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law for business
Questions and Answers of
Law for Business
Reggie Bluiett worked at the Silver Slipper Gambling Hall and Saloon. She received her weekly paycheck made out to her from the Silver Slipper. She indorsed the check in blank and left it on her
Reliable Janitorial Service, maintained a bank account with AmSouth Bank. Rosa Pennington was employed by Reliable as a bookkeeper/office manager. She deposited checks made payable to Reliable but
Nancy Gabbard, the office manager for the Golden Years Nursing Home, received at the nursing home Social Security checks drawn on the United States Treasury and made payable either to individual
Galatia Community State Bank honored a check it took for collection for $5,550, which was the amount imprinted by a check-writing machine in the center underlined section of the check commonly used
Holiday made out a promissory note to Anderson, leaving the date of payment of the note blank. Anderson filled in the words “on demand” in the blank without Holiday’s knowledge. Does this alter
Holly Hill Acres, Ltd. executed a promissory note and mortgage and delivered them to Rogers. The note contained the following stipulation: This note with interest is secured by a mortgage on real
I Robert Harrison owe Peter Jacob $25,000 (twenty-five thousand dollars) as of 3/27/08 for the following:1) $15,000 for Caterpillar loader.2) $5,000 for a loan.3) $5,000 for a tag-a-long
Frank agrees to build a garage for Sarah for $25,000. Sarah offers to sign either a contract showing her obligation to pay Frank $25,000 or a negotiable promissory note for $25,000 payable to the
Is the following instrument a note, a check, or a draft? Why? If it is not a check, how would you change it to make it a check?To: Arthur Adams January 1, 2018TEN DAYS AFTER DATE PAY TO THE
Robert Lea instructed Dick Guffey, an insurance agent, to secure property insurance coverage for his apartment buildings. Using the standard insurance industry form, Guffey prepared an application
Wheeler’s church was damaged by smoke and soot when two gas heating units in the church overheated, causing flames to leap out of the top of the units. The church’s insurer refused to pay for the
Property Owners Insurance (POI) was the insurer and Thomas Cope was the insured under a business liability insurance contract for Cope’s roofing business. The policy excluded coverage except in
Joseph Alberici entered into an agreement to purchase a theater property for a price of $210,000. The named purchaser on the purchase agreement was “Joseph Alberici or his nominee.” A down
When Jose Morales applied for a life insurance policy from Amex, he lied on the application form and denied having the AIDS virus. As a part of the application process, Amex required him to have a
Walmart established a trust to serve as the legal holder of life insurance policies insuring the lives of its employees and naming itself as beneficiary. Walmart’s policies insured the lives of all
As Christina Kastner was leaving a shopping mall, a man forced her to get into the passenger seat of her car. He took Kastner to a wooded park and sexually assaulted her in her car. In the park, she
Metropolitan Antiques sent unsolicited facsimile advertisements every three to four months. Approximately 360,000 facsimile advertisements were sent to Massachusetts numbers. Metropolitan was sued
Maggie Gaines, an elderly and infirm woman, maintained certain savings deposits and certificates in the Jefferson Federal Savings and Loan Association. During her lifetime, she had the name of her
When Peter Kaufman died, his son William reluctantly qualified to become the administrator of his father’s estate. William was a farmer with relatively little schooling or experience in financial
Fickes, a resident of Washington, died in December 1943, leaving a will dated November 19, 1940. The will provided for the creation of a trust upon his death. The will also provided that upon the
Mildred Rowell died on August 6, 1989. She was 65 years old and a widow, and she possessed a 10th-grade education. She was survived by seven children. On December 21, 1989, one of the children,
For 36 years, Ward Duchett lived in Washington, DC, with his sister Mary in her home. On numerous occasions, Mary had promised Ward she would leave him her real estate if he remained single and
Donna Marie Morgan resided in an apartment building owned by the 253 East Delaware Condominium Association and managed by Joseph Moss Realty. One evening at about 8:30 p.m., Morgan walked from her
A tenant rented an apartment from the landlord pursuant to a lease that required her to surrender the premises in “as good a state and condition as reasonable use and wear and tear will permit”
On August 2, Dan Maltbie and John Burke, students at Indiana University, entered into a one-year written lease with Breezewood Management Company for the rental of an apartment in an older house in
The state of Oregon enacted a comprehensive land use management program in 1973 that required all Oregon cities to adopt new comprehensive land use plans that were consistent with statewide planning
Hartford Penn-Cann Service, operated a gas station, restaurant, and truck wash directly across the highway from a gas station and truck stop operated under the name “Hartford 65.” It brought suit
