Olympic Games in Atlanta, Georgia, Stafford Fontenot, Steve Turner, Mike Montelaro, Joe Sokol, and Doug Brinsmade agreed to sell
Case Problem with Sample Answer In August 2003, Tammy Duncan began working as a waitress at Bynum’s Diner, which was owned by her mother, Hazel Bynum, and her stepfather, Eddie Bynum, in Valdosta,
Partnership Dissolution. Nine minority partners each owned one-half of 1 percent of J&J Celcom, a partnership with AT&T, which owned the rest. AT&T, using its majority power, voted to buy out the
Limited Partnership. James Carpenter contracted with Austin Estates, LP, to buy property in Texas. Carpenter asked Sandra McBeth to invest in the deal. He admitted that a dispute had arisen with the
A Question of Ethics In 1991, Hassan Mardanlou and Ali Ghaffarian signed a lease for 3960 South State Street in Salt Lake City, Utah. Ghaffarian paid $6,000 for the fi rst and last months’ rent,
Critical Thinking and Writing Assignment for Business. Sandra Lerner and Patricia Holmes were friends. One evening, while applying nail polish to Lerner, Holmes layered a raspberry color over black
What advantages do limited liability companies offer to businesspersons that are not offered by sole proprietorships or partnerships?AppendixLO1
How are limited liability companies formed, and who decides how they will be managed and operated?AppendixLO1
What are the two options for managing limited liability companies?AppendixLO1
What is a joint venture? How is it similar to a partnership? How is it different?AppendixLO1
What are the essential characteristics of joint stock companies, syndicates, business trusts, and cooperatives, respectively?AppendixLO1
Hypothetical Question with Sample Answer Faraway Corp. is considering entering into two contracts, one with a joint stock company that distributes home products east of the Mississippi River and the
Limited Liability Companies. Joe, a resident of New Jersey, wants to open a restaurant. He asks his friend Kay, who is an experienced attorney and a New Yorker, for her business and legal advice in
Foreign Limited Liability Companies. Whalen Murdock and Cary Hansen organized Capital Care, LLC, in Nebraska. Capital Care operated, and Murdock and Hansen managed, Heartland Care Center in Abilene,
Case Problem with Sample Answer Westbury Properties, Inc., and others (collectively the Westbury group)owned, managed, and developed real property. Jerry Stoker and the Stoker Group, Inc. (the
Limited Liability Companies. A limited liability company (LLC)owned a Manhattan apartment building that was sold. The owners of 25 percent of the membership interests in the LLC fi led a lawsuit on
A Question of Ethics Blushing Brides, LLC, a publisher of wedding planning magazines in Columbus, Ohio, opened an account with Gray Printing Co. in July 2000. On behalf of Blushing Brides, Louis
Critical Legal Thinking. Although a limited liability entity may be the best organizational form for most businesses, a signifi -cant number of fi rms may be better off as a corporation or some other
What steps are involved in bringing a corporation into existence?AppendfixLO1
What is the difference between a de jure corporation and a de facto corporation?AppendfixLO1
In what circumstances might a court disregard the corporate entity (“pierce the corporate veil”) and hold the shareholders personally liable?AppendfixLO1
What are the basic differences between a merger, a consolidation, and a share exchange?AppendfixLO1
What are the two ways in which a corporation can be voluntarily dissolved?AppendfixLO1
Corporate Status. Three brothers inherited a small papersupply business from their father, who had operated the business as a sole proprietorship. The brothers decided to incorporate under the name
Hypothetical Question with Sample Answer Jolson is the chair of the board of directors of Artel, Inc., and Douglas is the chair of the board of directors of Fox Express, Inc. Artel is a manufacturing
Corporate Powers. Kora Nayenga and two business associates formed a corporation called Nayenga Corp. for the purpose of selling computer services. Kora, who owned 50 percent of the corporate shares,
Case Problem with Sample Answer Thomas Persson and Jon Nokes founded Smart Inventions, Inc., in 1991 to market household consumer products. The success of their fi rst product, the Smart Mop,
Dissolution. Clara Mahaffey operated Mahaffey’s Auto Salvage, Inc., in Dayton, Ohio, as a sole proprietorship. In 1993, Kenneth Stumpff and Mahaffey’s son, Richard Harris, joined the fi rm.
Improper Incorporation. Denise Rubenstein and Christopher Mayor agreed to form Bayshore Sunrise Corp. (BSC) in New York to rent certain premises and operate a laundromat.BSC entered into a
Involuntary Dissolution. Charles Brooks began working as an independent supplier for Georgia-Pacific, LLC, when the paper products manufacturer acquired a mill in Crossett, Arkansas.Brooks soon
A Question of Ethics Mike Lyons incorporated Lyons Concrete, Inc., in Montana, but did not fi le its fi rst annual report, so the state involuntarily dissolved the fi rm in 1996.Unaware of the
Critical Legal Thinking. If you had started a business, under what circumstances would you be willing to give up a substantial percentage of its ownership to obtain venture capital fi nancing?
Video Question Go to this text’s Web site at www.cengage.com/blaw/blt and select “Chapter 29.”Click on “Video Questions” and view the video titled Corporation or LLC: Which Is Better? Then
What are the duties of corporate directors and offi cers?AppendixLO1
Directors are expected to use their best judgment in managing the corporation. What must directors do to avoid liability for honest mistakes of judgment and poor business decisions?AppendixLO1
What is a voting proxy? What is cumulative voting?AppendixLO1

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