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1. This case involves a Chicago ordinance. What is an ordinance?
2. Can an ordinance prohibit ordnance?
3. What did the ordinance in this case require?
4. What was the penalty for failure to pay interest?

1. The realty company in good faith (perhaps) thought the $100 was a fee for bringing a pet into the building, not a security deposit. How can they be penalized for simply making a mistake?
2. Does this court think that a double penalty is wise?

There is another security deposit situation in which a landlord often has to pay double damages. What is it?

What should a student do who has properly moved out of an apartment but never received the security deposit or a letter?

Should a landlord generally be liable for harm caused by a tenant’s dog? By a tenant’s dog off the premises?

Tran argued that Shelburne indicates that the owner of premises can be liable to a third party for harm occurring off the premises. Should the Florida court modify its common law rule about dog liability based on Shelburne?

Are the McGuires entitled to a jury trial?

Is Anderson entitled to a trial on the issue of negligence?

Was the landlord liable for the murder?

1. Gartrell did not live at the Dickinson Arms and there is no evidence that the landlord knew of Gartrell personally. Why, then, is the landlord liable for Gartrell’s murder of Campbell?
2. Had there been other murders at Dickinson Arms?
3. They why should the landlord have foreseen this murder?

1. What could the landlord have done to satisfy its duty to prevent foreseeable crimes?
2. Is there any evidence that these steps would have made a difference to Campbell?

Match the following terms with their definitions:
___ A. Extraordinary care
___ B. Inter vivos gift
___ C. Ordinary care
___ D. Gift causa mortis
___ E. Slight care
1. Cannot be revoked
2. Required in a bailment for the sole benefit of the bailee
3. Can be revoked
4. Required in a bailment for the mutual benefit of bailor and bailee
5. Required in a bailment for the sole benefit of the bailor

True or False:
1. A gift is unenforceable unless both parties give consideration.
2. A gift causa mortis is automatically revoked if the donor dies shortly after making it.
3. A bailee always has the right to possess the property.
4. A finder of lost property generally may keep the property unless the true owner comes forward.
5. A common carrier is strictly liable for harm to the bailor’s goods.

1. CPA QUESTION: Which of the following requirements must be met to create a bailment?
I. Delivery of personal property to the intended bailee
II. Possession by the intended bailee
III. An absolute duty on the intended bailee to return or dispose of the property according to the bailor’s directions
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

2. Martin is a rich businessman in perfect health. Monday morning he tells his niece, Stephanie, “Tomorrow I’m going to give you my brand new Ferrari.” Stephanie is ecstatic. That afternoon, Martin is killed in a car accident. Does Stephanie get the car?
A. Stephanie gets the car because this is a valid inter vivos gift.
B. Stephanie gets the car because this is a valid gift causa mortis.
C. Stephanie gets the car because there is no reason to dispute that Martin made the promise.
D. Stephanie gets the car unless Martin left a wife or children.
E. Stephanie does not get the car.

3. Margie has dinner at Bill’s house. While helping with the dishes, she takes off her Rolex watch, and forgets to put it back on when she leaves for the night. Bill finds the watch in the morning and decides to keep it.
A. This is abandoned property and Bill is entitled to it.
B. This is lost property and Bill is entitled to it.
C. This is lost property and Margie is entitled to it.
D. This is mislaid property and Bill is entitled to it.
E. This is mislaid property and Margie is entitled to it.

4. Arriving at a restaurant, Max gives his car keys to the valet. When the valet returns the car three hours later, it has a large, new dent. The valet says he did not cause it. Max sues the valet service.
A. The burden is on the valet service to prove it did not cause the dent.
B. The burden is on Max to prove that the valet service caused the dent.
C. The valet service is strictly liable for harm to Max’s car.
D. The valet service has no liability to Max, regardless of how the dent was caused.
E. The valet service is only liable for gross negligence.

