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Questions and Answers of Business Law

Lessack Auctioneers advertised an auction sale that was open to the public and was to be conducted with reserve. Gordon attended the auction and bid $100 for a work of art that was worth much more.
Orso, who had declared bankruptcy, received a structured tort settlement in a personal injury claim he had pending. The settlement would pay him an annuity each year for 30 years because the claim
Harold McClellan sold ice-making machinery to Bobbie Cantrell’s brother for $200,000 to be paid in installment payments. McClellan took a security interest in the ice machine but did not perfect it
Willis Music Co. advertised a television set at $22.50 in the Sunday newspaper. Ehrlich ordered a set, but the company refused to deliver it on the grounds that the price in the newspaper ad was a
Jane Leeves declared voluntary Chapter 7 bankruptcy. The trustee included the following property in her bankruptcy estate:● Jane’s wedding ring● Jane’s computer for her consulting business
When a movement was organized to build Charles City College, Hauser and others signed pledges to contribute to the college. At the time of signing, Hauser inquired what would happen if he should die
Sonia, a retailer, has the following assets: a factory worth $1 million; accounts receivable amounting to $750,000, which fall due in four to six months; and $20,000 cash in the bank. Sonia’s sole
Samson Industries ceased doing business and is in bankruptcy proceedings. Among the creditors are five employees seeking unpaid wages. Three of the employees are owed $3,500 each, and two are owed
A signed a contract agreeing to sell land he owned but reserved the right to take the hay from the land until the following October. He gave the contract form to B, a broker. C, a prospective buyer,
Steven and Teresa Hornsby are married and have three young children. On May 25, 1993, the Hornsbys filed a voluntary Chapter 7 petition. They had by that date accumulated more than $30,000 in debt,
A. H. Zehmer discussed selling a farm to Lucy. After a 40-minute discussion of the first draft of a contract, Zehmer and his wife, Ida, signed a second draft stating: “We hereby agree to sell to W.
On March 19, 1997, Jairath, as seller, and Bletnitsky, as buyer, entered into a real estate contract for sale of an apartment building located at 930 Ontario in Oak Park, Illinois, for a price of
Wheeler operated an automobile service station, which he leased from W. C. Cornitius, Inc. The lease ran for three years. Although the lease did not contain any provision for renewal, it was in fact
Place the following in order for a bankruptcy proceeding:a. Order of reliefb. Collection of bankrupt’s estatec. List of creditorsd. Petitione. Evaluation of claimsf. Voidable preferencesg. Discharge
Three general unsecured creditors are owed $45,000 as follows: A, $15,000; B, $5,000; and C, $25,000. After all other creditors were paid, the amount left for distribution to general unsecured
Buster Cogdill, a real estate developer, made an offer to the Bank of Benton to have the bank provide construction financing for the development of an outlet mall, with funds to be provided at prime
Cecil Usher owned Belize NY, Inc. (Belize), a small construction company doing business in New York City. Belize purchased a commercial general liability insurance policy from Mount Vernon Fire
Ackerley Media Group, Inc., claimed to have a three-season advertising Team Sponsorship Agreement (TSA) with Sharp Electronics Corporation to promote Sharp products at all Seattle Supersonics NBA
Martin Carls, a San Francisco teacher and counselor, applied for disability insurance from Standard Insurance Co. on April 4, 1996. On the application and supplement, Carls ticked “no” in
L. B. Foster invited Tie and Track Systems Inc. to submit price quotes on items to be used in a railroad expansion project. Tie and Track responded by e-mail on August 11, 2006, with prices for 9
On April 6, 1988, Luis Serrano purchased for $75,000 a 26´8´´–long Carrera speedboat named Hot Shot. First Federal Savings Bank provided $65,000 financing for this purchase. Serrano obtained a
From the United Insurance Co., Rebecca Foster obtained a policy insuring the life of Lucille McClurkin and naming herself as beneficiary. McClurkin did not live with Foster, and Foster did not inform
On August 15, 2003, Wilbert Heikkila signed an agreement with Kangas Realty to sell eight parcels of Heikkila’s property. On September 8, 2003, David McLaughlin met with a Kangas agent who drafted
Dr. George Allard and his brother-in-law, Tom Rowland, did not get along after family land that was once used solely by Rowland was partitioned among family members after the death of Rowland’s
