BLAW final exam practice problems

No one school of jurisprudence is likely to seem

perfect.

____________ is the school of jurisprudence used on the philosophy that what matter is not what is written as law, but who enforces the law and by what process.

Legal realism

Sophie is an accomplished plastic surgeon who has lost her medical license due to her addiction to illegal drugs. Vanessa hires Sophie for a "filler party" in which Sophie, using a simple medical procedure designed to reduce wrinkles, injects a filler into the foreheads of Vanessa and ten of her friends. Vanessa fails to pay Sophie, and Sophie sues. What will result?

Sophie will lose because she does not have a medical license.

Susan drops by Dean's garage sale and buys a painting for $10 that both she and Dean think is a copy of a piece by Matisse, a well-known painter. Later, Susan is delighted to discover that the painting is actually an original Matisse and is worth $50,000,000. Dean hears the news and wants the painting back. Will he get it? Why or why not?

Yes, Dean is entitled to rescind. This is a mutual mistake because both parties made an important factual error.

Ever since a large manufacturing plant opened a quarter mile from Stanley's house, he has been bothered by air pollution and loud noises coming from the plant. Tired of the problems the plant is causing, Stanley goes to civil court seeking a(n) ________ which is a(n) _________ requiring the plant to stop.

injunction; court order

In a case, often both parties have __________, opposing arguments.

legitimate

Congress passes The Nylon-Free Water Act, a statute making it a crime for commercial fishermen to use nylon fishing nets in water where manatees are found. Now that the Act has passed Congress, who will create regulations for implementing it?

An administrative agency.

Curious to see its worth, Irene takes a beautiful oil painting that she inherited from her grandmother to Eleanor, a respected art appraiser. Eleanor tells Irene the artwork is a worthless piece of junk, so Irene sells the painting to Aziz at a yard sale for $50. The following week, Irene finds out that Aziz sold the painting for $12 million dollars at auction, after an appraiser at the auction house determined it is the work of a famous painter named Thomas Gainsborough. Furious, Irene sues Eleanor. What result?

Eleanor will be liable if Irene can prove that a reasonable art appraiser would recognize the painting as being valuable.

Caldwell was shopping at T-Mart department store, carrying a large purse. A security guard observed her looking at various small items for sale. At one point, Caldwell put her reading glasses in her purse, and the guard thought she might have been shoplifting. The guard approached her in the parking lot and accused her of taking store merchandise. The guard found no stolen goods in her purse but had her return to the store with him. They walked around the store for approximately 15 minutes, while the guard said six or seven times that he saw her steal something. Another store employee indicated she could go, and Caldwell later sued. What kind of suit did she file, and what should the outcome be?

False imprisonment, and she will win.

Martha sued her employer claiming she was denied a promotion because of her age. This is a criminal lawsuit.

False.

Lucas is hosting Thorben and several other dear friends at a housewarming party at his new home. During the tour of the new place, Thorben plunges through a trap door partially concealed by the living room carpet and falls 20 feet into the concrete basement below. Thorben breaks both legs and sues Lucas. Which of the following arguments will be Lucas' best defense?

He did not know about the trap door.

What general guidelines has the Supreme Court set forth for awarding punitive damages?

Punitive damages should not exceed compensatory damages by more than a factor of nine.

You and a partner in Turkey plan to open a store in Chicago selling rugs imported from Turkey. You are wise enough to insist on a contract establishing the rights and obligations of both parties and would prefer a clause requiring alternative dispute resolution (ADR) of any conflicts that arise under the contract. You want to be sensitive to your partner's culture and do not want to propose a clause that will alienate him. What is the best way you can accomplish all of this?

Research Turkish law and hire a mediator familiar with Turkish customs.

Hannah owns non-voting stock shares in Asset Management, Inc., but would like to vote at the next shareholders meeting. What tool could help Hannah gain the authority to vote in shareholder meetings?

Conversion Rights.

MegaCorp has five directors and 1,050 shares of voting stock. Jessica would like to purchase enough stock to elect herself to the board of directors. How many shares of MegaCorp stock will Jessica need to own to secure a place on the board of directors?

176 shares if MegaCorp uses cumulative voting and 526 shares if MegaCorp uses regular voting.

John sold a Vermont lakeshore lot for $115,000 to Deborah who intended to build a house on the property. John indicated the land was suitable for the project, but Deborah soon learned that a wetland protection law prevented building near the lake. Deborah sued, seeking rescission of the contract. What is the likely outcome?