5. Car Moves hauls autos anywhere in the country. Valerie hires Car Moves to take her Porsche from Chicago to Los Angeles. The Porsche arrives badly damaged because the Car Moves truck was hit by a bus. The accident was caused by the bus driver’s negligence. If Valerie sues Car Moves for the cost of repairs
A. Valerie will win.
B. Valerie will win only if she can prove Car Moves was partly negligent.
C. Valerie will win only if she can prove that Car Moves agreed to strict liability.
D. Valerie will lose because Car Moves did not cause the accident.
E. Valerie will lose because this was a bailment for mutual benefit.

While in her second year at the Juilliard School of Music in New York City, Ann Rylands had a chance to borrow for one month a rare Guadagnini violin, made in 1768. She returned the violin to the owner in Philadelphia, but telephoned her father to ask if he would buy it for her. He borrowed money from his pension fund and paid the owner. Ann traveled to Philadelphia to pick up the violin. She had exclusive possession of the violin for the next 20 years, using it in her professional career. Unfortunately, she became an alcoholic, and during one period when she was in a treatment center, she entrusted the violin to her mother for safekeeping. At about that time, her father died. When Ann was released from the center, she requested return of the violin, but her mother refused. Who owns the violin?

Ronald Armstead worked for First American Bank as a courier. His duties included making deliveries between the bank’s branches in Washington, D.C. Armstead parked the bank’s station wagon near the entrance of one branch in violation of a sign saying:
“No Parking Rush Hour Zone.” In the rear luggage section of the station wagon were four locked bank dispatch bags, containing checks and other valuable documents. Armstead had received tickets for illegal parking at this spot on five occasions. Shortly after Armstead entered the bank, a tow truck arrived and its operator prepared to tow the station wagon. Transportation Management, Inc., operated the towing service on behalf of the District of Columbia. Armstead ran out to the vehicle and told the tow truck operator that he was prepared to drive the vehicle away immediately.
But the operator drove away with the station wagon in tow. One and one-half hours later, a bank employee paid for the car’s release, but one dispatch bag, containing documents worth $107,000, was missing.
First American sued Transportation Management and the District of Columbia. The defendants sought summary judgment, claiming they could not be liable. Were they correct?

Eileen Murphy often cared for her elderly neighbor, Thomas Kenney. He paid her $25 per day for her help and once gave her a bank certificate of deposit worth $25,000. She spent the money. Murphy alleged that shortly before his death, Kenney gave her a large block of shares in three corporations. He called his broker, intending to instruct him to transfer the shares to Murphy’s name, but the broker was ill and unavailable.
So Kenney told Murphy to write her name on the shares and keep them, which she did. Two weeks later Kenney died. When Murphy presented the shares to Kenney’s broker to transfer ownership to her, the broker refused because Kenney had never endorsed the shares as the law requires, that is, signed them over to Murphy. Was Murphy entitled to the $25,000? To the shares?

Who owns the ring?

Who owns the money?

1. What is abandoned property?
2. Who keeps abandoned property?
3. What is lost property?
4. Who is entitled to lost property?

1. What is mislaid property?
2. Who may keep mislaid property?
3. Which type of property was the cash that Benjamin found, and why?
4. What is the primary goal of most statutes and common law rules concerning found property?

On the bailment claim, argue for Shana and Meng-Lu.

On the bailment claim, argue for Billy.

1. Please rule on the bailment claim.
2. Please comment on the contract claim.

Was there a bailment?

1. Why did the parties care so much about whether there was a bailment?
2. Why did these facts fail to persuade the court?

What is Park ‘N Go’s best argument that there was no bailment?

1. Why did these facts fail to persuade the court?
2. But this wasn’t a garage, it was an open-air lot. Why should the statute apply?
3. The parking ticket given to a customer contained a liability disclaimer on the back. If the lot has stated that it is not liable, isn’t that the end of the case?

Was there a bailment?

