“Check Your Answer” to the End-of-Chapter Case Questions
Chapter 1: Today’s Business Environment: Law and Ethics
Answers to Select Case Questions
2. The general rule that exists now is that since the government has ordered the posting of
warning labels on cigarettes, and since the dangers of smoking are well known, consumers have
been warned and are not due compensation if they kill themselves by smoking. The Cippoline
case, since reviewed by the Supreme Court, appears to be of limited impact since the victim was
4. The Court held it a form of sex discrimination to prevent women of child-bearing age from
holding the more dangerous jobs. The company argued that it did this to protect itself from
Chapter 2: The Court Systems
Answers to Select Case Questions
2. The traditional rule-apply the law where the injury occurred-would call for the application of
Missouri law. Here, the court, like many jurisdictions, rejected the traditional rule and adopted
the significant interests test. “The rights and liabilities of the parties with respect to an issue in
“South Dakota has all of the important contacts. First, the principal conduct which allegedly
caused the injury was the distribution of the candy in the bus on the first leg of the trip. Missouri
had no contact with that conduct. Even if Missouri could claim some limited contact with Dakota
Charter’s alleged failure to maintain a safe premises after the candy was distributed, Missouri’s
Applying the tests from the Restatement:
a. the needs of the interstate and international systems,
“First, neither Missouri nor South Dakota’s laws significantly affect the needs of
interstate systems because neither interstate relations nor automobile movement would be
influenced by either law.”
b. the relevant policies of the forum,
“This state’s policy has been clearly expressed by the legislature in our comparative
negligence statute.”
c. the relevant policies of other interested states and the relative interests of those states in
the determination of the particular issue,
“Although Missouri also has a comparative negligence policy, South Dakota has the only
significant interest in a determination of the comparative negligence issue because all of
the contacts are in South Dakota, and Missouri’s policy would not be furthered by its
application to South Dakota domiciliaries who have no important contact with Missouri.
Where the forums interests are the “most deeply affected” under these factors, it is
generally fitting that forum’s law should be applied.”
d. the protection of justified expectations,
“The protection of justified expectancy, although important in consensual relationships,
has no importance in this negligence action. Generally, people do not consider the legal
consequences of their conduct or how law may be applied prior to becoming involved in
an accident.”
e. the basic policies underlying the particular field of law,
“The policy of ameliorating the harsh consequences of common law contributory
negligence rules is furthered by both states’ comparative negligence laws. Although
Chambers argue that Missouri’s policy is better, that contention is debatable.
Furthermore, even if Missouri’s policy could be considered ‘better,’ conflicts analysis
should not be used to apply the law of a state that has no interest in having its rule
applied. The proper solution in such cases is to change the forum’s inferior law.”
f. certainty, predictability and uniformity of result,
“Little significance can be attached to the ease of determining and applying comparative
negligence law or to the certainty, predictability and uniformity of result. Both states’
laws are easy to determine and apply. Furthermore, because the differences in the law are
so minor, there will be few differences in result.”
g. ease in the determination and application of the law to be applied.
“Both states’ laws are easy to determine and apply. Furthermore, because the differences
in the law are so minor, there will be few differences in result.”
