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Questions and Answers of Business Law

Robert Pinto, doing business as Pinto Associates, hired Richard MacDonald as an independent contractor in March 1992. The parties orally agreed on the terms of employment, including payment to
Sierra Bravo, Inc., and Shelby’s, Inc., entered into a written “Waste Disposal Agreement” under which Shelby’s allowed Sierra to deposit on Shelby’s land waste products, deleterious
Novell, Inc., owned the source code for DR DOS, a computer operating system that Microsoft Corp. targeted with allegedly anticompetitive practices in the early 1990s.Novell worried that if it filed a
Carlin Krieg owned a dairy farm in St. Joe, Indiana, that was appraised at $154,000 in December 1997. In August 1999, Krieg told Donald Hieber that he intended to sell the farm for $106,000. Hieber
Milton Blankenship agreed in writing to buy 15 acres of Ella Mae Henry’s junkyard property for $15,000 per acre with a ten-year option to buy the remaining 28.32 acres. Blankenship orally agreed to
William Williams is an attorney in Birmingham, Alabama. In 1997, Robert Shelborne asked Williams to represent him in a deal in London, England, from which Shelborne expected to receive $31 million.
Can Jackson delegate her duty to maintain the buildings to Dunn? Why or why not?Who can be held liable for Dunns failure to fix the ceiling, Jackson or Dunn?Was Faught an intended third party
Suppose that Graham had not benefited from the Center’s assumption of the duties associated with her choreography. Would the alleged assignment have been valid? Why or why not?
If Graham’s dances had existed as part of a database available only over the Internet, would the principles applied in this case, and the way in which they were applied, have been different? Why or
For what reasons did the state intermediate appellate court uphold the lower court’s summary judgment?
If the collapse of the building had been due to the negligence of a subcontractor, how might that party argue successfully against recovery?
If the agreement between MAO and MNCPO had involved a third party—an international pageant organization—would this have been a basis for concluding that Revels was a third party intended
How might Revels’s third party status with respect to the agreement between MAO and MNCPO have been affected if the contracting parties had conducted their business online? Explain.
Alexander has been accepted as a freshman at a college two hundred miles from his home for the fall semester. Alexander’s wealthy uncle, Michael, decides to give Alexander a car for Christmas. In
Five years ago, Hensley purchased a house. At that time, being unable to pay the full purchase price, she borrowed funds from Thrift Savings and Loan, which in turn took a mortgage at 6.5 interest on
Marsala, a college student, signs a one-year lease agreement that runs from September 1 to August 31. The lease agreement specifies that the lease cannot be assigned without the landlord’s consent.
Inez has a specific set of plans to build a sailboat. The plans are detailed, and any boatbuilder can construct the boat. Inez secures bids, and the low bid is made by the Whale of a Boat Corp. Inez
As the building services manager for Fulton County, Georgia, Steve Fullard oversaw custodial services. Fullard determined which services to contract for, received the bids, and recommended the
Acciai Speciali Terni USA, Inc. (AST), hired a carrier to ship steel sheets and coils from Italy to the United States on the M/V Berane. The ship’s receipt for the goods included a forum-selection
The National Collegiate Athletic Association (NCAA) regulates intercollegiate amateur athletics among the more than 1,200 colleges and universities with whom it contracts. Among other things, the
National Association for Stock Car Auto Racing, Inc. (NASCAR) sanctions stock car races. NASCAR and Sprint Nextel Corp. agreed that Sprint would become the Official Series Sponsor of the NASCAR
In 1984, James Grigg’s mother was killed in a car accident. Royal Insurance Co. of America agreed to pay Grigg a number of monthly payments and two lump-sum payments of $50,000 due May 1, 1995, and
Go to this text’s Web site at academic cengage.com/blaw/clarkson and select “Chapter 16.” Click on “Video Questions” and view the video titled Third Party Beneficiaries. Then answer the
Suppose that the basil does not pass the chemical-residue inspection. Which concept discussed in the chapter might allow Val’s to refuse to perform the contract in this situation?Val’s Foods
Under which legal theory or theories might Sun Farms claim that its obligation under the contract has been discharged by operation of law? Discuss fully.Val’s Foods signs a contract to buy 1,500
Suppose that Sun Farms contacts every basil grower in the country and buys the last remaining chemical-free basil anywhere. Nevertheless, Sun Farms is able to ship only 1,475 pounds to Val’s. Would
Now suppose that Sun Farms sells its operations to Happy Valley Farms. As a part of the sale, all three parties agree that Happy Valley will provide the basil as stated under the original contract.