Lester purchased a used automobile from MacKintosh Motors. He asked the seller if the car had ever been in a wreck. The MacKintosh salesperson had never seen the car before that morning and knew
Arthur Katz testified for the U.S. government in a stock manipulation case. He also pled guilty and testified against three of his law partners in an insurance fraud case. He received a six-month
Linda Filasky held policies issued by Preferred Risk Mutual Insurance Co. Following an injury in an automobile accident and storm damage to the roof of her home, Filasky sustained loss of income,
Helen, age 17, wanted to buy a Harley-Davidson “Sportster” motorcycle. She did not have the funds to pay cash but persuaded the dealer to sell the cycle to her on credit. The dealer did so partly
Baurer purchased a White Freightliner tractor and agreed that his son-in-law, Britton, could use it in the trucking business. In return, Britton agreed to haul Baurer’s hay and cattle, thus saving
Collins obtained from South Carolina Insurance Co. a liability policy covering a Piper Colt airplane he owned. The policy provided that it did not cover loss sustained while the plane was being
Paden signed an agreement dated May 28 to purchase the Murrays’ home. The Murrays accepted Paden’s offer the following day, and the sale closed on June 27. Paden and his family moved into the
Marshall Produce Co. had insured its milk- and egg-processing plant against fire. When smoke from a fire near its plant permeated the environment and was absorbed into the company’s egg powder
Amador Pena, who had three insurance policies on his life, wrote a will in which he specified that the proceeds from the insurance policies should go to his children instead of to Leticia Pena
High-Tech Collieries borrowed money from Holland. High-Tech later refused to be bound by the loan contract, claiming the contract was not binding because it had been obtained by duress. The evidence
Carman Tool & Abrasives, Inc., purchased two milling machines, FOB Taiwan, from the Dah Lih Machinery Co. Carman obtained ocean marine cargo insurance on the machines from St. Paul Fire and Marine
Thomas Bell, a minor, went to work in the Pittsburgh beauty parlor of Sam Pankas and agreed that when he left the employment, he would not work in or run a beauty parlor business within a 10-mile
Mona found a wallet on the floor of an elevator in the office building where she worked. She posted several notices in the building about finding the wallet, but no one appeared to claim it. She
Vallot was driving his farm tractor on the highway. It was struck from the rear by a truck, overturned, exploded, and burned. Vallot was killed, and a death claim was made against All American
When Jorge de Guerrero applied for a $200,000 life insurance policy with John Hancock Mutual Life Insurance Co., he stated on the insurance application that he had not seen a physician within the
In 1971, Harry Gordon turned over $40,000 to his son, Murray Gordon. Murray opened two $20,000 custodial bank accounts under the Uniform Gifts to Minors Act for his minor children, Eden and
New York’s banking law provides that a presumption arises that a joint tenancy has been created when a bank account is opened in the names of two persons “payable to either or the survivor.”
Martin Acampora purchased a shotgun at a garage sale years ago, never used the weapon, and did not know of any defects in it. His 31-year-old son Marty borrowed the shotgun to go duck hunting. As
Baena Brothers agreed to reupholster and reduce the size of the arms of Welge’s sofa and chair. The work was not done according to the contract, and the furniture when finished had no value to
Schroeder parked his car in a parking lot operated by Allright, Inc. On the parking stub given him was printed in large, heavy type that the lot closed at 6:00 P.M. Under this information, printed in
John Hayes and Lynn Magosian, auditors for a public accounting firm, went to lunch at the Bay View Restaurant in San Francisco. John left his raincoat with a coatroom attendant, but Lynn took her new
Rhodes parked his car in the self-service park-and-lock lot of Pioneer Parking Lot, Inc. The ticket that he received fromthe ticketmeter stated the following: “NOTICE. THIS CONTRACT LIMITS OUR
Newman underwent physical therapy at Physical Therapy Associates of Rome, Inc. (PTAR), in Rome, Georgia, for injuries sustained in an auto accident. At a therapy session on February 6, it was
Contract Packers rented a truck from Hertz Truck Leasing. The brakes of the truck did not function properly. This resulted in injuring Packers’ employee Cintrone while he was riding in the truck as
Charter Apparel, Inc., supplied fabric to Marco Apparel, Inc., in December to manufacture finished articles of clothing at its Walnut Grove, Mississippi, facilities. The fabric arrived just before
What social forces are involved in the rule of law governing the liability of a common carrier for loss of freight?