The Schlemeyers purchased a frame apartment house and discovered shortly after the purchase that there was substantial termite infestation. They undertook some of the steps suggested by a specialist
William and Alice Carter purchased two lots in a subdivision called Payson Ranchos in Payson, Arizona. Each lot in the subdivision had a restriction in the deed that prohibited the use of house
On February 7, C. L. Hollaway, a real estate broker, obtained an open listing to sell Forshee’s residence. The property was listed for sale at $55,000, and Hollaway was to receive a 6 percent
Mains Farm is a platted subdivision. A declaration of restrictive covenants for the subdivision was recorded in 1962. Worthington purchased a residential lot in Mains Farm in 1987. At that time a
Sewell and Reilly owned adjoining lots. They entered into a written agreement whereby each agreed to allow the other to use the south 10 feet of his lot for alley purposes “for so long as the
William D. Robinson left a will in which he gave his real estate as follows: “I give all of my real estate to my wife, Lela S. Robinson, and at her death it goes to Frank M. Robinson, and at his
Yancy rented a building to Roberts, who operated a restaurant on the first floor and converted the second floor into apartments. The lease contained a provision permitting Roberts to remove from the
Marie Wallinga was staying at the Commodore Hotel. She had her son take her two diamond rings to the hotel clerk for safekeeping. The rings were shown to the clerk and then placed in a
Felice Jasphy brought three fur coats to Illana Osinsky’s establishment trading a Cedar Lane Furs in Teaneck, New Jersey, for storage and cleaning. The three coats included a ranch mink coat, a
R. B. Bewley and his family drove to Kansas City to attend a week long church convention. When they arrived at the hotel where they had reservations, they were unable to park their car and unload
Charles Miller and Nicolette Chiaia met each other through work in 2007 and began a relationship. In October 2008 Miller moved into Chiaia’s home where she lived with her minor children from a
Hunter Taylor lived with Hattie Smith. Taylor rented a safe-deposit box at the Crown Center Bank in the name of Hattie Smith and gave her both keys to the box. Smith signed a card that authorized and
In the fall of 1996, Jann Wenner hired Anderson Asphalt Paving to construct a driveway on his ranch. Larry Anderson, the owner of Anderson Asphalt Paving, and his employee, Gregory Corliss, were
Arnold Chait founded Ambassador Insurance and served as the company’s president and chief executive officer. Under state law, Ambassador was required to file an annual financial statement with the
Giant Stores Corporation hired Touche Ross & Co. to audit its financial statements. It was later discovered that Giant had manipulated its books by falsely recording assets that it did not own
Gulf Resources & Chemical Corporation retained Peat Marwick to audit its financial statements. The completed auditor’s report was included in Gulf’s annual report, which became publicly
Oregon Steel Mills (OSM) retained Coopers & Lybrand, LLP for many years to provide accounting and auditing services. Due to its negligence, Coopers wrongly advised OSM that a transaction should
See “Cafeteria Conversation.” Steve has authority to write checks on the account of his employer, a public company under the Securities Exchange Act of 1934. Because Steve is a compulsive gambler
Max Mitchell, a certified public accountant, went to First Florida Bank for the purpose of negotiating a loan on behalf of his client, C. M. Systems. After informing the bank vice president that he
The plaintiffs held approximately 30 percent of the stock of Xpedite Systems. When Premiere Technologies expressed an interest in acquiring Xpedite in a stock-for-stock merger and acquisition,
Peter Knappe asked his accountant to apply for an extension of the deadline to file the estate-tax return from the Internal Revenue Service (IRS). The accountant told Knappe that the deadline had
R. Foster Winans was coauthor of a Wall Street Journal investment advice column (“Heard on the Street”) that, because of its perceived quality and integrity, had an impact on the market prices of
Escott and other investors brought suit to recover the loss of their investment in debentures issued by BarChris Construction Corporation. BarChris became bankrupt when the owners of bowling alleys
Stuart Carson, Hong “Rose” Carson, Paul Cosgrove, and David Edmonds were charged with offering bribes to officials of foreign, state-owned companies for the purpose of obtaining or retaining
Washington Mutual (WAMU) is a publicly traded financial services company that serves individuals and small businesses, offering consumer banking, mortgage lending, commercial banking, and other
Patricia B. Rocklage deceived her husband into revealing highly negative and nonpublic information about his publicly traded company in order to tip her brother who owned company stock. Mrs. Rocklage
ETS Payphones sold pay phones to the public via independent distributors. The pay phones were offered packaged with a site lease, a 5-year leaseback and management agreement, and a buyback agreement.