1. What law governed the Mitchells’ lease of the safe deposit box from the Bank?
2. How did the box-rental agreement deal with the parties’ liability?

1. Why do the Mitchells argue that there was a bailment? Why?
2. Viewed as a bailment relationship, which party is liable for the loss?

The box-rental agreement said the Bank had no possession, custody, or control over the contents of the box. Since bailment requires that the bailee exercise control over the property, how can there be a bailment?

Did the parties create a bailment?

1. Why are the parties arguing about whether there was a bailment?
2. What issue was the key factor in deciding whether the parties had created a bailment?
3. The court ruled that the garage did have control. Why?
4. Describe a garage in which there is no bailment.

1. Please analyze the case. What kind of a relationship do Brink’s and Happy Hocker have?
2. Why is that issue so important?
3. Brink’s argued that the parties had a bailment for their mutual benefit. Why did it argue this?

What is the key analytical issue in deciding this bailment case?

1. Was Brink’s right? What kind of a bailment did the parties have?
2. Why is this bailment for the sole benefit of the bailor?
3. What level of care was Happy Hocker obligated to use?
4. Who wins?

Match the following terms with their definitions:
___ A. Executor
___ B. Intestate
___ C. Testator
___ D. Administrator
___ E. Testatrix
1. Woman who has signed a valid will
2. Man who has signed a valid will
3. Personal representative chosen by the decedent to carry out the terms of a will
4. To die without a will
5. Personal representative appointed by the probate court to oversee the probate process

True or False:
1. Under the Uniform Probate Code, one spouse is not required to leave any money to the other spouse.
2. A holographic will does not need to be witnessed.
3. A nuncupative will does not need to be witnessed.
4. A principal may not revoke a durable power of attorney.
5. A grantor may not be the trustee of a trust.

1. What is a fiduciary duty?
2. What should Despatch have done to protect itself from liability?
3. Was this transaction entirely fair?

1. CPA QUESTION: A personal representative of an estate would breach her fiduciary duties if she:
A. Combined personal funds with funds of the estate so that both could purchase Treasury bills
B. Represented the estate in a lawsuit brought against it by a disgruntled relative of the decedent
C. Distributed property in satisfaction of the decedent’s debts
D. Engaged a non-CPA to prepare the records for the estate’s final accounting

2. Hallie is telling her cousin Anne about the will she has just executed. “Because of my broken arm, I couldn’t sign my name, so I just told Bertrand, the lawyer, to sign it for me. Bertrand also witnessed the will.” Anne said, “You made a big mistake:
I. You should have at least made some sort of mark on the paper yourself.”
II. The lawyer is not permitted to witness the will.”
III. You did not have enough witnesses.”
Which of Anne’s statements is true?
A. I, II, and III
B. Neither I, II, nor III
C. Just I
D. Just II
E. Just III

3. Owen does not want to leave any money to his son, Kevin. What must he do to achieve this goal?
I. Nothing. If he dies without a will, Kevin will inherit nothing.
II. Make a will that leaves nothing to Kevin.
III. Leave Kevin $1 in his will.
A. I, II, or III
B. II or III
C. Just I
D. Just II
E. Just III

4. Lauren is a resident of Kansas who has signed a living will directing her husband to make medical decisions for her.
Now that she is dying of cancer and suffering terribly, she is begging her husband and her doctors to kill her. Which of the following statements is true?
I. If she goes into a coma, her husband has the right to direct her doctors to withhold treatment.
II. Her doctor has the right to give her an overdose of pills that will kill her.
III. Her husband has the right to give her an overdose of pills that will kill her.
A. I, II, and III
B. Neither I, II, nor III
C. Just I
D. Just II
E. Just III

5. Blake tells his client that there are five good reasons to set up a trust. Which of the following is not a good reason?
A. To pay his grandchildren’s college tuition if they go to the same college he attended
B. To save money, since a trust is cheaper than a will
C. To make sure the money is properly invested
D. To avoid probate
E. To safeguard his privacy

If managers act in the best interest of the shareholders, are they protected by the business judgment rule?

