One criticism of the World Trade Organization is that it does not have an appellate
process for its decisions.
Because they are not shareholders or employees, students at a college or university
would not be considered stakeholders in the school they are attending.
A divorce proceeding is commenced by a spouse filing a decree for divorce with the
proper state court.
In many instances, the parties to a contract unintentionally benefit a third party when a
contract is performed. In such situations, the third party is referred to as an incidental
beneficiary.
If a restraint of trade is inherently anticompetitive, it becomes a violation by applying
the rule of reason.
Generally, unlicensed persons cannot recover payments for services that a regulatory
statute requires a licensed person to provide.
A principal adoption occurs when a person adopts a child from a social service
organization of a state.
The Lilly Ledbetter Fair Pay Act of 2009 provides that each discriminatory pay decision
“restarts” the statutory 180-day “clock.”
In applying the crashworthiness doctrine, courts have held that automobile
manufacturers are under a duty to design automobiles to take into account the
possibility of a ‘second collision.”
A patent is a grant by the federal government upon the inventor of an invention for the
exclusive right to use, sell, or license the invention for an unlimited amount of time.
Antitrust defendants often opt to settle government-brought antitrust actions by entering
into a consent decree in a criminal action.
If the collateral is inventory, the perfected purchase money security interest prevails if
the purchase money secured party gives written notice of the perfection to the perfected
nonpurchase money secured party.
An inferior court is a court whose decision must be approved by a higher court in order
to be effective.
A bailment may be either express or implied.
Advertising may be found false and deceptive under the Federal Trade Commission
Act, even without proof of actual deception.
Service of process is permitted during a special appearance.
Where two parties contract for the sale of an old violin, but neither party realizes that it
is a rare and extremely valuable violin, this is a mutual mistake of fact allowing
rescission.
If the three (3.) largest automobile manufacturers agreed among themselves what price
they would pay to purchase tires from tire manufacturers, this would be buyers’ illegal
per se price fixing.
In evaluating the adequacy of a product’s design, some courts apply a “risk-utility”
analysis, which requires proof that the product is more dangerous than the ordinary
consumer would expect.
An e-license is a contract whereby the owner of software or a digital application grants
unlimited rights to the owner of a computer or digital device to use the software or a
digital application for an unlimited period.
A sole proprietorship is the most complex form of business organization.
A person who is concerned about his or her ownership rights in a parcel of real property
can bring a quiet title action, which is a lawsuit to have a court determine the extent of
those rights.
If an innocent misrepresentation is made, the aggrieved party may rescind the contract
but may not sue for damages.
Generally, punitive damages are not recoverable for breach of contract.
A limited liability company is liable for any loss or injury caused to anyone as a result
of a wrongful act or omission by a member, a manager, an agent, or an employee of the
LLC who commits the wrongful act while acting within the ordinary course of business
of the LLC or with authority of the LLC.
If a married couple who lives in a non-community property state purchases real
property located in a community property state, community property laws apply to that
property.
The Securities and Exchange Commission is an administrative agency composed of five
(5.) members who are appointed by the United States president.
The main office of the 9th Circuit of the United States Court of Appeals is located in
Washington, D.C.
Intermediate appellate courts review the trial court record to determine whether there
have been any errors at trial that would require reversal or modification of the trial
court’s decision.
Whistle-blowers can be awarded up to 25% of the amount recovered by the federal
government.
Unless otherwise agreed, a tenant in common can sell, give, devise, or otherwise
transfer his or her interest in the property without the consent of the other co-owners.
The Uniform Limited Liability Company Act codifies LLC law.
The most common method of acquiring title to personal property is by purchasing the
property from its owner.
Amanda says to Josh, “I’ll pay you $30 if you mow my lawn tomorrow.” Josh says
nothing. If Josh doesn’t mow her lawn, Amanda can sue Josh for breach of contract.
The issuer is permitted to “condition” the market during the “pre-filing” period.
The Equal Employment Opportunity Commission can adjudicate employment
discrimination disputes, but cannot conduct its own investigations.
A special indorsement creates bearer paper.
If the U.S. Supreme court reaches a tie decision:
A) the case will be reconsidered in the following year.
B) the decision will be held in abeyance until one of the justices decides to change his
or her mind.