Deborah will likely win restitution damages.

Harrison met Alejandro in an online chat room for people who like to talk about violent fantasies. Harrison and Alejandro spent hours each week chatting online with each other about elaborate plans to kill Harrison's wife, Melody. They chose a date to execute their plan, and Harrison bought a gun, some rope, and gloves for both of them to wear. The police learned of the plan and arrested Harrison and Alejandro the day before they planned to kill Melody. What will happen at trial?

Harrison and Alejandro will be found guilty of conspiracy.

On Monday, Billy receives an offer from Andrew to buy Billy's house for $500,000. On Tuesday, Billy mails Andrew a reply, "I'll sell it to you for $600,000, and not a penny less." On Wednesday, Billy reconsiders so he mails Andrew the following note: "I accept your offer for $500,000, the house is yours." On Thursday, Andrew receives Billy's first note. On Friday, Andrew receives Billy's second note. What result?

Billy and Andrew have a contract for $500,000.

Able orally agreed to pay Carr $800 to restore Able's antique car within 18 months, even though it was possible for him to complete the restoration in 10 months. The agreement is:

Enforceable because the work could be completed within one year.

Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed to accept the foundation if Melnick guaranteed to repair any damage that was caused by the defects in the future. Melnick agreed, but when Gintzler called Melnick two years later to repair water damage resulting from the foundation defects, Melnick refused to make any repairs. Gintzler sued, and Melnick argued that his promise to make future repairs was unsupported by consideration. Who will win the suit?

Gintzler will win because he gave consideration.

Jacobi is visiting Sheila at her apartment while she is redecorating, and Sheila asks him if he would like to buy her two sofas that she is replacing. Sheila tells Jacobi that the sofas are in great condition and are the most comfortable she has ever had. She acknowledges that some of the fabric on the sofas is slightly worn but says that is their only issue. Jacobi buys the sofas on the spot, but once they are back at his house he finds that one of them is infested with bed bugs. Jacobi has to throw out the infested sofa and pay a special exterminator to come and get rid of the insects. Jacobi sues Sheila. Assume their jurisdiction follows the majority approach. How will the court rule?

If Sheila had a reasonable belief that she was telling the truth, Jacobi can rescind the contract, but he cannot collect damages.

Ike is building a water park in Charleston, South Carolina, with attractions that are larger and more extravagant than anything in the area. Ike cannot afford delays in construction and is nervous about his contractor's ability to finish the project on time. What can Ike do protect himself?

Include a liquidated damages clause int he contract.

John contracts with FashionWare for the purchase of 1,000 zippers for $1 each. The agreement states that John will pay $500 when the contract is signed and the remaining $500 when FashionWare delivers the zippers. In the contract, John specifically states that he is buying the zippers for the manufacture of 1,000 windbreaker jackets for Campers' Crevasse, which he is contractually required to deliver to Campers' Crevasse in 30 days. FashionWare breaches the contract, causing John to miss his delivery date with Camper's Crevasse, which then cancels its contract with John. What remedies are available to John?

John can recover from FashionWare the $500 he paid for the zippers, any reliance interest, and the expectation interest from his contract with Campers' Crevasse.

Sarah and Mark formed MCS as partners years ago, which they have now dissolved and are in the process of winding up. Without Mark's knowledge, Sarah cancels MCS's insurance policy covering the MCS van. Two months later, while making a delivery for MCS, Mark runs a stop light and hits a pedestrian. Who will be liable for the damages caused by the accident?

Mark, Sarah, and MCS

The United States Department of Agriculture (USDA) inspectors received new manuals to use as guides for their inspections of meat packing facilities. Because they were pressed by Congress to get some new rules in place quickly due to quality concerns at some facilities, the USDA inserted the new guidelines in the inspector manuals through a commonly used process called "bootlegging." Based on a violation of one of these rules, a large meat packing facility has their packing line closed down temporarily. Do you believe these "bootlegged" rules are allowable?

No, because the rule-making process was bypassed.

The Resolution Trust Corp. (RTC) sued the directors of the Commonwealth Savings Corp. (CSC) seeking to recover from them personally $200 million that the bank lost in bad real estate loans. The directors approved the loans after state and federal regulatory agencies had issued reports criticizing the bank's loan practices, but the loans did not violate any laws. CSC's charter stated that the purpose of the corporation "is to engage in any lawful activity for which corporations may be organized." Under Texas law, RTC could recover for CSC directors' negligence only if their acts were ultra vires. Will RTC be able to recover from the directors?