Is that what happened with Despatch?

William Cook was a very successful undertaker. When he died, his will left all of his property to his brother Eugene. There were two other pieces of paper in the safe with the will. One said that that his stamp collection should go to his housekeeper, Bertha. This document was signed by two witnesses—the gardener and the cook. There was also a piece of paper stating that he would like all of his assets to go to his sister’s daughter, Evangeline. Who will get what?

1. Did Herrig breach his duty of loyalty to Cookies by engaging in self-dealing?
2. Did Herrig engage in self-dealing?

Kevin Fitzgerald represented the down-and-out Mission Hill and Roxbury Districts in the Massachusetts House of Representatives. A priest alerted him that Mary Guzelian, a street person who roamed his district, had trash bags in her ghetto apartment stuffed with cash, bonds, and bank books. Fitzgerald visited the apartment with his top aide, Patricia McDermott.
Two weeks later, Guzelian signed a will, drafted by one of Fitzgerald’s acquaintances, that left Guzelian’s $400,000 estate to Fitzgerald and McDermott.
Fitzgerald claimed not to know about the will until Guzelian’s death four years later. Guzelian, 64, suffered from chronic paranoid schizophrenia and severe health problems. Would Guzelian’s sister have a claim on Guzelian’s estate?

When Bill died, he left all of his property in a trust to take care of his wife, Dorris, for the rest of her life. On her death, the money would go to their son, Rob. The Bank of Tulsa was the trustee of this trust. Fifty years later, Rob needed money, so he began writing checks out of Dorris’s checking account. She knew about the checks but could never say no to him. At the rate at which Rob was spending her money, the trust funds would all be gone within a couple of years. What was the bank’s responsibility? Was it obligated to let Dorris have as much money as she wanted?

After nearly 40 years of marriage, Frank Honigman executed a new will that left his wife only the minimum required by law. The balance went to his brothers and sisters (the couple had no children). For some time before his death, Honigman had repeatedly told both friends and strangers, using obscene and abusive language, that his wife was unfaithful. Honigman was normal and rational in other respects but, by all evidence, his suspicions were untrue. They were based on such evidence as the fact that, when he left the house, his wife would ask him when he planned to return. Also, whenever the telephone rang, Mrs. Honigman answered it. For the last two years of his life he positively forbade her to answer the telephone. Is Mr. Honigman’s will valid?

When Gregg died, his will left his money equally to his two children, Max and Alison. Max had died a few years earlier, leaving behind a widow and four children. Who will get Gregg’s money?

1. Is Herrig protected by the business judgment rule?
2. So, is Herrig liable to Cookies?
3. Was this transaction fair?

Virtually everyone needs a will. Why?

Is Iola’s second will valid?

Did the directors of RSL Plc violate their duty of care to the corporation?

How did Iola executive her will?

What procedure did Arkansas law require?

The board members of RSL Plc and RSL Ltd overlapped. RSL Plc claims that because of this overlap, both boards were aware of what was going on with RSL Plc. Shouldn’t that make a difference when determining whether the board of RSL Plc was making an informed decision?

1. Why wasn’t the will valid?
2. Is there any doubt that Iola intended to make this will and that it represented her wishes?
3. Does this law make any sense then?

Are Evelyn’s children entitled to a share of Josiah’s estate?

Does the fact that the board did not formally meet to discuss the loan or the draw down mean that the members acted improperly?

1. What is a pretermitted heir?
2. Is a child entitled to inherit something?
3. How can courts tell if a child is left out by accident?

1. What must a parent do then if he doesn’t want to leave money to a child?
2. Why does the law presume that a child who is left nothing has been forgotten?
3. What happens to the pretermitted heir?