C) the case will be returned to the Circuit Court of Appeals to reconsider the case in
light of the tie decision by the Supreme Court.
D) the lower court decision in the case is overturned.
E) the lower court decision in the case is affirmed.
Which of the following is not one of the general conditions protected under the
Americans with Disabilities Act of 1990?
A) a physical impairment that substantially limits a major life activity
B) a mental impairment that substantially limits a major life activity
C) a record of an impairment that substantially limits a major life activity
D) an inability to undertake an activity that one was once capable of completing
E) a perception by others that one has an impairment that substantially limits a major
life activity when one does not, in fact, have such an impairment
Harrison and Susie form a limited liability corporation. Harrison makes a capital
contribution of $90,000, and Susie makes a capital contribution of $10,000. They have
no agreement as to how profits are to be shared. If the limited liability company makes
$100,000 in profits in its first year, under the Uniform Limited Liability Act, how will
the profits be divided?
A) Harrison will receive $50,000, and Susie will receive $50,000.
B) Harrison will receive $90,000, and Susie will receive $10,000.
C) Pursuant to the requirements of the Uniform Limited Liability Act, they will divide
the profits after twenty percent of the profits are reinvested in the company.
D) Pursuant to the Uniform Limited Liability Act, they will divide the profits consistent
with their respective proportional capital contributions, after twenty percent of the
profits are reinvested in the company.
E) The first $100,000 of earnings must be reinvested in the company.
You and Gary enter a contract where you will receive $1,000 if you tamper with a slot
machine in the “Bye-bye Bucks Casino” in Las Vegas so that Gary can make it pay out
a jackpot whenever he wants it to. Assume it is illegal to tamper with the machine. You
perform your part of the contract, but Gary doesn’t pay. In your breach of contract suit
against Gary, the court will:
A) find you guilty of tampering with a gaming device.
B) make him pay you if he has benefited from making the machine pay out.
C) make him pay you regardless of whether he has received any payouts because you
have performed your part of the contract.
D) ignore the contract and dismiss the case.
E) make him pay you half the amount because there would be a 50% reduction due to
the illegality.
Which of the following is false regarding the intrastate offerings exemption?
A) The issuer must be a resident of the state for which the exemption is claimed.
B) The purchasers of the securities may be residents of any state.
C) There is no limit on the dollar amount of capital that can be raised pursuant to an
intrastate offering exemption.
D) The issuer must be doing business in the state for which the exemption is claimed.
E) Eighty percent of the issuer’s assets must be located in the state for which the
exemption is claimed.
A seller and buyer have just agreed that the buyer will purchase 1,000 of the widgets
from the thousands that the seller has in its warehouse. The buyer will pick them up at
the seller’s warehouse. The day before the buyer is to pick them up, the seller’s
employee sets the 1,000 widgets aside. What is the significance of setting the buyer’s
widgets aside?
A) It shifts the risk of loss to the buyer.
B) It constitutes identification.
C) It terminates the buyer’s ability to revoke its offer.
D) It fully discharges the seller’s duties under the contract.
E) The seller has an obligation to insure the goods against destruction or loss.
Under the Uniform Computer Information Transactions Act, if a consumer makes a
unilateral electronic error in an electronic contract, which of the following is the
consumer not required to do in order to avoid being bound by the error?
A) upon learning of the error, promptly notify the other party
B) explain the cause or source of the error to the other party
C) refrain from using or benefitting from the information or making it available to a
third party
D) deliver all copies to the other party, or destroy them pursuant to the other party’s
instructions
E) pay the shipping, reshipping and processing costs of the other party
The U.S. Constitution directly established which federal court(s)?
A) the U.S. Supreme Court
B) federal district courts
C) the U.S. Supreme Court and federal district courts
D) the U.S. Supreme Court and federal courts of appeal
E) the U.S. Supreme Court, federal courts of appeal, and federal district courts
What is required in order for a court to issue an injunction?
A) any breach of contract
B) any breach of contract that causes injury to the other party
C) any situation that justifies the award of specific performance
D) a showing that the party requesting the injunction would suffer irreparable injury
without the injunction
E) proof that the party requesting the injunction would win any breach of contract
lawsuit
Which of the following is true when someone accidentally makes an improvement to
the personal property of another where the owner was unaware of the improvement
until after it had been made?