American Cyanamid shipped 7,000 vials of DPT—a vaccine for immunization of infants and children against diphtheria, pertussis, and tetanus—from its Pearl River, New York, facility to the U.S.
Compare the liens of carriers, warehouses, and hotels in terms of being specific.
Compare the limitations of the liability of a warehouse and of a hotelkeeper
Compare warehouse receipts and bills of lading as to negotiability.
Doyle Harms applied to his state’s Public Utilities Commission for a Class B permit authorizing performance as a common carrier. Doyle testified that it was not his intention to haul in a different
Motorola manufactured cell phones for Nextel of Mexico at its facility in Plantation, Florida. Nextel used Westwind International to arrange transportation of the cell phones. Westwind utilized
Richard Schewe and others placed personal property in a building occupied by Winnebago County Fair Association, Inc. Prior to placing their property in the building, they signed a “Storage Rental
Buffett sent a violin to Strotokowsky by International Parcel Service (IPS), a common carrier. Buffett declared the value of the parcel at $500 on the pick-up receipt given him by the IPS driver. The
Glen Smith contracted with Dave Watson, a common carrier, to transport 720 hives of live bees along with associated equipment from Idabel, Oklahoma, to Mandan, North Dakota. At 9:00 A.M. on May 24,
A guest in a motel opened the bedroom window at night and went to sleep. During the night, a prowler pried open the screen, entered the room, and stole property of the guest. The guest sued the
On March 30, Emery Air Freight Corp. picked up a shipment of furs from Hopper Furs, Inc. Hopper’s chief of security filled in certain items in the airbill. In the box entitled ZIP Code, he
When de Lema, a Brazilian resident, arrived in New York City, his luggage consisted of three suitcases, an attache´ case, and a cylindrical bag. The attache´ case and the cylindrical bag contained
Frosty Land Foods shipped a load of beef from its plant in Montgomery, Alabama, to Scott Meat Co. in Los Angeles via Refrigerated Transport Co. (RTC), a common carrier. Early Wednesday morning,
Tate hired Action-Mayflower Moving & Storage to ship his belongings. Action prepared a detailed inventory of Tate’s belongings, loaded them on its truck, and received the belongings at its
Triple H Construction Co. contracted with Hunter’s Run Stables, Inc., to erect a horse barn and riding arena on Hunter’s Run’s property in Big Flats, New York. Hunter’s Run got a guarantee in
R-P Packaging manufactured cellophane wrapping material that was used by Kern’s Bakery in packaging its product. Kern’s decided to change its system for packaging cookies from a tied bread bag to
Smythe wrote to Lasco Dealers inquiring about the price of a certain freezer. Lasco wrote her a letter, signed by its credit manager, stating that Smythe could purchase the freezer in question during
Mrs. Downing was fitted for dentures by a dentist, Dr. Cook. After she received her dentures, Mrs. Downing began experiencing mouth pain that she attributed to Dr. Cook’s manufacture of dentures
Meyers was under contract with Henderson to install overhead doors in a factory that Henderson was building. Meyers obtained the disassembled doors from the manufacturer. His contract with Henderson
Valley Trout Farms ordered fish food from Rangen. Both parties were merchants. The invoice that was sent with the order stated that a specified charge—a percentage common in the industry—would be
LTV Aerospace Corp. manufactured all-terrain vehicles for use in Southeast Asia. LTV made an oral contract with Bateman under which Bateman would supply the packing cases needed for the vehicles’
Ray Thomaier placed an order with Hoffman Chevrolet, Inc., for a specifically optioned 1978 Limited Edition Corvette Coupe. The order form described the automobile and the options Mr. Thomaier
Fastener Corp. sent a letter to Renzo Box Co. that was signed by Ronald Lee, Fastener’s sales manager, and read as follows: “We hereby offer you 200 type #14 Fastener bolts at $5 per bolt. This
Aldrich and Co. sold goods to Donovan on credit. The amount owed grew steadily, and finally Aldrich refused to sell any more to Donovan unless Donovan signed a promissory note for the amount due.