Did the directors of Trans Union violate their duty of care to the corporation by making an uninformed decision? Did the shareholders consent to this decision?

1. How much is that?
2. In this case, did Josiah forget Evelyn?
3. Why did the court ignore his clear intent?
4. What should Josiah have done?

Should Young and her mother be able to recover damages from the hospital that treated Young against the instructions of her mother? On what legal theories might Young and her mother base their claims?

1. Does a shareholder have the right to obtain corporate records?
2. What does “proper purpose” mean?
3. Would any of the records that Bergmann requested aid him in managing and protecting his investment?

What arguments might the hospital make?

Shareholders own the company. Why shouldn’t they be entitled to any records they want?

If you were on the jury, what would you decide?

Does a state have the right to punish those who assist the terminally ill to commit suicide?

1. Could you argue that the other items, such as information regarding sexual harassment and discrimination complaints against Lee, might help a shareholder determine if the company was well run?
2. Could you argue that some of this information might harm the company?

1. What is the difference between this case and the Cruzan case?
2. Why does the state care if someone wants to commit suicide?
3. Why did the patients in this case want a physician to help them commit suicide?

Should shareholders be allowed to pass binding resolutions?

Did the Disney directors have the right to pay $130 million to an employee who had worked at the company unsuccessfully and for only 14 months?

If the doctor and patient are willing, then why shouldn’t the patient be allowed to seek help in killing herself?

What was Michael Ovitz’s career path at Disney? Why?

Why should patients be allowed to ask for help from doctors to kill themselves?

What did the courts decide?

When they approved his severance package, Disney’s board did not know how much his severance package would cost. How could this be considered an informed decision under the business judgment rule?

Why did these two men—both rich and famous—treat their assets so differently at death?

Wasn’t the payment ridiculously excessive?

Match the following terms with their definitions:
___ A. Insured
___ B. Insurer
___ C. Owner
___ D. Beneficiary
___ E. Insurable interest
1. The person who issues the insurance policy
2. The person who receives the proceeds from the insurance policy
3. The person who takes out the policy would be harmed by the danger that she has insured against
4. The person who enters into the policy and pays the premiums
5. The person whose loss is the subject of an insurance policy

Should something be done about executive compensation? If so, what?

True or False:
1. If the insured makes any false statement in the application process, the insurance policy is voidable.
2. Once an insurance company issues a binder, the policy is irrevocable.
3. Although whole life insurance is more expensive than term, it is the best choice because it forces the customer to save money.
4. You are more likely to die before 65 than to become disabled before 65.
5. An annuity is simply a type of life insurance.

Match the following terms with their definitions:
___ A. Securities Act of 1933
___ B. Per se
___ C. Misappropriation
___ D. Rule of reason
___ E. Securities Exchange Act of 1934
1. Only a violation if it has an anticompetitive impact
2. Regulates companies once they have gone public
3. Illegal insider trading
4. Regulates the issuance of securities
5. Automatic violation of the antitrust laws, punishable by imprisonment

1. Lucas has bought the following insurance this week:
I. A life insurance policy on his brother
II. A life insurance policy on the partner in his accounting practice
III. A fire insurance policy on the fitness club he belongs to so that if it burns down, he will receive a large enough payment to enable him to join a different club
In which of these policies does he have an insurable interest?
A. I, II, and III
B. Neither I, II, nor III
C. I and II
D. I and III
E. II and III

2. An insurance company does not violate its covenant of good faith and fair dealing if it:
A. Charges elderly customers higher premiums than it charges younger customers
B. Tells potential customers that their premiums will decline when that is not true
C. Tells potential customers that their returns on a whole life policy are certain to be higher than an equivalent amount invested in the stock market
D. Refuses to pay a valid claim until after four years of litigation
E. Refuses to accept a settlement offer on behalf of an insured that was reasonable, but not in the company’s best interest