A) The property owner gets to keep the improvement in all circumstances, and is not
required to pay for it.
B) The property owner gets to keep the improvement in all cases, but must pay the
party who improved it the reasonable value of the improvement.
C) The party who made the improvement can remove it if this is possible; otherwise,
the owner of the property gets to keep the improvement and is not required to pay for it.
D) The party who made the improvement can remove it if such removal is possible;
otherwise, the owner of the property gets to keep the improvement, but must pay the
party who improved it the reasonable value of the improvement.
E) The party who made the improvement must be paid for the improvement, so long as
it is undisputed that the fair market value of the property has been increased as a result
of the improvement.
The UCC permits parties to a sales or lease contract to establish in advance in their
contract the damages that will be paid upon breach of contract. Such pre-established
damages, called ________ damages, substitute for actual damages.
A) nominal
B) consequential
C) incidental
D) liquidated
E) punitive
A Mexican friend of yours owns a successful factory that makes low-cost athletic shoes
in Mexico City. Your friend tells you that his plan is to flood the American market with
the shoes, and that he has absolutely no concern regarding tariff restrictions, because
under the North American Free Trade Agreement, tariffs are absolutely prohibited. Do
you agree?
A) no, because under the North American Free Trade Agreement, a country can
reinstate tariffs if an import surge from a nation that is a party to the agreement hurts the
other country’s economy or its workers
B) no, because the North American Free Trade Agreement does not address the issue of
tariffs
C) no, because the North American Free Trade Agreement actually requires the
imposition of tariffs
D) yes, tariffs are absolutely prohibited under the North American Free Trade
Agreement
E) yes, but only because the North American Free Trade Agreement does not apply to
consumer goods
The ________ Rule regarding successive assignments provides that the first assignee to
give notice to the obligor prevails.
A) French
B) Maltese
C) English
D) Spanish
E) Canadian
Sid is a 15-year old sophomore at East High School. He purchases a computer at a local
store for a computer class, but wants to return it after using it for a couple of weeks
because his classmates have nicer computers than his and he wants to get one of the
better models. He did not misrepresent his age. Which of the following statements is
correct?
A) Sid cannot return the computer because he ratified the contract by using the
computer.
B) Sid cannot return the computer but be liable for only its fair value if the computer is
considered to be a necessary.
C) Sid cannot return the computer because Sid should not have entered a contract as a
minor, and because he did, he will be treated as an adult.
D) Sid can be required to return the computer whether he wants to or not because
minors cannot enter into contracts.
E) Sid cannot return the computer because minors are always responsible for their
purchase of computers and computer games.
A wholesale distributor who is named in a product liability suit based on strict liability
could avoid liability if:
A) the plaintiff had not purchased the product causing the injury.
B) the distributor exercised reasonable care in all ways with respect to the product
causing the injury.
C) this product had been used for many years by other users without injury.
D) the defect that caused the injury occurred because of a modification performed after
the product left the distributor.
E) the product has been redesigned to correct the defect that caused the injury in this
case.
Robert is about to graduate from college and his parents tell him that because he is the
first member of the family to graduate college, they want to buy him a new but
inexpensive car. They have the money to buy the car and Robert is excited. In fact,
Robert has never owned a car and this will be his first. On graduation day, his parents
tell him that they have decided to use the car money for a vacation and there will be no
car. If Robert chooses to sue his parents, will he be successful in the litigation?
A) Robert can successfully sue based on promissory estoppel.
B) Robert can successfully sue based on the promise of a gift.
C) Robert cannot successfully sue because he did not rely to his detriment on the
promise.
D) Robert cannot successfully sue because the promise was not reasonable.
E) Robert can sue his parents for the value of the car because their promise was never
revoked.
Which of the following is not one of the general categories of goods subject to a
security interest under Article 9 of the UCC?
A) consumer goods
B) equipment
C) real estate
D) farm products
E) inventory
The one-year period for determining whether a contract is required to be in writing
under the statute of frauds is measured from the date that:
A) the contract is formed until its stated completion date.
B) performance begins until it is actually completed.
C) the contract is formed until it is actually completed.
