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dynamic business law

Business Law And The Legal Environment 9th Edition Jeffrey F Beatty, Susan S Samuelson - Solutions

. Krug International, an Ohio corporation, had a contract with Iraqi Airways to build aeromedical equipment for training pilots. Krug then contracted for Power Engineering, an Iowa corporation, to build the specialized gearbox to be used in the training equipment for $150,000. Power did not know
. Evans built a house for Sandra Dyer, but the house had some problems. The garage ceiling was too low. Load-bearing beams in the “great room” cracked and appeared to be steadily weakening. The patio did not drain properly. Pipes froze.Evans wanted the money promised for the job, but Dyer
. YOU BE THE JUDGE WRITING PROBLEM Kuhn Farm Machinery, a European company, signed an agreement with Scottsdale Plaza Resort, of Arizona, to use the resort for its North American dealers’ convention during March 1991. Kuhn agreed to rent 190 guest rooms and spend several thousand dollars on food
, Loehmann’s clothing stores, a nationwide chain with headquarters in New York, was the anchor tenant in the Lincoln View Plaza Shopping Center in Phoenix, Arizona, with a 20-year lease from the landlord, Foundation Development, beginning in 1978. Loehmann’s was obligated to pay rent the first
. Brunswick owned a tennis club on property that it leased from Route 18. Upon expiration of its 25-year lease, Brunswick had the option of either buying the property or purchasing a 99-year lease, both on very favorable terms. To exercise its option, Brunswick had to notify Route 18 no later than
. Mustang Pipeline Co. hired Driver Pipeline Co. to lay 100 miles of pipeline in 98 days. On day 58, Driver had only completed 15 miles of pipe and gave up. Realizing that Driver was unlikely to make the deadline, Mustang terminated the contract.Under what principle did Mustang terminate? Was the
. ETHICS Commercial Union Insurance Co. (CU) insured Redux, Ltd. The contract made CU liable for fire damage but stated that the insurer would not pay for harm caused by criminal acts of any Redux employees. Fire destroyed Redux’s property. CU claimed that the “criminal acts” clause was a
. Lenny makes K2, a synthetic form of marijuana, in his basement. He signs an agreement with the Super Smoke Shop to deliver 1,000 cans of K2 for $10,000.After the contract is signed, but before delivery, Super Smoke Shop’s state legislature makes the sale of K2 illegal. Will Lenny’s contract
. Big Co., a construction company, builds a grocery store. The contract calls for a final price of $5 million. Big Co. incurred $4.5 million in costs and stands to make a profit of $500,000. Upon final inspection, the grocery store owner is upset. His blueprints called for 24 skylights, but the
. Which of the following is true regarding conditional contracts?I. Ifa contract contains a condition precedent, the plaintiff has the burden of proving that the condition occurred.Il. Ifa condition subsequent exists, the defendant has the burden of showing that the condition occurred.(ay(b) I(c)
. Most contracts are discharged by:(a) agreement of the parties. ~(b) full performance.(c) failure of conditions.(d) commercial impracticability.(e) a material breach.