3. If you are a smart consumer, you will:
I. Insure against as many different kinds of risks as you can so that no matter what happens, you will be protected
II. Select as low a deductible as possible so that no matter what happens, you will not have to pay large sums out of pocket
III. Buy flight insurance when you take long airplane flights so that your family will be protected if your plane crashes
A. I, II, and III
B. Neither I, II, nor III
C. I and II
D. Just I
E. Just II

4. Hamish owned an office building with a fair market value of $250,000. He insured it for $300,000. When it burned down, he was entitled to:
A. Nothing
B. $250,000 and a return of the excess premiums he paid on the $300,000 policy
C. $250,000
D. $300,000

5. Which of the following policies are you likely to need in your lifetime?
I. Service plan on an appliance
II. Whole life insurance
III. Disability insurance
IV. Health insurance
A. All of the above
B. None of the above
C. II, III, and IV
D. III and IV

Linda Richmond and Eddie Durham had two children before they were divorced. Under the terms of their divorce decree, Durham obtained title to their house. When he died suddenly of a heart attack, the children inherited the house. Richmond moved into the house with the children and began paying the mortgage that was in Durham’s name. She also took out fire insurance. Ten months later, fire totally destroyed the house. The insurance company refused to pay a benefit under the policy because Richmond did not have an insurable interest in the property. Do you agree?

True or False:
1. Before permitting a company to issue new securities, the SEC investigates to ensure that the company has a promising future.
2. Small off erings of securities do not need to be registered with the SEC.
3. Price-fi xing is legal as long as it does not have an anticompetitive impact.
4. Only the federal government regulates securities off erings; the states do not.
5. It is legal for a company to sell its product at a price below cost as long as it does not intend to drive competitors out of business.

Armeen ran a stop sign and hit the Smiths’ car, killing their child. He had $1.5 million in insurance. The Smiths offered to settle the case for that amount, but Liberty State, Armeen’s insurance company, refused and proposed $300,000 instead. At trial, the jury awarded the Smith’s $1.9 million, which meant that Armeen was liable for $400,000 rather than the zero dollars he would have had to pay if Liberty had accepted the Smiths’ offer. What is Liberty’s liability? Under what theory?

Dannie Harvey sued her employer, O. R. Whitaker, for sexual harassment, discrimination, and defamation. Whitaker counterclaimed for libel and slander, requesting $1 million in punitive damages. Both Whitaker and Harvey were insured by Allstate, under identical homeowner’s policies. This policy explicitly promised to defend Harvey against the exact claim Whitaker had made against her. Harvey’s Allstate agent, however, told her that she was not covered. Because the agent kept all copies of Harvey’s insurance policies in his office, she took him at his word. She had no choice but to defend against the claim on her own. Whitaker mounted an exceedingly hostile litigation attack, taking 80 depositions. After a year, Allstate agreed to defend Harvey. However, instead of hiring the lawyer who had been representing her, it chose another lawyer who had no expertise in this type of case and was a close friend of Whitaker’s attorney. Harvey’s new lawyer refused to meet her or to attend any depositions. Harvey and Whitaker finally settled. Whitaker had spent $1 million in legal fees, Harvey $169,000, and Allstate $2,513. Does
Harvey have a claim against Allstate?

Multiple-Choice Questions
1. Under Regulation D, an issuer:
A. May not sell to a thousand accredited investors
B. May not sell to 27 unaccredited investors
C. Must make disclosure to accredited investors
D. Must make disclosure to unaccredited investors
E. May advertise the stock publicly

2. Which of the following statements is not true about a public offering?
A. The issuer files a registration statement with the SEC.
B. The issuer files a prospectus with the SEC.
C. Company officers may make public statements about the offering before the stock is sold.
D. Company officers may make public statements about the offering after the stock is sold.
E. The issuer may solicit offers for the stock before the effective date.