D) performance begins until its stated completion date.
E) the contract is formed until an objectively reasonable completion date.
Which of the following is true about Rule 16(a) of the Securities Exchange Act of 1934
regarding short-swing profits?
A) It applies only to officers and directors of the corporation.
B) It provides for recovery from a statutory insider by the other party to the transaction.
C) It covers any trades occurring within one year of each other.
D) It provides that any profits made by a statutory insider on trades occurring within six
months of each other belong to the corporation.
E) It provides that any profits made by a statutory insider on trades occurring within six
months of each other belong to the corporation, but only if insider information was used
to generate the profits.
If a company that is the target of a hostile tender offer locates another corporation that
will be friendlier to management and agrees to be taken over by this second company,
this action is often referred to as:
A) a reverse tender offer.
B) a “greenmail” payment.
C) the selling of a “crown jewel.”
D) adopting a “poison pill.”
E) a “white knight” merger.
Two friends, Ann and Mary, are having Margaritas at happy hour. There had been no
discussion of who would pay for the drinks. After the third round of drinks, Ann said, “I
will pay for everything tonight including your drinks.” A couple of minutes later before
any more drinks were ordered, Ann says, “I’ve changed my mind. I just remembered
that they might be having layoffs at my toxic job tomorrow.” Mary wants to force Ann
to perform on her promise and threatens to sue. In this circumstance a court would:
A) not require Ann to follow through on the promise because it was a gratuitous
promise.
B) require Ann to follow through on the promise under the doctrine of promissory
estoppel.
C) require Ann to follow through on the promise if Mary had previously paid a
comparable amount for food or drinks consumed by Ann.
D) require Ann to follow through on the promise if it would be a hardship for Mary to
pay for her own drinks.
E) not require Ann to follow through on the promise because it would encourage Mary
to drink.
Which of the following statements would most likely create an express warranty?
A) “This is the best used car available in town.”
B) “This painting is worth a fortune.”
C) “Others would gladly pay $20,000 for this car.”
D) “You look like a million bucks in that dress.”
E) “This car has been driven only 20,000 miles.”
Which of the following actions could be taken by an offeree?
A) rejection
B) rejection or revocation
C) rejection, revocation or counteroffer
D) revocation or counteroffer
E) rejection or counteroffer
In the absence of an agreement to the contrary, all general partners have a(n) ________
right to participate in the management of the general partnership business.
A) conditional
B) qualified
C) express
D) equal
E) disproportionate
Herb and Henrietta live in a large city. Herb works as a supervisor at a local factory, and
Henrietta has taught Latin for many years in the local high school. Their financial
situation is fairly simple. They have a savings account, a small retirement plan, and they
still own the first home that they bought as newlyweds. When they bought their current
home they kept the first home and have used it as rental property. Herb and Henrietta
are baffled by the entire concept of income taxes. The accountant who had prepared
their taxes for many years died during the last year. Not knowing where to turn, they
took their taxes to one of the large international CPA firms. The CPA firm accepted the
work, with the parties agreeing that the fee for the tax return preparation would be
$350. Most of this CPA firm’s tax clients had far more complicated tax situations than
that of Herb and Henrietta. The firm had a practice of contracting out the preparation of
the simplest tax returns. Discuss the propriety of the CPA firm’s actions.
When television personalities make fun of the President, they are engaging in:
A) protected speech.
B) limited protected speech.
C) unprotected speech.
D) commercial speech.
E) disparagement.
Bill and Sam get into a heated argument regarding over whether a political candidate
has been guilty of fraud. Sam makes a fist and acts as if he is going to hit Bill. Bill is
apprehensive of immediate harm, but Sam drops his arm before he actually hits bill and
says he was just kidding. Sam also apologizes for any inappropriate behavior. For
which tort or torts could Sam be held liable?
A) assault
B) battery
C) assault and battery
D) assault, battery, and negligence
E) Sam could not be held liable for anything because he said he was just kidding and he
apologized.