No, because there is no indication that the board acted without authority or illegally.

Oliver found some cozy-looking winter gloves for a great price in a catalog. He decided to purchase a pair for himself and additional pairs for every member of his extended family. He mailed in the order form, along with a check. Two weeks later the catalog company informed Oliver that it had run out of gloves and would not charge him. Oliver sues. What will result?

Oliver will lose as long as the company can show it was acting in good faith.

Omkara, a furniture manufacturer, contracts with Foam Gnome for $50,000 worth of foam, which Omkara will use for making ten sofas she has agreed to make for Duke's Furniture. A day before Gnome is going to ship the foam to Omkara, a flood destroys its entire inventory. Gnome tells Omkara it cannot send her the foam in time, but tells her that FirmFoam can supply her with an identical shipment for $65,000. This increase in price will wipe out twenty percent of Omkara's profit from her contract with Duke's. Omkara wants to get out of both contracts. Can she?

Omkara's agreement with Gnome is discharged due to true impossibility. Omkara's agreement with Duke's is not discharged and she must perform.

The board of directors of Athletic Stride, a successful sneaker company, votes to have the company purchase a professional basketball team for $500 million dollars. The directors are all knowledgeable about the professional sports industry, and none of them have a conflict of interest in the deal. When the shareholders oppose the purchase as being unrelated to the company's business, the board argues that, as the team's owner, Athletic Stride will have invaluable marketing and sponsorship opportunities. Would a court likely uphold the board's decision to purchase the basketball team?

Probably yes, because courts generally will support a board decision if there is even a remotely rational business purpose and no other breaches of the managerial fiduciary duties.

Alex contracts with Rashard to purchase thirty umbrellas. Rashard ships the umbrellas to Alex, and Alex mails Rashard payment. When the umbrellas arrive, Alex is shocked to see that the fabric canopy at the top of each umbrella is made out of paper towel and is not waterproof. Alex sues, and Rashard argues that he never indicated that the umbrellas were made out of waterproof material. What result?

Rasher will lose. The parties did not agree on the exact specifications of the umbrella, but the court will imply a condition that the umbrellas be waterproof.

Richard and Michelle Kommit live in California, where gambling on credit is illegal. They travel to New Jersey, where they used their credit card to withdraw cash from an ATM conveniently located in the "pit"— the gambling area of a casino. They ran up debts of $5,500 and did not pay. The California National Bank (the issuer of the credit card) sued for the money in a California court. Who wins?

Richard and Michelle Kommit

DCAM Corp. stock is held by Rita (5 percent), Jack (50 percent), and Taran (45 percent). DCAM's board of directors has negotiated a merger with EAE, Inc. Jack and Taran support the deal, but Rita thinks it will be disastrous for the company. If DCAM is a privately held corporation, what recourse does Rita have?

Rita may object to the merger and require DCAM to buy back her stock at fair market value.

Rudolph hired Moe to walk his dog every weekday. Rudolph hands Moe a check for a month of excellent work. "Thanks!" says Moe. "This will help me pay for the silly citation I just got from the city, since I never licensed my dog walking business. They make us get licenses just to raise money for the city! What a scam." When Rudolph learns that Moe's business is unlicensed, he refuses to pay. What will result?

Rudolph owes Moe money because the licensing issue is irrelevant to their agreement.

Sabrina tells her boyfriend Alexander that if they get married, she will give him 50 percent ownership of her tech startup company. Alexander quits his job as a teacher and begins working at Sabrina's company. The two get married but divorce ten months later. Alexander claims that Sabrina owes him 50 percent of her company. Please rule.

Sabrina owes Alexander nothing because the agreement was not in writing.

Kurt owns 55 percent of the New England Lumber Company (NELC) stock and is also the CEO. Kurt also owns two percent of the Boston Homes stock. Boston Homes is a construction company that builds houses throughout New England. Kurt wants NELC to provide Boston Homes with all of the lumber Boston Homes needs and to give Boston Homes a ten percent discount on all of its large orders. Four NELC board members who have no interest in Boston Homes form a special committee and approve the deal. If a NELC shareholder challenges the deal between NELC and Boston Homes in court, how should the court rule?

Strike down the deal unless it is entirely fair to NELC.