3. To have an illegal monopoly, a company must:
I. Control the market
II. Maintain its control improperly
III. Have a market share greater than 50 percent
A. I, II, and III
B. I and II
C. II and III
D. I and III
E. Neither I, II, nor III

4. Lloyd sold car floor mats to Mercedes dealerships. Then Mercedes began to include floor mats as standard equipment. Mercedes has a 10 percent share of the luxury car market.
A. Mercedes has created an illegal tying arrangement because floor mats and cars are separate products.
B. Mercedes has not created an illegal tying arrangement because floor mats and cars are not separate products.
C. Mercedes has created an illegal tying arrangement because its market share is 10 percent.
D. Mercedes has not created an illegal tying arrangement because it is not tying the two products together.
E. Mercedes has created an illegal tying arrangement because it controls the market in floor mats.

5. Mike is director of sales for his company. He negotiates prices with Paige and Lauren, who work for two of his biggest customers. Paige tells him that she can buy the same product cheaper elsewhere. He cuts the price for her, but not for his other customers. At the same time, he develops a crush on Lauren, so offers to sell her the product at a lower price. In subsequent months, these two customers come to dominate the market. Which statement is correct:
A. Mike can charge whatever price he wants to any customer.
B. Mike must charge all his customers the same price.
C. The price cut to Paige, but not Lauren, is legal.
D. The price cut to Lauren, but not Paige, is legal.
E. Mike is not required to charge all his customers the same price, but neither of these price cuts is legal.

Clyde Anderson received a letter from his automobile insurance company notifying him that it would not renew his policy that was set to expire on February 28. Anderson did not obtain another policy, and, on March 1, at 2:30 a.m., he struck another vehicle, killing two men. Later that day, Anderson applied for insurance coverage. As part of this application, he indicated that he had not been involved in any accident in the last three years. The new policy was effective as of 12:01 a.m. on March 1. Will the estates of the two dead men be able to recover under this policy?

Christopher Stenger bought 12 Impressionist paintings from R. H. Love Galleries for $1.5 million. Love told Stenger that art investment would produce a safe profit. The two men agreed that Stenger could exchange any painting within five years for any one or two other paintings with the same or greater value. When Stenger’s paintings did not increase in value, he sued Love, arguing that the right to trade paintings made them securities. Is Stenger correct?

Jason lived in an apartment with Miri, to whom he was not married. When he applied for homeowner’s insurance, the form asked their marital status. He checked the box that said “married.” Later, the apartment was robbed and Jason filed a claim with his insurance company. When the company discovered that Jason and Miri were not married, it refused to pay the claim on the grounds that he had made a material misrepresentation. Jason argued that the misrepresentation was not material because the insurance company would have issued the policy no matter how he answered that question. Is Jason’s policy valid?

Did Tim’s have an insurable interest in the building?

You’re in line at the movie theater when you overhear a stranger say: “The FDA has just approved Hernstrom’s new painkiller. When the announcement is made on Monday, Hernstrom stock will take off.” What if you buy stock of the company before the announcement on Monday?

Did Hopkins materially misrepresent his health when applying for insurance? Does Golden Rule have the right to rescind his insurance policies?

Fifty bakeries in New York agreed to raise the retail price of bread from 75¢ to 85¢. All the association’s members printed the new price on their bread sleeves. Are the bakeries in violation of the antitrust laws?

1. Why did Hopkins apply for health and life insurance?
2. Did he accurately answer all the questions on the insurance application?
3. Does it matter if Hopkins knew he had AIDS?
4. In the end, did Hopkins accomplish anything by lying on his application?
5. What is the moral of the story?

Did he know he was HIV positive or had AIDS when he applied for the insurance?

Suppose that Disney insists that retailers cannot sell DVDs of the High School Musical series for less than $14.95. The company threatens to cut off any retailers who discount that price. But video stores would like to use these movies as a loss leader—selling them at a very low price to lure customers. Is it legal for Disney to cut off retailers who discount prices?

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