. CPA QUESTION Nagel and Fields entered into a contract in which Nagel was obligated to deliver certain goods by September 10. On September 3, Nagel told Fields that he had no intention of delivering the goods. Prior to September 10, Fields may ‘successfully sue Nagel under the doctrine of:(a)
. In our society, a person can buy and sell almost anything. But as this chapter describes, you cannot sell personal injury claims. Should you be able to? Imagine that you are injured in a car wreck. You are told that you might win $100,000 in a lawsuit eventually, but that you might not receive
. In response to the subprime mortgage crisis, the federal government created the Home Affordable Modification Program (HAMP) to help struggling homeowners refinance their mortgage debt, thereby reducing the foreclosure rate. HAMP facilitates contracts between the U.S. Treasury and mortgage
. Ifa person promises to give you a gift, there is usually no consideration. The person can change his mind and decide not to give you the present, and there is nothing you can do about it. But if a person makes a contract with someone else and intends that you will receive a gift under the
. Nationwide Discount Furniture hired Rampart Security to install an alarm in its warehouse. A fire would set off an alarm in Rampart’s office, and the security company was then supposed to notify Nationwide immediately. A fire did break out, but Rampart allegedly failed to notify Nationwide,
. Acentury and a half ago, an English judge stated: “All painters do not paint portraits like Sir Joshua Reynolds, nor landscapes like Claude Lorraine, nor do all writers write dramas like Shakespeare or fiction like Dickens. Rare genius and extraordinary skill are not transferable.” What legal
. Raymond and Connie Loftus hired American Realty Co. to manage and sell their vacant home. ARC secured a buyer. Prior to closing, ARC hired Fitzpatrick to light the home’s gas water heater. During the lighting, Fitzpatrick burned the house down. The Loftuses argued that ARC improperly delegated
. The Rosenbergs sold their Dairy Queen franchise to Mary Pratt. The contract required Pratt to pay most of the purchase price over a 15-year period. Two years later, Pratt assigned her rights and delegated her duties under the sales contract to Son, Inc. The Rosenbergs agreed to the new
. YOU BE THE JUDGE WRITING PROBLEM David Ricupero suspected his wife Polly of having an affair, so he taped her phone conversations and, based on what he heard, sued for divorce. David’s lawyer, William Wuliger, had the recorded" conversations transcribed for use at trial. The parties settled the
. Woodson Walker and Associates leased computer equipment from Park Ryan Leasing. The lease said nothing about assignment. Park Ryan then assigned the lease to CB as security for a loan. Park Ryan defaulted on its loan, and Walker failed to make several payments on the lease. TCB sued Walker for
. Intercontinental Metals Corp. (IMC) contracted with the accounting firm of Cherry, Bekaert & Holland to perform an audit. Cherry issued its opinion about IMG, giving all copies of its report directly to the company. IMC later permitted Dun &Bradstreet to examine the statements, and Raritan River
. Will misses three straight payments on his SUV, and his bank repossesses it. Which of the following is true regarding the right to repossess?I. The right to repossess is a security interest.II. Security interests are governed by Article 2 of the Uniform Commercial Code.(aya(Dye(c) Both I and II
. Which of the following is true about a novation?I. A novation completely releases an obligor from any further liability.Il. To be effective, a novation requires the agreement of both the obligor and obligee.(a) el(b) I(c) Both J and II are true(d) Neither I nor II is true
. Amanda agrees to pay Jennifer $1,000 for a pair of tickets to see the Broadway show Hamilton. “Hamilton is my boyfriend Octavio’s favorite play, and the tickets will be a great birthday present for him,” she tells Jennifer. Amanda pays up and tells a delighted Octavio about the tickets, but
. CPA QUESTION One of the criteria for a valid assignment of a sales contract to a third party is that the assignment must:(a) not materially increase the other party’s risk or duty.(b) not be revocable by the assignor.(c) be supported by adequate consideration from the assignee.(d) be in writing
. CPA QUESTION Yost contracted with Egan for Yost to buy certain real property.If the contract is otherwise silent, Yost’s rights under the contract are:(a) assignable only with Egan’s consent.(b) nonassignable because they are personal to Yost.(c) nonassignable as a matter of law.(d) generally
. Compare the common law Statute of Frauds to the UCC version. What are the specific differences? Which is more reasonable? Why?
. Now that you know about Browning v. Poirier and the Statute of Frauds, will you change the way you enter into lottery pools?
. Adisc jockey named Z-Trip made a remix of a Beastie Boys song with the hiphop group’s permission. Monster Energy (ME), an energy drink company, wanted to use the remix as part of a video promotion. ME sent an email asking Z-Trip to approve the video. In an email, Z-Trip responded “Dope!”