Helena shares with her family her two goals for her senior year in college: join a synchronized swim team and shoot a bald eagle. Helena's cousin Anika is concerned about the utility of both of these goals and urges Helena to spend the year looking for a job, promising, "If, upon graduation, you have secured a job, have refrained from synchronized swimming, and have not shot any bald eagles, I will give you $10,000." Helena immediately accepts the terms of the agreement and at graduation has met all three criteria, but Anika refuses to pay. What argument will be most helpful for Anika in court?

The element of the agreement about the bald eagle is not enforceable because shooting bald eagles is illegal.

Large numbers of employees have signed mandatory arbitration agreements in employment contracts. Courts usually uphold these clauses. Which of the following is not an advantage of using arbitration in place of litigation?

The employees will lose their rights to a class action.

Fred slips on some ice on Opal's front steps and shatters both his kneecaps. Opal has a comprehensive homeowner's policy with Riskocity Insurance, but Riskocity refuses to pay for Fred's injuries as the policy does not cover accidents caused by Opal's "dangerous conduct." The Community Rules of Opal's gated community require residents to keep their front steps free of ice. Riskocity contends that because Opal violated the Community Rules, she is liable for Fred's injury. Opal argues that the insurance policy makes no mention of her Community Rules and because she could not foresee Riskocity relying on the Rules, they should not prevent her from recovering. What result?

The insurance contract was ambiguous, so the Community Rules will not prevent Opal from recovering.

Arnie owns a house in a poor section of the city. A fire breaks out, destroying the building, and causing $150,000 of damage to an adjacent store. The state charges Arnie with arson. Simultaneously, Vicki, the store owner, sues Arnie for the damage to her property. Identical evidence is presented to juries in both cases. The criminal jury acquits Arnie, while the civil jury awards Vickie $150,000. Why is this possible?

The prosecutor did not prove the criminal case beyond reasonable doubt, but Vicki proved her civil case by a preponderance of the evidence.

Jasper buys a can of Zaps bug spray. The first time Jasper sprays some on his arm, the can explodes, causing deep cuts on his face that require surgery. Jasper sues Zaps. Which of the following facts, if true, would most help Zaps' defense?

The shop that sold Jasper the bug spray had kept the bug spray in an extremely hot storage room, and the extreme temperature is what made the can explode.

Tata Consultancy of Mumbai, India, is an international computer consulting firm. It spends considerable time and effort recruiting the best personnel from India's leading technical schools and has its employees sign an initial three-year employment commitment. Desai worked for Tata, but then quit and formed a competing company, Syntel. His new company contacted Tata employees, offering a higher salary and other perks. Several Tata employees accepted Syntel's offer and did not complete their three year obligation. Tata sued Syntel. What did it claim, and what should be the result?

Tortious interference with a contract, and Tata will win.

Maybelline falls down a well and is saved when her neighbor Ruben makes a very daring rescue. Ruben hoists her to safety, and Maybelline hugs him and promises him a check for $100,000 for his kindness. Ruben is delighted and when Maybelline visits him the next day and again mentions the $100,000, he tells her that he is going to quit his job as a preschool music teacher and use the money to start a business. Two days later he resigns from the nursery school and calls Maybelline and asks when he can expect his money. He is startled when she replies that she is not going to give him a cent. Will a court enforce Maybelline's promise?

Yes, because Ruben relied on the promise.

Professional Basketball teams have been pursuing Cody, a recently graduated high school athlete, for nearly two years. Cody and his father hired an experienced agent to represent him in contract negotiations with the various teams. Unfortunately, just before meeting with the agent to review contracts, Cody's father was hospitalized in critical condition following a car accident. Despite knowing that Cody would be alone, the agent insisted that they meet and Cody decide on a team to work with. The agent convinces Cody to sign a lucrative contract with a top-rated team, but the agreement contains a non-competition clause that would keep Cody bound to that team for his entire career. The contract has a 10-day grace period for review and cancellation with no penalty. After Cody's dad recovers and returns home from the hospital two weeks later, they discuss the contract and seek to cancel it. Is it likely that Cody will be able to avoid the contract?

Yes, because the non-competition clause is oppressive.

In 1994, when the Arizona Supreme Court decided the case of Hernandez v. Arizona Board of Regents, it found a duty of care to avoid providing alcohol to underage consumers. If in 2017 a plaintiff from Flagstaff, Arizona brings a lawsuit in an Arizona state trial court against a student group at an Arizona university for providing alcohol to members under the legal drinking age, will the Hernandez v. Arizona Board of Regents case serve as precedent (assuming no court has overturned it)?