4. Vacated and remanded. The district court lacked jurisdiction, so the judgment is void. Parrot
Bay, a foreign corporation, is not responsible for the actions of the fishing boat operator, another
foreign entity. The relationship between Parrot Bay and the fishing boat operator did not arise out
6. There was a sufficient basis for specific jurisdiction. This exists when: 1) the non-resident
defendant purposefully availed himself of the privilege of conducting activities in the forum by
some affirmative act or conduct; 2) plaintiff’s claim just arise out of or result from defendant’s
Chapter 3: The Trial Process
Answers to Select Case Questions
1. Affirmed. An appellate court may direct the entry of judgment as a matter of law when it
determines that the evidence was erroneously admitted at trial and that the remaining evidence,
properly admitted, is insufficient to continue a submissible case. The court rejected the argument
2. Reversed and remanded. Trial courts have wide judicial discretion in partition actions to use
equity to make a fair and just division of property among the parties. Great flexibility may be
used in such cases. However, the equitable powers do not include requiring a party to buy out the
other party’s share of jointly owned property. Curtis could not be required by the court to buy the
4. The NLRB was correct. Public policy encourages mediation of labor disagreements. The
mediation process must be in confidence and not subject to re-litigation; what goes on in
6. The bank requested the court do dismiss Paranzino’s case. The court found that she “willfully
and deliberately disregarded the confidentiality agreement by exposing confidential information,
Chapter 4: The Constitution: Focus on Application to Business
Answers to Select Case Questions
3. The tax was upheld. Referring to that case in a later (1922) decision, the court said “the
discretion of Congress in the exercise of its constitutional powers to levy excise taxes could not
be controlled or limited by the courts because the latter might deem the incidence of the tax
5. The tax (actually called a milk pricing order) was unconstitutional. The law was designed to
benefit local producers of milk by creating a tariff-like barrier that was imposed on out-of-state
competitors. Although the Massachusetts dairies also paid the tax, they got their money, and
more, back. If Massachusetts wants to tax its citizens to subsidize its dairies, that may be
allowed, but it cannot finance such a scheme by taxing out-of-state competitors to pay the bill.
7. The Supreme Court struck down the city’s discriminatory treatment of publications. There
must be a “reasonable fit” between its interests in safety and esthetics and the means used to
serve those interests. Since the newsracks ordered removed were only about three percent of all
on the streets, their removal would have little impact overall on the problems supposedly caused
by newsracks. The city cannot claim that regular newspapers get differential treatment because
9. The Court of Appeals affirmed a contempt ruling against Wild and ordered him to produce the
records of his company. A corporation does not have Fifth Amendment protection against
10. The U.S. Supreme Court reversed the West Virginia Supreme Court of Appeals (where the vote
was 3-2 in favor of the coal company). The Court held that it violated due process for the judge who
Chapter 5: Criminal Law and Business
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2. Reversed. In a case of first impression on this subject, the appeals court held that legal
impossibility is not a defense to the charge of conspiracy and attempt to steal trade secrets, rather
than a charge of actual theft of trade secrets, under the EEA. So long as the defendants believed they
3. Affirmed in part, reversed in part. Jolivet’s mail fraud and conspiracy convictions stand. The
mails were used to send fraudulent documents that she prepared and signed. She received
insurance proceeds. Her participation in the conspiracy was knowing. However, the money
laundering conviction is reversed. Her act of depositing into her bank account the proceeds
5. Affirmed. Under Wyoming law (as in general), a person alleging an illegal search must show a
legitimate expectation of privacy in the searched property. In considering whether a person has
an expectation of privacy, the court considers: 1) the precautions that the person took to maintain
9. Yes, Corner is correct. The 7th Circuit noted that recent Supreme Court decisions have stated
the Sentencing Guidelines are advisory and that judges may vary from their recommendations as
long as they respect all statutory requirements. Since the sentence is particularly harsh (those
Chapter 6: Elements of Torts
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2. No. “False imprisonment is the intentional restraint or detention of another without just cause.”