. Mast Industries and Bazak International were two textile firms. Mast verbally offered to sell certain textiles to Bazak for $103,000. Mast promised to send documents confirming the agreement, but it never did. Finally, Bazak sent a memorandum to Mast confirming the agreement, describing the
. ETHICS Jacob Deutsch owned commercial property. He orally agreed to rent it for six years to Budget Rent A Car. Budget took possession, began paying monthly rent, and, over a period of several months, expended about $6,000 in upgrading the property. Deutsch was aware of the repairs. After a year,
. When they were dating, Kris promised his wife Wendellyn that, if she moved to Wyoming and married him, he would take care of her for the rest of her life. Three years later, the couple filed for divorce and Wendellyn claimed that Kris’s oral promise entitled her to care for life. Kris argued
. Robins, an art collector, sold a painting by artist Marlene Dumas named Reinhardrt’s Daughter to Zwirner, an art dealer. Since both men knew that Dumas would disapprove of the sale, Zwirner promised Robins that he would always keep the transaction confidential. Years later, Robins learned that
. YOU BE THE JUDGE WRITING PROBLEM Because of his success in a big case, a lawyer named Melbourne promised his assistant, Barbara, a large bonus.After the case settled, Melbourne met with Barbara to discuss when and how much he would pay her. In the conversation that she secretly recorded,
. Landlord owned a clothing store and agreed in writing to lease the store’s basement to another retailer. The written lease, which both parties signed,(1) described the premises exactly, (2) identified the parties, and (3) stated the monthly rent clearly. But an appeals court held that the lease
. Richard Griffin and three other men owned a grain company, called Bearhouse, Inc., which needed to borrow money. First National Bank was willing to loan$490,000, but it insisted that the four men sign personal guarantees on the loan,committing themselves to repaying up to 25 percent of the loan
. In December 2019, Eric hired a band to play at his MBA graduation party in 2021.The parties agreed that the band would play five songs for $450 on May 15, 2021, but the deal was never put into writing. In January 2021, if Eric wanted to cancel the job without penalty, would he be able to do
. Mandy verbally tells a motorcycle dealer that she will make her son’s motorcycle payments if he falls behind on them. Will Mandy be legally required to live up to this agreement?(a) Yes, absolutely.(b) Yes, if her son is under the age of 18.(c) Yes, if Mandy will be the primary driver of the
. The common law Statute of Frauds requires that to be “in writing,” an agreement must be signed by:I. The plaintiff II. The defendant III. A notary public(a) Just I(b) Just II(c) Both I and II(d) I, I, and III
. Rafaella wants to plant a garden, and she agrees to buy a small piece of land for$300. Later, she agrees to buy a table for $300. Neither agreement is put in writing.Which of the following is true?I. The agreement to buy land is enforceable Il. The agreement to buy the table is enforceable(a)
. CPA QUESTION Two individuals signed a contract that was intended to be their entire agreement. The parol evidence rule will prevent the admission of evidence offered to: —(a) explain the meaning of an ambiguity in the written contract.(b) establish that fraud had been committed in the formation
. When Steven Simkin and Laura Blank divorced in 2006, they agreed to split their$13.5 million fortune evenly. Two years later, it became evident that Simkin had a problem: His half was invested in Bernard Madoff’s giant Ponzi scheme and he lost millions. Simkin asked Blank to revise their deal
. Do you have sympathy for intoxicated people who make agreements? Should the law ever let them back out of deals when they sober up? After all, no one forced them to get drunk. Should the law be more lenient, or is it reasonable as it currently exists?
. Paula was alone, pregnant, and confused. She needed help and support, which she found at Methodist Mission Home of Texas. In the days following her child’s birth, representatives of Methodist Mission forcefully told her that she had no moral or legal right to keep her child: She had to place
. Ball-Mart, a baseball card store, had a 1968 Nolan Ryan rookie card in almost perfect condition for sale. Any baseball collector would have known that the card was worth at least $1,000; the published monthly price guide listed its market value at$1,200. Bryan was a 12-year-old boy with a
. Contract law gives minors substantial legal protection. But does a modern high school student ued so much protection? Older teens may have been naive in the 1700s, but today, they are quite savvy. Should the law change so that only younger children—perhaps those age 14 and under—have the
. Sixteen-year-old Travis Mitchell brought his Pontiac GTO into M&M Precision Body and Paint for body work and a paint job. M&M did the work and charged$1,900, which Travis paid. When Travis later complained about the quality of the work, M&M did some touching up, but Travis was still dissatisfied.