Yes, it will be used as precedent and it is binding.

The McAllisters had several serious problems with their house, including leaks in the ceiling, a buckling wall, and dampness. They repaired the buckling wall by installing I-beams to support it, but never resolved the leaks or the dampness. When they decided to sell the house, they said nothing to prospective buyers about the problems. If asked, they stated that the I-beam had been added for reinforcement. The Silvas bought the house for $60,000 and immediately began to have problems with leaks, mildew, and dampness. Are the Silvas entitled to any money damages?

Yes, the Silvas are entitled to damages for both fraud and nondisclosure.

An elementary school custodian struck a teenager who wrote graffiti on the school's wall. Is the school district liable for this employee's intentional tort?

Yes, the school district is liable if the custodian intended to serve some purpose of the school when he struck the student.

Raquel is speeding in her car through a busy town center when she veers off the road to avoid a cat and plows into a small newspaper stand. The stand flies into the air and smashes through the glass windows of a nearby yoga studio, where it startles Adam, a yoga student, and sends him flying into a set of lighted candles. As a result, Adam suffers a serious burn. Adam sues Raquel. What result?

Adam will lose because Raquel's conduct was not the proximate cause of his injury.

Pursuant to its power under the U.S. Constitution to enact laws affecting the health and safety of its residents, New Jersey lowers its highway speed limits by 10 miles per hour in hopes of reducing traffic deaths. This is an example of what aspect of our government?

Federalism.

Roy Newburn borrowed money and bought a $49,000 truck from Treadwell Ford. A few months later, the truck began having transmission problems. Newburn learned that the truck had 170,000 more miles on it than the odometer indicated. Treadwell admitted the mileage error and promised to install a new transmission for free. When Newburn came to pick up the truck with the new transmission installed by Treadwell, the company refused to turn over the truck until Newburn signed a general release of the dealership's liability for any claims based on the inaccurate mileage, which Newburn signed. One month later, the truck broke down, and the resulting delays cost Newburn so much income that he fell behind on his loan payments and lost the truck. He sued Treadwell, which defended based on the release. Is the release valid?

No, the release is not valid. This meets all of the criteria of a clear case of economic duress. Treadwell made an improper threat, forcing Newburn to enter into the contract.

Lionel is the personal assistant to the head coach of a professional football team. At the end of the football season, a football player's wife gives Lionel front row tickets to the opera. What must Lionel do?

Tell his boss about the tickets. His boss may choose to keep the tickets for himself.

For 20 years, Art's Flower Shop relied almost exclusively on advertising in the Yellow Pages to bring business to its shop in a small West Virginia town. One year, the Yellow Pages printer accidentally did not print Art's ad, and Art's suffered an enormous drop in business. Art's sued for negligence and won a judgment of $50,000 from the jury. The printing company appealed, claiming that under an exculpatory clause in the contract, the company could not be liable to Art's for more than the cost of the ad (about $910). Art's claimed that the exculpatory clause was unconscionable. Please rule.

The clause is unenforceable because it is unconscionable.

Confluence Corporation, located in Champaign, Illinois, decided to begin buying rare earth metal from the Canadian Rare Earth Company, with headquarters in Montreal, Quebec Province. The following clause was included in a signed contract between the companies to purchase quantities of the metal Lanthanum for Confluence's production of rechargeable batteries: "During the Initial Term, Seller shall sell the Products to Buyer at the purchase prices set forth on Exhibit A. All prices are in dollars with no cents. Any adjustment to prices will require written modification signed by both parties within ten (10) business days." A few weeks after signing, the Confluence Corporation attorney calls the Canadian company with a concern about the clause. What do you believe this concern may be?

The prices are in dollars.

Which of the following statements best summarizes the philosophy of legal positivism in jurisprudence?

Law is what the sovereign says.

Andy agrees to buy Charlotte's house. The purchase and sale agreement states that if the house passes an inspection, the parties are obligated to go through with the deal. The clause about the inspection is:

A condition precedent.

Deborah, a lawyer for a minor-league hockey team, is negotiating a contract between the team and its new practice stadium. The contract, now in its fourth draft, addresses all of Deborah's concerns and incorporates all of the changes she wanted. She is ready to sign the agreement, but she wants to be sure that any future conversations she has with the stadium lawyers are not considered additional provisions to the contract. What should Deborah do?