Molly recently remodeled her apartment. Molly’s walls were bright orange and pink,
but she was unable to find any furniture to match her new color scheme. Molly went to
a furniture store who orally offered to make Molly her bright orange and pink couch for
$1,000. Molly ordered the couch on July 1 and placed a deposit. Nothing was put in
writing. On July 2, the furniture store made half of the couch. On July 3, Molly called
the furniture store and said she no longer wanted the couch and refused to pay the
remaining money owed on the couch. The furniture store sues Molly, who wins under
Article 2 of the UCC?
A) The furniture store wins because the couch was a specifically manufactured goods.
B) The furniture store wins because Molly’s deposit created a contract to buy the couch.
C) Molly wins because the agreement to purchase the couch should have been in
writing.
D) Molly wins because under Article 2 of the UCC, Molly has 10 days to cancel a
contract.
E) Molly wins because she is not obligated to pay for the couch until it is delivered to
her.
________ damages include reasonable expenses incurred in stopping delivery,
transportation charges, storage charges, sales commission, and the like incurred in the
exercise of the seller’s or lessor’s right to dispose of goods.
A) Nominal
B) Punitive
C) Incidental
D) Incendiary
E) Liquidated
Mona is opening a new business selling fake fur coats. She organizes the company as a
limited liability company called Fake-It, LLC and borrows $100,000 from a local bank
in Fake-It’s name. She also signs a personal guarantee at the bank promising to pay the
debt of Fake-It. A friend of hers, Tanner, a second-year law student, advises her not to
worry about the personal guarantee, because under the law of limited liability
companies, it would be illegal for anyone to attempt to hold her liable for debts of the
company. Is Tanner right?
A) yes, Tanner is right, and the bank violated the law by asking Mona to sign a personal
guarantee
B) yes, Tanner is right, but only if Mona can establish that she did not know the bank
was asking her to do anything illegal when she signed the agreement
C) yes, Tanner is right, but the bank may recover its loan from Mona’s capital
contribution
D) no, Tanner is wrong, but only because Mona has opened a business selling goods,
rather than real estate
E) no, Tanner is wrong, because a member of a limited liability company is personally
liable for the debts of a limited liability company when a personal guarantee is provided
Regulation ________ sets forth detailed rules for compliance with the Truth in Lending
Act.
A) A
B) B
C) X
D) Y
E) Z
In order to enter into a treaty with a foreign nation, the executive branch needs:
A) no further approval.
B) the approval of the Senate.
C) the approval of the House of Representatives.
D) the approval of the Senate and the House of Representatives.
E) the approval of the Senate and the Supreme Court.
Marsha works for a factory as an assembler on an assembly line. She is an hourly
worker and is not paid for lunch time. Everyone takes lunch at the same time, as the line
shuts down from noon to 12:30 pm. One lunch period she slips on some spilled coffee
in the company cafeteria and breaks her leg. Is she entitled to workers’ compensation?
A) no, because she was “off the clock”
B) no, because eating is not a work-related function
C) yes, because it was a company cafeteria operating during normal business hours
D) yes, because she likely would not have been injured had she left the premises during
lunch, so fairness requires that she be covered
E) yes, if the employer knew the coffee had been spilled and yet did nothing to remedy
the situation; however, if the employer was not aware of the danger, the employer
would not be required to pay Marsha workers’ compensation benefits
Electronic sales and lease contracts are covered by which provisions of the UCC?
A) Article 2 (Sales) and Article 2A (Leases)
B) Article 2 (Sales) and Revised Article 2A (Leases)
C) Revised Article 2 (Sales) and Article 2A (Leases)
D) Revised Article 2 (Sales) and Revised Article 2A (Leases)
E) Electronic sales and lease contracts are not covered by the UCC.
What is the effect of a corporation using cumulative voting?
A) Shareholders who miss a meeting can save those unused votes to be voted at a later
meeting.
B) All votes taken at a shareholders’ meeting will be conducted at the end of the
meeting.
C) When several issues at a shareholders’ meeting will be voted on, a shareholder can
choose to abstain from voting on some issues, and save those votes for more important
shareholder issues.
D) When electing members of the board of directors, the votes may be aggregated in
such a way that minority shareholders will be more likely to get at least some
representation on the board.
E) When electing members of the board of directors, the votes may not be aggregated in
such a way that minority shareholders will be more likely to get at least some
representation on the board.
Fast Bikes is a bicycle manufacturer, employing about one hundred workers.