. While on a cruise, DePrince inquired about the price of a 20-carat diamond in the ship’s gift shop. After confirming with the cruise line’s corporate office, the salesperson told DePrince that the price was $235,000. DePrince’s traveling companions, who both happened to be gemologists, told
. Morell bought a security guard business from Conley, including the property on which the business was located. Neither party knew that underground storage tanks were leaking and contaminating the property. After the sale, Morell discovered the tanks and sought to rescind the contract. Should he
. Roy Newburn borrowed money and bought a $49,000 truck from Treadwell Ford.A few months later, the truck developed transmission problems. Newburn learned that the truck had 170,000 more miles on it than the odometer indicated. The company admitted the mileage error and promised to install a new
. Maurine and Mamie Mason saw numerous advertisements for Chrysler Fifth Avenue automobiles. The ads described the car as “luxurious,” “qualityengineered,”and “reliable.” When they went to inspect the car, the salesman told them the warranty was “the best... comparable to Cadillacs
. Scarborough’s Department Store opens for business on a busy shopping day just before Christmas. A hurried clerk places a sign in the middle of a table piled high with red cashmere sweaters. The sign reads, “SALE—100% Cashmere—$0.99 Each.” The sign, of course, was supposed to read “$99
. Angela makes a material misstatement of fact to Lance, which he relies on when he signs Angela’s contract. Fraud exists if Angela made the misstatement:I. intentionally II. recklessly III. carelessly(ayer Tisiit(b) I and II only(c) Only I(d) Only II
. Jerry is so mentally ill that he is unable to understand the nature and consequences of his transactions, but he has not been adjudicated insane. Penny has been adjudicated insane and has a court-appointed guardian. Which of the following statements are true:(a) Both contracts are void.(b) Both
. During an evening spent wining and dining customers, Veronica signs two contracts.When she signs the first contract, her blood alcohol level is 0.09, which is just above her state’s threshold for drunk driving. When she signs the second contract, she is so drunk she does not know where she is
. Kerry finds a big green ring in the street. She shows it to Leroy, who says, “Wow.That could be valuable.” Neither Kerry nor Leroy knows what the ring is made of or whether it is valuable. Kerry sells the ring to Leroy for $100, saying, “Don’t come griping if it turns out to be worth two
. ETHICS Some commentators argue that Walker-Thomas Furniture was providing a valuable service to Mrs. Williams and that the litigation ultimately harmed her community. No other business of the time was willing to offer credit to people of such limited means, much less to African-Americans. As a
. When Ruth Klopp was injured in a serious accident with an uninsured motorist, she filed a claim under her own policy with Worldwide Insurance. Her policy contained an arbitration provision, stating that if the arbitrators awarded more than $15,000, either side could appeal to the courts, but a
. Imagine that you are starting your own company in your hyper-competitive industry:You are putting your life savings, your professional contacts, and your innovative ideas on the line. As you begin to hire a sales force, you consider binding new employees to non-compete agreements. Outline the
. Van hires Lan to add an electrical outlet to his living room for his new TV. Lan does an excellent job, and the new outlet works perfectly. She presents Van with a bill for $200. But Lan is not a licensed electrician. Her state sets licensing standards in the profession to protect the public. And
. Do you believe that gambling by adults shou/d be regulated? If so, which types?Rate the following types of gambling from most acceptable to least acceptable:— online poker - state lotteries - horse racing— casino gambling - bets on pro and college sports - fantasy sports
. ETHICS Richard and Michelle Kommit traveled to New Jersey to have fun in the casinos. While in Atlantic City, they used their MasterCard to withdraw cash from an ATM conveniently located in the “pit”—the gambling area of a casino.They ran up debts of $5,500 on the credit card and did not
. YOU BE THE JUDGE WRITING PROBLEM Oasis Waterpark, located in Palm Springs, California, sought out Hydrotech Systems, Inc., a New York corporation, to design and construct a surfing pool. Hydrotech replied that it could design the pool and sell all the necessary equipment to Oasis, but it could
. Cranwell Associates owned a 42-story skyscraper in midtown Manhattan. The building had a central station fire alarm system, which was monitored by Holmes Protection. A fire broke out and Holmes received the signal. But Holmes’s inexperienced dispatcher misunderstood the signal and failed to