Add an integration clause to the contract.

Alais is a clothing fashion designer known for her French style of elaborate heirloom smocking combined with industrial elements. Planning for an upcoming show in Paris on September 26, she orders on September 10 300 yards of a custom reflective material from Rutherford Industries for her seamstresses to hand smock. The supplier promises to deliver the material before September 20, so Alais will have time for her staff to complete the sewing. When the cloth doesn't arrive until the evening of September 21, Alais files a claim for breach against Rutherford. Who prevails?

Alais prevails because the breach was material.

Zoom-Bot has common stock and cumulative preferred stock shareholders. The company is issuing dividends for the first time in three years. How will the dividend funds be divided by the shareholders?

All cumulative preferred shareholders will be paid for all previously unpaid dividends along with this year's and any remaining funds will go towards the payment of this year's dividend to common shareholders.

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 propane fuel upon American Bakeries' potential request, and would then sell American Bakeries all required propane fuel to run the converted trucks. American Bakeries never requested a single conversion. Empire sued for lost profits. Who wins?

American Bakeries wins because this was a requirements contract which does not require any purchase from Empire.

Two general contractor firms, Atlantic Builders and North West Mechanical, form a joint venture for the purposes of completing a large construction job. They are collaborating on all phases of the project. An Atlantic Builders' employee operating a crane accidentally drops a steal beam onto a car parked near the construction site. Who is liable for the damage to the car?

Atlantic Builders and North West Mechanical are both liable.

Mast Industries orally offered to sell certain textiles to Bazak International for $103,000. After a few days, Bazak sent a memorandum, signed by a Bazak officer, to Mast confirming the agreement, describing the goods, and specifying their quantity and the price. Mast received the memo but never responded. When Mast failed to deliver the goods, Bazak sued. Who will win?

Batak.

Jasper is indicted for larceny by the grand jury but then found not guilty at trial. Why is this possible?

Because it is relatively easy for prosecutors to obtain an indictment.

Andrew, Betty, and Charles form a partnership to produce five independent films. After they complete their third film, Charles decides that he would like to go back to school full-time, and tells Andrew and Betty that he will not produce the remaining two films with them. What will happen to the partnership?

Charles will be wrongfully dissociated, and Andrew and Betty must decide whether or not to continue the partnership without Charles.

KwikKash is a payday loan company that gives cash to borrowers for a large fee. KwikKash recently loaned Claudette $1,000 and required that she pay back $1,500 within 30 days. Claudette fails to repay the loan, and KwikKash sues. What is the most likely result?

Claudette will win because the loan violates usury laws.

In the 1980s, the Supreme Court ruled that it was legal for protesters to burn the American flag because this activity counts as free speech under the Constitution. What kind of law is this?

Common law

Russell and Rachel have designed a new type of cell phone that they believe will revolutionize the market. They would like to start a company to produce, market, and sell the phone, and they know that they will need a considerable amount of up-front capital investment to develop a prototype and later to create inventory to sell. What is the best form of business for Russell and Rachel?

Corporation

D'Arcy, who is not a public figure, brings a libel suit against Mary. At trial, D'Arcy fails to prove injury or actual malice, but he wins the suit anyway. Which of the following must be true?

D'Arcy sued Mary because she wrote an article that said he had been convicted of tax fraud, when he had not.

Pam Perez hired Daniel Construction to complete a remodeling project in her Washington, DC home. When the work was finished, Pam asked the construction foreman to do some additional tasks before they left the residence. When the foreman said that work would need to be rescheduled, Pam went on the service review website "Angie's List" and wrote the following entry: "Do not hire Daniel Construction to do any work for you. This company didn't even finish the project, and the work they did complete was terrible. In my opinion, they are also jewelry thieves, because valuable items were missing from my home, and Daniel Construction was the only one with an extra key." If Daniel Construction files a defamation lawsuit against Pam, what is the likely result?

Daniel Construction wins, because they didn't take any jewelry or valuables from Pam's home.

Sam and Elias agree in writing that Sam will give Elias needlepoint lessons once a week for five weeks in exchange for $1,000 per lesson. The contract stipulates that if either party is going to cancel a lesson, they must provide 48 hours' notice. On the morning of the second lesson, Elias calls Sam and says he cannot make it because earthquake damage has closed all roads leading out of his town. Will Elias owe Sam for the missed lesson?