Plaintiff voluntarily went to her manager’s office. No force was ever used. She did not attempt to
4. The Supreme Court of Nevada upheld a jury award of punitive damages, even though there
were no compensatory damages, for the torts of assault, battery, and intentional infliction of
6. The Florida high court held: “The tort of “invasion of privacy” includes (1) appropriation-the
unauthorized use of a person’s name or likeness to obtain some benefit; (2) intrusion-physically
or electronically intruding into one’s private quarters; (3) public disclosure of private facts-the
dissemination of truthful private information which a reasonable person would find
8. Yes, the Washington State Supreme Court said (answering a question from the 9th Circuit). The
Chapter 7: Business Torts and Product Liability
Answers to Select Case Questions
2. It is not likely the defense would be valid as the danger was to the final consumers, not to
workers in the manufacturing plant where the popcorn was made. Bulk-supplier defense does not
4. The court upheld a restraining order against Azar from contacting Lehigh customers, directly
or indirectly. This was the tort of interference with an advantageous business relationship. This
6. In several cases in different states, handgun producers have been held liable for injuries
suffered by victims of crimes in which handguns were used. The producer was liable for selling a
product they knew is often used in committing crimes, so negligence has been found. These
8. The lighter was not unreasonably dangerous under the Illinois consumer contemplation test,
which is viewed from the vantage of an ordinary consumer. The lighter is obviously dangerous,
Chapter 8: Real and Personal Property
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3. Damage to the value of plaintiffs’ property by road construction does not support an action for
inverse condemnation. There was no taking subject to compensation. Inverse condemnation
5. To state a cause of action for breach of an implied warranty of habitability, a tenant must
show: 1) entry into a lease for residential property; 2) the subsequent development of dangerous
or unsanitary conditions on the premises materially affecting the life, health, and safety of the
7. This was a tort of conversion by denying Rouse the use of his car that he had the right to use.
To hide something and then return it is conversion. The car was converted, the keys were part of
9. The Oregon high court upheld a jury award of $7,818 in compensatory damages for lost
revenues from the suspension of operations and $50,000 in punitive damages. The cause of
Chapter 9: Intellectual Property
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3. The district court dismissed the case but the appeals court reversed and remanded. Factors to
be considered in determining whether a likelihood of confusion exists between trademarks
include: 1) similarity of marks; 2) similarity of goods or services; 3) relationship between parties’
channels of trade; 4) relationship between parties’ advertising; 5) classes of prospective
5. Defendant’s motion for summary judgment granted. The treatment of ideas for a television
show is not protectable under copyright law. Copyright law does not protect ideas, but the
expression of those ideas. Elements of expression that are not protectable include general plots
7. No. “…the executives at Hormel as not amused. They worry that sales of SPAM will drop off it
is linked with ‘evil in porcine form.’ Spa’am, however, is not the boarish Beelzebub that Hormel
seems to fear. … Spa’am is a comic character who ‘seems childish rather than evil.’ … By film’s
end, ‘Spa’am is shown sailing away with other Muppets as good humor and camaraderie reign.’
Hormel also expresses concern that even comic association with an unclean ‘grotesque’ boar will
call into question the purity and high quality of its meat product. But the district court found no
8. The Supreme Court held that color alone may serve as a trademark. Qualitex could register its
green-gold color of press pads as a trademark that could then be protected from infringement.
The color has attained “secondary meaning” which means it alone identified and distinguishes
Chapter 10: Contracts
Answers to Select Case Questions
1. There was no contract. The deposit check for $25,000 was not payment for an option, it was
just a check that Polk could keep if he wished to accept the offer from Avon, but there was no
consideration to create an option contract. There was no contract at all because Avon had
2. Anglin wins. Barry claimed “there was no meeting of the minds as to the rate of compensation for
Anglin’s work because the purchase order only described Anglin’s rates as ‘mutually agreed upon.’
Anglin counters that there was an oral agreement with Barry that the rates were the prevailing ‘street
rates’ of $45.00 per hour … depending on the type of employee performing the service.” In such
3. There was no lease contract. The tenant made an offer, consistent with oral discussions, but the
offer was not accepted in writing. Since it was a contract for real estate over two years, under the
statute of frauds, the contract had to be in writing. “The tenant’s mere offer to relet the premises
for a two-year period at the rate of $1,800 per month certainly shows no contract to lease the
5. Minors ordinarily cannot be held to contracts such as this one for the purchase of a car. A
minor does not have the contractual capacity to execute such a contract, so it can be disaffirmed
and the parties returned to their original state. The car dealer could only expect to enforce the