The New York Court of Appeals found that Jacob & Youngs had substantially performed the contract. To what, if any, remedy was Kent entitled?
A requirement of substantial performance is good faith. Do you think that Jacob & Youngs substantially performed all of the terms of the contract in good faith? Why or why not?
Suppose that during his ten-week absence Shah was fulfilling prior professional obligations and that on his return he met Cover-It’s hours and timekeeping requirements. Further suppose that Shah
If Shah had worked for Cover-It from his home by telecommuting over the Internet and other employees were therefore not aware of his conduct, would he have been in breach of his contract? Explain.
Should Pantagis have offered to reschedule the reception? Would this have absolved Pantagis of the obligation to refund the Factos’ prepayment? Explain.
Does a power failure always constitute the kind of unexpected occurrence that relieves a party of the duty to perform a contract? In what circumstances might a power failure have no effect on a
The Caplans own a real estate lot, and they contract with Faithful Construction, Inc., to build a house on it for $360,000.The specifications list “all plumbing bowls and fixtures . . . to be Crane
Junior owes creditor Iba $1,000, which is due and payable on June 1. Junior has been in a car accident, has missed a great deal of work, and consequently will not have the funds on June 1. Junior’s
ABC Clothiers, Inc., has a contract with Taylor & Sons, a retailer, to deliver one thousand summer suits to Taylor’s place of business on or before May 1.On April 1, Taylor senior receives a letter
In the following situations, certain events take place after the contracts are formed. Discuss which of these contracts are discharged because the events render the contracts impossible to perform.
Heublein, Inc., makes wines and distilled spirits. Tarrant Distributors, Inc., agreed to distribute Heublein brands. When problems arose, the parties entered mediation. Under a settlement agreement,
In May 1996, O’Brien-Shiepe Funeral Home, Inc., in Hempstead, New York, hired Teramo & Co. to build an addition to O’Brien’s funeral home. The parties’ contract did not specify a date for the
Adolf and Ida Krueger contracted with Pisani Construction, Inc., to erect a metal building as an addition to an existing structure. The two structures were to share a common wall, and the frames and
Train operators and other railroad personnel use signaling systems to ensure safe train travel. Reading Blue Mountain & Northern Railroad Co. (RBMN) and Norfolk Southern Railway Co.entered into a
Kermit Johnson formed FB&I Building Products, Inc., in Watertown, South Dakota, to sell building materials. In December 1998, FB&I contracted with Superior Truss & Components in Minneota, Minnesota,
King County, Washington, hired Frank Coluccio Construction Co. (FCCC) to act as general contractor for a public works project involving the construction of a small utility tunnel under the Duwamish
One day, while Bruno is preparing for a difficult stunt, he gets into an argument with the director and refuses to perform any stunts at all. Can X Entertainment seek specific performance of the
Suppose that while performing a high-speed wheelie on a motorcycle, Bruno is injured by the intentionally reckless act of an X Entertainment employee. Will a court be likely to enforce the
What factors would a court consider to determine whether the $1 million liquidated damages provision constitutes valid damages or is a penalty?
Suppose that the contract had no liquidated damages provision (or the court refused to enforce it) and X Entertainment breached the contract. The breach caused the release of the film to be delayed
If a Web merchant loses business due to a computer system’s failure that can be attributed to malfunctioning software, can the merchant recover the lost profits from the software maker? Explain.