Competition has been fierce, so sales have remained relatively level for several years.
Management decides that they need to retool the manufacturing process and move from
aluminum and steel frames to carbon and titanium frames. They announce their plans to
the workforce, and further announce that due to the costs of the changeover, raises in
the coming year will be suspended, although there will be no layoffs. Naturally, the
workers are upset, and they start to discuss unionization. When management hears
about the proposed union plans, they announce that they will “close the plant before
they let a union tell them what to do.” They also meet with employee organizers and tell
them that the next time they hear the word “union” spoken on the premises, they will
fire all employees participating in unionization efforts. Scared and confused, the
employees seek assistance from the National Labor Relations Board. Can the employer
make and carry through on its threats?
On a hot summer afternoon, Rob takes his brand new Rocketski (a personal watercraft
similar to a Jet Ski and sometimes referred to as a “waterbike”) out to a local park at a
reservoir to try it out. The Rocketski has a built-in CD stereo sound system, with
speakers, but also with a headphone jack. The owner’s manual contains a warning that
the headphones should only be used in light traffic areas and with extreme caution. Rob
takes the Rocketski out on the water and puts the headphones on with his new CD, the
greatest hits of the Ultradeath Slashers and Destroyers. He takes the machine out to the
open area of the reservoir and tries out the machine. He’s never done this before, is
having lots of fun, and then wants to show his friends back on shore how fast the
Rocketski can go. He comes close to shore at full speed where there are many
swimmers and sailboards in the water. Several swimmers are yelling at him to stop, but
he doesn’t hear anyone because he’s listening to his favorite song, “Destroy Me Bad,
My Love,” at full volume on the headphones. He is rapidly approaching Sally on her
sailboard, but doesn’t see her because he’s looking for his friends on shore. He would
have missed Sally (just barely), but just as he got near her the engine on the Rocketski
suddenly failed, causing the machine to lurch suddenly to the left and into Sally and her
sailboard. Sally suffers severe injuries and sues Rocketski, Inc. Discuss the likely basis
of the suit, claims raised, possible defenses, and likely outcome, assuming that the
engine defect occurred in the manufacture of the Rocketski.
Why are patents protected for a limited period of time? Does this argue in favor of not
patenting an item?
Boomer, a New York State resident, is selling his New York home. His mortgage, held
by a California bank, must be paid in full. Since interest accrues at almost $50 per day
until the payoff is received, he wants to get the money to the mortgage company as
quickly as possible. What UCC-authorized method of payment would be best for him to
require the settlement agent to utilize?
Mike says to Aimee, “If you come to my home once a week and dust, vacuum and
clean, I’ll pay you $80.00 each time.” Aimee shows up the following week, performs the
three duties and Mike pays her the $80.00. The next week when Aimee fails to show up,
Mike calls her and she tells him that she no longer wishes to do housework for him.
Mike claims they have a contract and Aimee says, “Sue me!” If Mike in fact sued, what
would the outcome be and why?
Louie opened a very successful restaurant, Louie’s Luscious Liver Livery, which serves
liver twenty-five different ways. Louie has decided to franchise his business concept,
but he is worried that franchisees might not meet his standards. Thus, Louie has drafted
comprehensive provisions giving him broad powers to terminate any franchises. There
is an extensive list of specific grounds that will allow Louie to terminate the franchise.
Further, one clause says Louie can terminate a franchise if “in Louie’s sole subjective
opinion, the owner and/or the franchisee restaurant does not properly project the
franchisor’s overall image.” Discuss these provisions.
You are the chairperson of Wayne’s World of Widgets (WWW). WWW employs about
4,000 people in a huge manufacturing facility located in Hooterville, a small Midwest
town on 8,000 total residents. WWW is Hooterville’s largest and only significant
employer. In fact, Hooterville is suffering from a 21% unemployment rate due to the
failure of a number of businesses in town. Your CFO has just delivered a report stating
that while WWW is currently profitable and is expected to remain so, if the plant were
closed and the facility moved to Tijuana, Mexico, WWW could save an enormous
amount of money due to reduced salaries, removal of benefits and other miscellaneous
costs. WWW would certainly like to increase profits but the move would devastate
Hooterville and the loyal WWW employees. The board is hotly debating the issue. They
ask you for a report discussing the move from a business ethics and responsibility
perspective.