Liu Meng-Lin, a citizen and resident of Taiwan, was employed as a compliance officer for the health care division of Siemens China, a Chinese corporation that is a wholly owned subsidiary of Siemens
Michael Coscia was charged with developing and implementing a high-frequency trading strategy that allowed him to enter and cancel large-volume orders in a matter of milliseconds. This strategy moved
MacAndrews & Forbes Group (MAF) and Technicolor agreed that MAF would acquire Technicolor in a two-step acquisition. The first step was an all-cash tender offer of $23 per share for all of
Community Hotel Corporation had paid no dividend on its preferred stock for 24 years. The arrearage totaled $645,000, or about $149 per share. Community Hotel wanted to be able to obtain additional
Avatex is a corporation that has outstanding both common and preferred stock. It created and incorporated Xetava Corporation as its wholly owned subsidiary and the following day announced its
Shareholders of Oracle Corporation alleged that four members of the corporation’s board of directors engaged in insider trading. Oracle formed a special litigation committee (SLC) to investigate
The Readers’ Digest Association (RDA) formulated a recapitalization plan that called for it to: (a) Purchase all the shares of its Class B voting stock at a premium ratio of 1.24 to 1, with
Paul Lohnes was issued a stock warrant to purchase 8,541 shares of Level 3 Communications’s common stock. Both the exercise price and the expiration date were formalized in the warrant document.
John R. Dyer owns approximately 6 percent of the stock in the Indium Corporation. All the remaining outstanding shares are owned by the corporation’s chief executive officer and chair of its board
Fannie Mae is a federally chartered, private corporation with shareholders, directors, and officers like other nongovernmental corporations. A governmental review of Fannie Mae’s books uncovered
McLean, a former vice president of International Harvester’s international division, was charged with violation of the Foreign Corrupt Practices Act (FCPA). Harvester pleaded guilty and admitted
During an inspection of Smokey’s Steakhouse, a restaurant and bar, police officers arrested two 20-year-old women for being in the bar while underage. Neither woman had been asked for proof of age
Loft, Inc. manufactured and sold candies, syrups, and beverages. It also operated 115 retail candy and soda fountain stores. Loft sold Coca-Cola at all of its stores, purchasing its 30,000-gallon
After finding that its earnings had been overstated by some $40 million, Gemstar announced plans to restructure its management and corporate governance. As part of the restructuring plans, Gemstar
Evertson and others formed a Wyoming corporation to engage in oil well servicing. Evertson served as the corporation’s vice president. The funds obtained for the corporation’s initial
Robert Meyerson was a member of the Telxon board of directors. Telxon develops and markets portable handheld computers for retailers and wholesalers in various industries. When the company began
Barnet Stepak was a shareholder in Southern Company, a corporation whose subsidiaries provide electricity to consumers in the southern United States. Stepak demanded that Southern’s board of
Southern Management Corporation (SMC) fired Mukhtak Taha after some personality conflicts with his supervisor, Debra Wylie-Forth. Soon thereafter, Michael McGovern, a maintenance supervisor, notified
John Hildreth was the sole shareholder, director, and officer of a New Jersey corporation known as HCE, Inc. (HCE-NJ). The corporation engaged in the construction business as a subcontractor on
F.B.I. Farms, Inc. was formed by Ivan and Thelma Burger, their children, Linda and Freddy, and the children’s spouses. Each of the three couples transferred a farm and related machinery to the
Jacobson, as promoter for A.L.W., Inc., contracted with Stern, an architect, to draw plans for a new hotel and casino to be built on the north shore of Lake Tahoe. It was to be known as King’s
Joseph Bitter and two brothers, Joseph Smith and Steve Smith, became good friends. As a result of their friendship, they decided to go into the tavern business together. The parties bought an
Monogram, Inc. wanted to buy a company that produced and sold smoke detectors. Accordingly, Monogram formed Monotronics, Inc. for the sole purpose of buying and operating the business. Monogram