James Fitl purchased a 1952 Mickey Mantle Topps baseball card from baseball card dealer Mark Strek for $17,750 and placed it in a safe deposit box. Two years later, he had the card appraised, and he
Richard, a retailer of video equipment, telephoned Craft Appliances and ordered a $1,000 videotape recorder for his business. Craft accepted Richard’s order and sent him a copy of the purchase
REMC furnished electricity to Helvey’s home. The voltage furnished was in excess of 135 volts and caused extensive damage to his 110-volt household appliances. Helvey sued REMC for breach of
An agent of Thor Food Service Corp. was seeking to sell Makofske a combination refrigerator-freezer and food purchase plan. Makofske was married and had three children. After being informed of the
U.S. Surgical manufactures medical surgical instruments and markets the instruments to hospitals. The packaging for U.S. Surgical’s disposable medical instruments is labeled “for single use
Blubaugh was a district manager of Schlumberger Well Services. Turner was an executive employee of Schlumberger. Blubaugh was told that he would be fired unless he chose to resign. He was also told
Flora Hall went to Rent-A-Center in Milwaukee and signed an agreement to make monthly payments of $77.96 for 19 months in exchange for Rent-ACenter’s allowing her to have a Rent-A-Center washer and
Sippy was thinking of buying Christich’s house. He noticed watermarks on the ceiling, but the agent showing the house stated that the roof had been repaired and was in good condition. Sippy was not
Schock, the buyer, negotiated to purchase a mobile home that was owned by and located on the sellers’ property. On April 15, 1985, Schock appeared at the Ronderos’ (the sellers’) home and paid
Pileggi owed Young money. Young threatened to bring suit against Pileggi for the amount due. Pileggi feared the embarrassment of being sued and the possibility that he might be thrown into
John C. Clark, using the alias Thomas Pecora, rented a 1994 Lexus from Alamo Rent-A-Car on December 21, 1994. Clark did not return the car and, using falsified signatures, obtained a California
Felix DeWeldon is a well-known sculptor and art collector. He owned three paintings valued at $26,000 that he displayed in his home in Newport, Rhode Island. In 1991, he declared bankruptcy and
Office Supply Outlet, Inc., a single-store office equipment and supply retailer, ordered 100 model RVX-414 computers from Compuserve, Inc. A new staff member made a clerical error on the order form
Helen Thomas contracted to purchase a pool heater from Sunkissed Pools. As part of the $4,000 contract, Sunkissed agreed to install the pool heater, which was delivered to Thomas’s home and left in
C&J Publishing Co. told a computer salesman that it wanted a computer system that would operate its printing presses. C&J specified that it wanted only new equipment and no used equipment would be
A thief stole a car and sold it to a good-faith purchaser for value. This person resold the car to another buyer, who also purchased in good faith and for value. The original owner of the car sued
Using a bad check, B purchased a used automobile from a dealer. B then took the automobile to an auction at which the automobile was sold to a party who had no knowledge of its history. When B’s
The city of Salinas entered into a contract with Souza & McCue Construction Co. to construct a sewer. City officials knew unusual subsoil conditions (including extensive quicksand) existed that would
Vern Westby inherited a “ticket” from Anna Sjoblom, a survivor of the sinking of the Titanic, which had been pinned to the inside of her coat. He also inherited an album of postcards, some of
William E. Story agreed to pay his nephew, William E. Story II, a large sum of money (roughly equivalent to $50,000 in 2007 dollars) “if he would refrain from drinking liquor, using tobacco,
Dale Dyer, who was employed by National By-Products, Inc., was seriously injured at work as the result of a job-related accident. He agreed to give up his right to sue the employer for damages in
Charles Sanarwari retained Stan Gissel to prepare his income tax return for the year 2006. The parties agreed on a fee of $400. Charles had done a rough estimate based on last year’s return and
Medistar is a real estate development company specializing in the development of medical facilities. Dr. Schmidt, the team physician for the San Antonio Spurs basketball team, sought to develop
Fedun rented a building to Gomer, who did business under the name of Mike’s Cafe. Later, Gomer was about to sell the business to Brown and requested Fedun to release him from his liability under
Alexander Proudfoot Co. was in the business of devising efficiency systems for industry. It told Sanitary Linen Service Co. that it could provide an improved system for Sanitary Linen that would save
Sears, Roebuck and Co. promised to give Forrer permanent employment. Forrer sold his farm at a loss to take the job. Shortly after beginning work, he was discharged by Sears, which claimed that the

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