Kirk was recently visited by a life insurance salesperson. The salesperson did an
especially good job of selling, and Kirk decided to buy several policies. In addition to a
policy on himself, Kirk purchased one policy each on the life of his wife, his son, his
aunt, his uncle and the old man who lives next door. Kirk has been married for twelve
years. His mother is sixty-two years old, and provides no support to Kirk. In fact, Kirk
has very little contact with her. His aunt provides no support, but had provided support
when Kirk was young and his parents were experiencing financial difficulties. Kirk
receives $10,000 each year as a gift from his uncle, but otherwise receives nothing from
him. Kirk has known the old man next door for eleven years, and often assists the old
man when he needs help. For which of these policies does Kirk have an insurable
interest?
Assume that in Colorado ski resorts can be classified as “large” and ‘small,” and that
there are twelve large and fifteen small resorts. Some owners own more than one resort.
Assume that there are two owners, each of whom owns two large resorts, who plan to
merge. Currently, each owner’s two resorts have approximately fifteen to twenty percent
of the Colorado ski market. Each owner’s two resorts have about thirty to thirty-five
percent of the Colorado Front Range “day-skier” market (people from the Colorado
Springs, Denver and Fort Collins areas who drive to a resort, ski, and drive home all in
one day). Assume that Colorado resorts combined have about forty percent of the
Rocky Mountain ski market, and about fifteen percent of the national ski market. Will
the merger be allowed, and what are the legal principles involved?
Why should the death or withdrawal of a partner result in dissolution of a partnership?
Dr. Vet, a veterinarian, started a new endeavor cooking and selling weight reduction
food and supplements for animal movie and television stars. Dr. Vet’s products were
very popular and in short supply because he prepared all the products himself. One of
his clients was Mighty Pup, who was going to be the star in the upcoming action movie,
“Pups Stop Alien Invaders IV.” In the first three invader movies, that were wildly
successful, Mighty Pup and been trim and agile. Mighty Pup’s owner was concerned
that Mighty Pup had eaten a few too many treats and was anxious to get some weight
reduction underway before the movie’s producer found out about Pup’s overindulgence.
The movie was set to begin filming October 31, 2010. Dr. Vet met with Mighty Pup and
owner on June 1, 2010, reviewed Pup’s situation, and sold Mighty Pup’s owner $2,000
in weight reduction food and supplements. Dr. Vet promised that the products would be
delivered by June 30, 2010, so that Mighty Pup could get busy with weight loss. On
June 10, Dr. Vet got a call from the owner of another canine star, Bugle Beagle, a
competitor of Mighty Dog. Beagle’s owner wanted some immediate assistance and
offered to pay triple the regular price. Dr. Vet only had a limited amount of weight
reduction food and supplements available. Dr. Vet wrote to Mighty Pup’s owner saying
that he would not be able to provide the products as promised on June 15. Pup’s owner
was very concerned and decided to go ahead and consult with the movie producer about
Mighty Pup. He did not call Dr. Vet and make any response. Instead, Mighty Pup’s
owner, who lived in Tennessee, spent a considerable amount of funds flying to
California with Mighty Pup to see the producer. The producer said that overindulgence
is the American way, and that the public would love a heftier Mighty Pup. Both Mighty
Pup and Mighty Pup’s owner were very happy. Meanwhile, Dr. Vet decided that he was
risking his reputation by canceling Mighty Pup’s order. He called up the owner of Bugle
Beagle and said that Bugle Beagle would have to wait. Dr. Vet called Mighty Pup’s
owner on June 28 and said that he would be able to provide the products as promised.
Mighty Pup’s owner said to forget it. Dr. Vet wants damages for breach of contract.
Discuss the legal concepts involved and who should win.
Frank entered into a loan agreement to lend a friend $10,000 at an agreed interest rate
of 18 percent. However, the state in which they both live has a statute that limits the
interest rate on loans of this type to 15 percent. The friend then made the first three
payments on the loan in accordance with the agreement, but has made no further
payments and now has several unpaid back payments. Discuss the different approaches
that a court might take in this situation.