Cook Construction, a general contractor, entered into a subcontract providing that Bryant Construction was to perform certain portions of work on a highway project for Cook. The two corporations
Leathem Stearn, claiming to act on behalf of a limited liability company, contracted with Gyrographic Communications. The agreement called for Gyrographic to provide advertising and marketing
George C. Richert appointed Colman Borowsky, a real estate broker with Crye-Leike Realtors, as his sole and exclusive real estate broker to aid him in the leasing and/or acquisition of industrial
Parham-Woodman Medical Associates, a general partnership, entered into a loan agreement with Citizens Bank to fund construction of a medical office for the partnership. Ante and King were the
Schymanski and Conventz entered into an oral partnership agreement for the purpose of building and operating a fishing lodge. The partnership was on a 50–50 basis, with each to contribute equal
See “The Partnership.” Art retires from Alphabet Builders, a partnership with Ben and Diedre. Zack agrees to replace Art in the partnership. Zack signs an agreement with Art in which Zack assumes
See “The Partnership.” Art is a partner of Alphabet Builders, a partnership in the construction business. The three partners of Alphabet Builders have agreed that the partnership may not borrow
See “The Partnership.” Art, Ben, and Diedre are partners of Alphabet Builders, a partnership in the construction business. They meet at a restaurant with a prospective new partner, Don, who says
Wilbur, Dee, and Randall Warnick formed Warnick Ranches general partnership to purchase and operate a ranch. The partnership agreement recited that the initial capital contributions of the partners
Wayne A. Long, Sergio Lopez, and Don Bannister entered into a partnership agreement in which they formed Wood Relo (the partnership). The three partners agreed to share equally one-third of the
Nancy J. Gleason and Douglas G. Shreffler, two partners in the law firm, began investigating the possibility of establishing a new, separate law firm. They decided to take preliminary steps to form
Garrison-Woods, LLC is a Virginia limited liability company. Cralle Z. Comer and Stephen H. Chapman are the principals of the company; each owns a 50 percent membership interest. Comer was the
Assume that Herb’s business in the preceding problem case has been operating for a year and has made a profit. Herb has expanded by purchasing other leather products to sell. All the profit has
Herb Jones started making tooled leather belts as a hobby. Later, he learned how to cast bronze belt buckles. He had little trouble selling them to friends. He was taking some art classes while
James Coduti was a minority shareholder in the Hudson Tool & Die Corporation (Hudson). Werner Hellwig, the majority shareholder in Hudson, had been feuding with Coduti for some time. Coduti
When friends reunite at a wedding, they reveal their plans for business ventures. Al and Amy, an unmarried couple, propose opening a Thai restaurant. Al is a dentist, and Amy is director of public
Greater Kansas City Roofing (GKC) had been operated as a sole proprietorship owned by Judy Clarke and managed by her husband, Charlie Clarke. Because of numerous violations of the labor laws, the
Raymond Brooks owned a 19 percent interest in H&B, a closely held corporation. Leroy Hill, Raymond’s brother-in-law, owned the remaining interest. In 1993, Leroy persuaded Raymond to sell his
Doherty wrote a software program called “Viper” for Szlendak. Subsequently, Katris and Hamburg joined Szlendak and Doherty in forming an LLC, Viper Execution Systems, to exploit the capabilities
Johnson Controls, Inc. manufactured batteries. Lead is a primary ingredient in that manufacturing process. A pregnant female employee’s exposure to lead involves a risk of harm to a fetus that she
In 1995, Lewis and other African Americans took a written test to be Chicago firefighters. Chicago then announced that it would randomly draw candidates for the positions from a list of
Hoban worked for Texas Tech as a First Responder Coordinator. She was responsible for training and quality assurance for those responding to nonmedical emergencies, establishing medical protocols for
Akers, a licensed practical nurse (LPN) who worked for Southwood, a long-term care and rehabilitation facility, was assigned to care for 140 patients by herself. She wrote a letter to the assistant
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