. The Basultos were Cuban immigrants who spoke only Spanish. When they purchased a new minivan from Potamkin Dodge, the dealer had them sign a blank, English-language contract with the promise that he would fill in the agreed-upon numbers later. But then the dealer completed the sales contract with
. Barbara Richards leased an apartment at a complex owned by Twin Lakes. The lease declared that Twin Lakes would maintain the common areas, but it would not be responsible for any harm, anywhere on the property, even if it was caused by Twin Lakes’ negligence. Richards slipped and fell on
. Guyan Machinery, a West Virginia manufacturing corporation, hired Albert Voorhees as a salesman and required him to sign a contract stating that if he left Guyan, he would not work for a competing corporation anywhere within 250 miles of West Virginia for a two-year period. Later, Voorhees left
. When Boris arrives at the restaurant, he realizes that his cell phone only has 3%charge left. The waiter offers to charge his phone in the kitchen, but requires him to sign an exculpatory clause saying that the restaurant is not liable for anything that happens to the phone under any
. Ryder goes to a baseball game. The back of his ticket clearly reads: “Fan agrees to hold team blameless for all injuries occurring at the stadium—pay attention to the game at all times for your own safety!” In which of the following scenarios can Ryder sue the baseball franchise?(a) In the
. KwikFix, a Fortune 500 company, contracts with Allied Rocket, another huge company, to provide the software for Allied’s new Jupiter Probe rocket for $14 million.‘The software is negligently designed, and when the rocket blasts off from Cape Kennedy, it travels only as far as Fort Lauderdale
. Now assume the same facts, except that Vicki has loaned George $50,000. If the insurance company refuses to pay,(a) Vicki will win $100,000, but only if she mentioned animal bites to the insurance agent.(b) Vicki will win $100,000 regardless of whether she mentioned animal bites to the insurance
. Ata party, George casually mentions that he is going to learn to BASE jump during spring break. (BASE jumping involves jumping off a cliff and deploying a parachute.to land.) Vicki, an acquaintance, overhears him, and the next day she purchases a$100,900 life insurance policy on George’s life.
. Wells Fargo Armored Service offered a $25,000 reward for information leading to the arrest and conviction of the person who shot one of its guards. Slattery worked as an independent contractor conducting lie detector tests in the State Attorney’s office.While he was questioning a man about an
. In the bleachers .. . “You’re awesome, George!” Mike exclaimed. “Who else would give me a ticket to the big game?”“No one, Mike, no one.”“Let me offer my thanks. I'll buy you a beer!”“Ah,” George said. “A large beer would hit the spot right now.”“Small. Let me buy you
. ETHICS Melnick built a house for Gintzler, but the foundation was defective.Gintzler agreed to accept the foundation if Melnick guaranteed to make future repairs caused by the defects. Melnick agreed but later refused to make any repairs. Melnick argued that his promise to make future repairs was
. CeCe Hylton and Edward Meztista, partners in a small advertising firm, agreed to terminate the business and split assets evenly. Meztista gave Hylton a two-page document showing assets, liabilities, and a bottom line of $35,235.67, with half due to each partner. Hylton questioned the accounting
. American Bakeries had a fleet of over 3,000 delivery trucks. Because of the increasing cost of gasoline, the company was interested in converting the trucks to propane fuel. It signed a requirements contract with Empire Gas, in which Empire would convert “approximately 3,000” trucks to
. Non-compete agreements are common features of employment contracts. Currently, courts enforce these clauses.(a) always(b) usually(c) rarely(d) never
. Which of these statements is true?I. Under the UCC, an output contract is acceptable II. Under the UCC, a requirements contract is acceptable(a) Both I and II(b) Neither I nor II(c) Just I(d) Just I
. Ted’s wallet is as empty as his bank account, and he needs $3,500 immediately.Fortunately, he has three gold coins that he inherited from his grandfather. Each is worth $2,500, but it is Sunday, and the local rare coins store is closed. When approached, Ted’s neighbor Andrea agrees to buy the
. Which of the following requires consideration in order to be binding on the parties?I. Modification of a contract involving the sale of real estate II. Modification of a sale of goods contract under the UCC(a) Both I and II(b) Neither I nor II(c) Just I(d) Just II
. For consideration to exist, there must be:(a) a bargained-for exchange.(b) a manifestation of mutual assent.(c) genuineness of assent.(d) substantially equal economic benefits to both parties.