During the trial, Boeder tried to retract his repudiation of the lease to allow Hanson to continue farming for the rest of the lease term. Should the court have considered this an acceptable
Hanson initially asked the lower court to enforce the contract and requested damages only in the alternative—that is, only if specific performance was not available (pleading in the alternative is
Should a party who seeks specific performance of a contract be required to prove that he or she has performed, substantially performed, or offered to perform his or her contract obligations? Why or
Suppose that Stainbrook and Low had been citizens and residents of other countries. Would the location of the land that was the subject of their contract have been sufficient to support the Indiana
Cohen contracts to sell his house and lot to Windsor for $100,000.The terms of the contract call for Windsor to pay 10 percent of the purchase price as a deposit toward the purchase price, or a down
In which of the following situations would specific performance be an appropriate remedy? Discuss fully.(a) Thompson contracts to sell her house and lot to Cousteau. Then, on finding another buyer
Ken owns and operates a famous candy store and makes most of the candy sold in the store. Business is particularly heavy during the Christmas season. Ken contracts with Sweet, Inc., to purchase ten
William West, an engineer, worked for Bechtel Corp., an organization of about 150 engineering and construction companies, which is headquartered in San Francisco, California, and operates worldwide.
Every homeowner in the Putnam County, Indiana, subdivision of Stardust Hills must be a member of the Stardust Hills Owners Association, Inc., and must pay annual dues of $200 for the maintenance of
Tyna Ek met Russell Peterson in Seattle, Washington. Peterson persuaded Ek to buy a boat that he had once owned, the O’Hana Kai, which was in Juneau, Alaska. Ek paid $43,000 for the boat, and in
In May 1998, RDP Royal Palm Hotel, L.P., contracted with Clark Construction Group, Inc., to build the Royal Palms Crowne Plaza Resort in Miami Beach, Florida. The deadline for “substantial
On July 7, 2000, Frances Morelli agreed to sell to Judith Bucklin a house at 126 Lake dell Drive in Warwick, Rhode Island, for $77,000. Bucklin made a deposit on the house. The closing at which the
In 2004, Tamara Cohen, a real estate broker, began showing property in Manhattan to Steven Galistinos, who represented comedian Jerry Seinfeld and his wife, Jessica. According to Cohen, she told
Go to this text’s Web site at academic, cengage.com/blaw/clarkson and select “Chapter 18.” Click on “Video Questions” and view the video titled Midnight Run. Then answer the following
The standards for defining professional misconduct appear to focus on an act’s impact on third parties rather than its effect on the professional. Is this the appropriate focus? Why or why not?
Should an attorney’s misbehavior be considered a violation of the rules of professional conduct even if he or she is not convicted of a crime? Discuss.
What If the Facts Were Different? If Szekelyi had also been Reznor’s accountant, would the result have been different? Why or why not?
The Legal Environment Dimension How might Reznor, or anyone in a similar position, have avoided the negative impact of the result in this case?
If Shuebke’s review was conducted in good faith and conformed to generally accepted accounting principles, could Superior hold Shuebke Delgado liable for negligently failing to detect material
According to the rule adopted by the majority of courts to determine accountants’ liability to third parties, could Chase be liable to Superior? Superior Wholesale Corporation planned to
Generally, what requirements must be met before Superior can recover damages under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5? Could Superior meet these
Suppose that a court determined that Chase had aided Regal in willfully understating its tax liability. What is the maximum penalty that could be imposed on Chase? Superior Wholesale Corporation
Larkin, Inc., retains Howard Patterson to manage its books and prepare its financial statements. Patterson, a certified public accountant, lives in Indiana and practices there. After twenty years,
The accounting firm of Goldman, Walters, Johnson & Co. prepared financial statements for Lucy’s Fashions, Inc. After reviewing the various financial statements, Happy days State Bank agreed to
In early 2009, 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
In June 1993, Sparkomatic Corp. agreed to negotiate a sale of its Kenco Engineering division to Williams Controls, Inc. At the end of July, Sparkomatic asked its accountants, Parente, Randolph,
In 1995, JTD Health Systems, Inc., hired Tammy Heiby as accounting coordinator. Apparently overwhelmed by the duties of the position, Heiby failed to make payroll tax payments to the Internal Revenue
Solucorp Industries, Ltd., a corporation headquartered in New York, develops and markets products for use in environmental clean-ups. Solucorp’s financial statements for the six months ending
In October 1993, Marilyn Greenen, a licensed certified public accountant (CPA),began working at the Port of Vancouver, Washington (the Port), as an account manager. She was not directly engaged in
Napster,Inc., offered a service that allowed its users to browse digital music files on other users’ computers and download selections for free. Music industry principals filed a suit in a federal
Portland Shellfish Co. processes live shellfish in Maine. As one of the firm’s two owners, Frank Wetmore held 300 voting and 150 nonvoting shares of the stock. Donna Holden held the other 300
Go to this text’s Web site at academic. cengage.com/blaw/clarkson and select “Chapter 51.” Click on “Video Questions” and view the video titled Accountant’s Liability. Then answer the
Some people, particularly Europeans, argue that the United States has a “lawsuit culture.” In other words, whenever someone does not like the outcome of something, he or she sues. Do you think
The E-Commerce Dimension Did SFA and Bradford’s online offer of licenses for the commercial use of Monroe’s image have any effect on the court’s decision in this case? Why or why not?