Stableblades, Incorporated holds a patent on an inline skate that differs from others on
the market in that it has two rows of wheels. These skates are not quite as fast as regular
inline skates, but are much more stable, and are designed for older persons and persons
who skate only occasionally. Mary is a shareholder of Stableblades. Stableblades has
been selling this product for several years, and there are no similar products on the
market. Twice in the past few years, Stableblades has threatened litigation over patent
infringement, ands its legal assertiveness prevented many competitors from introducing
similar products. Recently, however, another competitor actually introduced a similar
product that Mary believes infringes on Stableblades’ patent. Mary has tried to get the
Stableblades Board of Directors to take action, but it refuses to do so. Mary suspects
that some of the board members would like to be elected to the competitor’s board of,
and this is the reason for their inaction. Explain Mary’s options in this situation, and
whether the actions of the board would be protected.
Why are contracts and strong contract law important to business?
A friend tells you that he or she would like to use a living trust rather than a will,
because a living trust would avoid probate, tax obligations, and the claims of creditors.
What is your response?
A group of graduate students was at a local nightclub listening to a band on a Saturday
night. This band was new to the area, although it had been together for a couple of years
in Seattle before moving to this town. As the students had more to drink, the music
sounded increasingly better. At the band’s last break, two of these students each
purchased a CD. Although he was so drunk that he should not have been driving, Bob
was aware of his actions and said that he wanted it because he thought the music
sounded fantastic. Peter was so intoxicated that he could barely get his money out, and
shortly after getting the CD tried to take a bite out of it, thinking that it was a cookie.
Several days later each listens to the CD and thinks that it sounds horrible. Can Bob and
Peter get a refund for their purchases?
At the end of her junior year of undergraduate college, Melissa needed a place to live.
She found an apartment that was available from May 15, 2010 to August 15, 2011. She
already knew in April of 2010 that she would need to take a couple of classes in the
summers of both 2010 and 2011. On April 20, 2010, Melissa received an unsigned lease
from the landlord for the period from May 15, 2010 to August 15, 2011. Melissa signed
the lease, made a copy that she signed, and sent the original back to the landlord. The
lease called for rent to be $900 per month for the entire term of the lease. Before she
moved in or paid the first month’s rent, the landlord told her that she had decided to
raise the rent to $1,000 per month. Can Melissa sue to enforce the lease agreement at
$900 per month?
Homestead exemptions in some “debtor-haven” states are enormous compared to the
homestead exemption allowed under federal bankruptcy law. Should states be able to
provide homestead exemptions much larger than the federal exemption and the
exemptions of most other states? Why would a state choose to have a large homestead
exemption? What are the advantages and disadvantages of a large homestead exemption
to such a state?
Discuss how the Communications Decency Act and how it applies to ISPs. Do you
agree or disagree with the protections provided under this law?
Cindy is thirty-six years old, and she works as a sales representative for a small
manufacturer. Cindy and her husband have been married for twelve years. They have no
children, because initially they wanted to establish their careers before taking on the
obligations of raising a family. Cindy has been trying to get pregnant for approximately
two years, without success. Cindy feels that she needs to reduce her working hours in
order to reduce her stress level, and thereby increase her ability to get pregnant. Cindy
currently works about sixty hours per week, and she wants to reduce her hours to about
forty hours per week. Cindy’s employer refuses to change her responsibilities, but her
employer will allow her to work fewer hours per week, provided that she completes all
of her work. Cindy tries to accomplish her work in fewer hours per week, and has some
success, reducing her average workweek to approximately fifty hours. However, she
still does not get pregnant, and she becomes depressed as a result. She tells a co-worker
about the depression, and news of this reaches Cindy’s supervisor. Her supervisor quits,
but does tells the personnel manager about Cindy’s depression before he leaves. Cindy
is eligible for promotion to her supervisor’s position. The personnel manager does not
promote Cindy, because he believes that all depressed persons are incapable of
working. In fact, Cindy began taking medication that is addressing her depression
favorably to the point that it is not affecting her work at all. Cindy brings a claim under
the Americans with Disabilities Act on the grounds that her inability to get pregnant is a
covered disability. She also sues over being denied the promotion. Discuss the strengths
and weaknesses of Cindy’s case.