Elias will not be liable if the contract contains a clause discharging the obligation if there is a force majeure provision.

Over her objections, Carlene's husband Silvio borrows $10,000 from his friend Evan so that he can achieve his dream of swimming with great white sharks in South Africa. Carlene knows Silvio has a reputation for being reckless, but she still finds it pretty alarming that Evan and Silvio's friend Constantine and Silvio's business partner Persephone each take out a life insurance policy on Silvio a month before his trip. Who can legally have an insurance policy on Silvio?

Evan, Persephone and Carlene.

Alan and Ivan opened a kosher delicatessen, Main Court, which failed after barely a year in business. One supplier sued for overdue bills. Alan and Ivan will be liable to the supplier if Main Court was which of the following types of organizations?

General Partnership

Hector is outraged by the Ellsworth Elementary School charity auction when the school invalidates his winning bid on a trip to Paris, refunds his money, and refuses to give him the plane tickets he won. He suffers no real harm because a group of sympathetic parents pool their money and buy him a comparable trip, but the breach by the school still stings, so he sues. What result is most likely?

Hector will win nominal damages.

The town of Sanford, Maine, decided to auction off a plot of land owned by the town. The town advertised that it would accept bids through the mail, up to a specified date. Arthur and Arlene mailed in a bid that turned out to be the highest of all the bids the town received. When the town refused to sell them the lot, they sued. Who will win?

It will depend on whether the auction was with or without a reserve, or minimum price.

FAB has three partners, Ramon, Janna, and Jackie, and $20,000 in assets when it begins its winding-up process. FAB owes $20,000 to a supplier, $25,000 on a bank note, and $5,000 to Jackie for a loan she gave to the partnership. FAB does not have a partnership agreement. What financial rights and obligations does Jackie have?

Jackie must pay a net amount of $5,000.

Mrs. Martin tells some neighborhood kids that she will pay $100 if any of them mows her lawn. Jake goes to a hardware store, purchases a lawnmower for $60, and then mows Mrs. Martin's lawn. Jake has entered into which types of contract?

Jake has made a unilateral contract with Mrs. Martin and a bilateral contract with the hardware store.

A national beverage company ran a promotion where consumers could collect "points" by purchasing the company's products, then redeem the accumulated points for items such as baseball caps and t-shirts. One television ad showed a teenager landing a $33.8 million-dollar aircraft in his schoolyard while "Harrier Jet: 7,000,000 points" flashed across the screen. After the commercial aired, John gathered the 7 million points and asked for a Harrier jet, yet the company refused to comply. Two days later the points for the jet had changed in the ad from 7,000,000 to 700,000,000. If John sues for the airplane, what is the probable outcome?

John loses, because no reasonable person would believe the advertisement was a serious offer.

The Ford Motor Corporation and Toyota Motor Corporation planned to join forces in 2011 to produce a hybrid truck that would meet fleet emission standards. Toyota had considerable experience at that point with hybrid vehicles, and coupled with Ford's long history of truck manufacturing, it would be a potentially productive partnership. What would be the best structure for the collaboration between these two automotive giants?

Joint Venture.

Daquan designs and manufactures ReaderWranglers, which are beaded, nylon cords that attach to reading glasses and sunglasses, to help prevent people from losing them. Daquan calls Magnus, the CEO of several assisted living facilities for senior citizens, and they agree that Magnus will buy 10,000 ReaderWranglers for $3 each and that Daquan will deliver them to Magnus at Mount Olympus Seniors (MOS) in one month. Daquan arrives at MOS on the specified date with 8,000 ReaderWranglers and Magnus refuses to accept the delivery. Daquan sues. What result?

Magnus must pay for 8,000 ReaderWranglers.

Lisa makes hand-crafted beads. Lisa approaches Julia, a successful jewelry maker, and offers to sell her beads exclusively to Julia if Julia agrees to buy all of the beads that Lisa makes. Julia agrees to buy all of the beads Lisa produces each month if, after inspecting them, Julia thinks they will sell well. Do Lisa and Julia have an enforceable contract?

No, Julia has made an illusory promise.

Mallory hires Raghav to work for one year as an assistant manager at $5,500 per month, reserving the right to cancel the contract at any time. After two months, Mallory fires Raghav because the company's order volume drops. Can Raghav recover payment for the remaining 10 months on the contract?

No, because both parties are not bound by the contract.