The Legal Environment Dimension How might the court have ruled if Monroe had phrased her residuary clause to clearly state an intent to devise property she did not then own?
What If the Facts Were Different? Suppose that shortly before Pallister’s death, she had asked James to tear up her will, and he had done it. Would the result have been different? Explain.
The E-Commerce Dimension How might the availability of a secure online repository for a person’s will affect a challenge to the will?
What are the basic elements of any trust, and what makes up each of those elements in this case?
Lazio never reported the income or paid the sales taxes from the Sylvan Beach pizzeria and never obtained workers’ compensation insurance for its employees. How might these facts have affected the
What type of trust did Ramish create for the benefit of Covacek? Was it revocable or irrevocable? In June 2007, Bernard Ramish set up a $48,000 trust fund through West Plains Credit Union to
Would Ramish’s testament on the back of the wine list meet the requirements for a valid will? In June 2007, Bernard Ramish set up a $48,000 trust fund through West Plains Credit Union to
What would the order of inheritance have been if Ramish had died intestate? In June 2007, Bernard Ramish set up a $48,000 trust fund through West Plains Credit Union to provide tuition for his
Was Johansen granted a durable power of attorney or a health-care power of attorney for Ramish? Explain. Had Ramish created a living will? In June 2007, Bernard Ramish set up a $48,000 trust
Benjamin is a widower who has two married children, Edward and Patricia. Patricia has two children, Perry and Paul. Edward has no children. Benjamin dies, and his typewritten will leaves all of his
Gary Mendel drew up a will in which he left his favorite car, a 1966 red Ferrari, to his daughter, Roberta. A year prior to his death, Mendel sold the 1966 Ferrari and purchased a 1969 Ferrari.
While single, James made out a will naming his mother, Carol, as sole beneficiary. Later, James married Lisa.(a) If James died while married to Lisa without changing his will, would the estate go to
Merlin Winters had three sons. Merlin and his youngest son, Abraham, had a falling out in 1994 and stopped speaking to each other. Merlin made a formal will in 1996, leaving all of his property to
Rohan, an eighty-three-year-old invalid, employs a nurse, Sarah, to care for him. Prior to Sarah’s employment, Rohan executed a will leaving his entire estate to his only living relative—his
In January 1993, three and a half years after Lauren and Warren Woodward were married, they were informed that Warren had leukemia. At the time, the couple had no children, and the doctors told the
In 1944, Benjamin Feinberg bought a plot in Beth Israel Cemetery in Plattsburgh, New York. A mausoleum was built on the plot to contain six crypts. In 1954, Feinberg’s spouse died and was interred
Alma Zeigler, a resident of Georgia, died in June 2001. Zeigler’s will named as executor her grand-daughter, Stacey Hatchett. Hatchett, who was teaching and attending graduate school in Illinois,
James Lillard’s first wife had a child whom James adopted when he married that child’s mother. James fathered other children with her until they divorced in the early 1970s. In 1975, James

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