. Ryan Leslie, a rapper, was distraught when someone stole his computer and external hard drive because they contained some music he was writing. To retrieve his items, he created a You Tube video promising to pay $20,000 to anyone who returned his property. Leslie later increased the reward to $1
. If you click an “I agree” box, odds are that its terms are binding on you, even if the box contains dozens or even hundreds of lines of dense text. Is this fair? Should the law change to limit the enforceability of clickwraps?
. Someone offers to sell you a concert ticket for $50, and you reply, “Ill give you$40.” The seller refuses to sell at the lower price, and you say, “OK, OK, I’ll pay you $50.” Clearly, no contract has been formed because you made a counteroffer.If the seller has changed her mind and no
. The day after Thanksgiving, known as Black Friday, is the biggest shopping day of the year. One major retailer advertised a “Black Friday only” laptop for $150.On Thanksgiving night, hundreds of people waited for the store to open to take advantage of the laptop deal—only to learn that the
. Case law tells us that a course syllabus is not a binding contract—but how about your school’s honor code? Under what conditions could an honor code be a contract?
. Each time employees at BizCorp enter their work computers, the following alert appears: “You are attempting to access the BizCorp network. By logging in, you agree to BizCorp’s Computer Usage Policy and certify that your use of this computer is strictly for business purposes. Any activities
. Miller listed her home for sale. On August 4, Norman made an offer, specifying that it must be accepted by 5:00 p.m. on August 5. Miller received the offer, made several changes, signed it, and returned it to Norman. Norman did not respond. On August 5 at noon, Segal offered to buy Miller’s
. Machado Ford published the following newspaper ad: “Buy a New Ford and Get$3,000 Minimum Trade-In Allowance.” Izadi attempted to purchase a new Ford Ranger valued at $6,595 for $3,595 in cash plus his trade-in (assuming the minimum trade-in allowance). Machado refused. The ad’s superfine
. When a Tom Cat Bakery delivery van struck Elizabeth Nadel and she suffered significant injuries, Nadel filed suit. Before the trial, ‘Tom Cat’s attorney offered a $100,000 settlement, which Nadel refused. While the jury was deliberating, the bakery’s lawyer again offered Nadel the $100,000
. The Tufte family leased a 260-acre farm from the Travelers Insurance Co. Toward the end of the lease, Travelers mailed the Tuftes an option to renew the lease. ihe option arrived at the Tuftes’ house on March 30 and gave them until April 14 to accept. On April 13, the Tuftes signed and mailed
. The town of Sanford, Maine, decided to auction off a lot it owned. The town advertised that it would accept bids through the mail, up to a specified date.Arthur and Arline Chevalier mailed in a bid that turned out to be the highest.When the town refused to sell them the lot, they sued. Result?
. Which of the following amounts to an offer?I. Ed says to Carmen, “I offer to sell you my pen for $1.”II. Ed says to Carmen, “I’ll sell you my pen for $1.”I]. Ed writes, “I'll sell you my pen for $1,” and gives the note to Carmen.(a) Ionly(b) Land II(c) II only(d) [and III(e) All of
. Frank, an accountant, says to Missy, “I’ll sell you my laptop for $100.” Missy asks,“Will you give me until tomorrow to make up my mind?” “Sure,” Frank replies.Which of the following is true?(a) Frank cannot revoke his offer, no matter what.(b) Frank cannot revoke his offer, but
. a postal worker gets the letter out of the mailbox and takes it to the post office. On January 5, the letter arrives in Manny’s mailbox. When (if ever) was a contract formed?(a) January 2(b) January 3(c) January 4 (d) January 5 (e) None of these—a contract has not been formed
. Manny offers to sell Gina his television for $100 on January 1.On January 2, Gina writes out a letter of acceptance. On January 3, Gina drops the letter in a mailbox. On January
. Arturo hires Kate to work in his new sporting goods store. “Look,” he explains,“I can only pay you $9.00 an hour. But if business is good a year from now, and you're still here, I’m sure I can pay you a healthy bonus.” Four months later, Arturo terminates Kate. She sues.(a) Kate will
. Rebecca, in Honolulu, faxes a job offer to Spike, in Pittsburgh, saying, “We can pay you $55,000 per year, starting June 1.” Spike faxes a reply, saying, “Thank you!I accept your generous offer, though I will also need $3,000 in relocation money.See you June 1. Can’t wait!” On June 1,

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