Mariko wants to buy one of Clare's rowboats, so the two draft a contract for its sale. The contract reads: "Binding Agreement: Mariko will buy one of Clare's small rowboats in February. Mariko will pay cash, and Clare will deliver the rowboat to Mariko." If both parties signed the agreement, will it satisfy the Statute of Frauds?

No, because it is too vague.

After going through her old clothes, Farra asks her friend Michelle if she would like to buy any of them, stating she is hoping to get at least $50. Michelle responds that she will pay $5 for each piece that she would like to buy. The next day, Michelle tells Farra that she does not want any of the clothes. Has Michelle violated the agreement with Farra?

No, because of Michelle's illusory promise, she and Farra did not have an enforceable agreement.

Damon contracts with Steve Redmont of Redmont Roofers, Inc. to replace the roof on his 1850 Greek Revival mansion in Ohio by April 15. The project involves cutting and shaping intricate trim pieces all along the roofline, as well as replacing the slate shingles and underlying wood support system. Steve begins to get frustrated on April 2 because the project is taking too long, so at about the halfway point, he calls Damon and says he won't finish the project. Damon sues Steve in court and asks specific performance. Will the court likely grant this remedy to Damon?

No, because specific performance is not an appropriate.

Data Management, Inc. is interested in acquiring DocuWorld Corp., but the DocuWorld board is not interested in selling or merging. DocuWorld's shareholders authorized blank check preferred stock in the corporate charter. Will Data Management be able to bypass the resistance of the DocuWorld board by making a tender offer to DocuWorld shareholders?

No, because the DocuWorld directors can issue the preferred stock as a poison pill.

Arabella sells Ann all of her bowling equipment for $1,100. The next day Arabella regrets the deal and tries to rescind the contract. Arabella argues that the agreement is invalid because it should have been in writing, and therefore she has to refund Ann the money, and Ann has to return the bowling equipment to Arabella. Is Arabella correct?

No, because the contract is fully executed.

Jason was a restaurant server with six years of experience who recently relocated to the Northeast. The new town he lived in had only a small number of restaurants, the busiest one being part of the chain "Hooters." Although the Hooters restaurant is known for only hiring young, attractive females as servers, Jason applies for a wait staff position, and is turned down because he is a male. Is Hooter's required to hire Jason for a server position?

No, because the position of server has a bona fide occupational qualification.

Drug Co. paid $3 billion to settle a lawsuit and pay a criminal fine after it illegally marketed 13 of its most important drugs. Shareholders filed a derivative suit against the Drug Co. board and top executives. Defendants responded with a motion to dismiss on the grounds that shareholders had not made demand on the board. Should the court grant the motion to dismiss?

No, if the shareholders can show that demand was futile.

Doreen calls Peruvian Pastimes (PP) and orders three sweaters customized with the initials of her grandchildren. A week after PP starts knitting the sweaters, Doreen sends a letter cancelling her order. PP sues. What result?

PP will win if it cannot sell the sweaters elsewhere.

Evans built a house for Sandra, 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 Sandra promised for the job, but Sandra refused to pay. Who wins?

Sandra wins because Evans did not substantially perform.

The IRS promulgates several interpretive rules about corporate tax compliance, particularly for executive compensation. The rules prove to be highly controversial and are a result of misconduct on the part of the head of the IRS. Which of the following statements is correct?

The IRS is an executive agency, and the president can fire the head of any executive agency.

Cozette hires Baldrick to cook dinner for her family three nights per week for an entire year. Nine months into the agreement, Baldrick dies of food poisoning. Baldrick's estate sues Cozette for Baldrick's salary for the rest of the year. What result?

The agreement will be discharged due to true impossibility.

Zazzles Jewelry sells Chic Boutique 150 necklaces. Zazzles sues when Chic defaults on its payments, and the court finds that some of the repayment terms in the contract are unconscionable because they place undue burdens on Chic. Zazzles is willing to make the repayment terms more favorable to Chic but wants the rest of the contract enforced. What is likely to occur?

The contract is governed by the UCC, so the court may choose to enforce the remainder of the contract.

Anna worries that her brother Nick does not have good health insurance, so she writes a contract stating that if he mows her lawn on the last Saturday of every month she will buy him an expensive insurance policy that he could not otherwise afford "for at least the next six months, and longer if necessary." The next week, Nick gets a great job at an investment bank, which provides him health insurance coverage. Anna congratulates Nick and revokes the deal. The breach of contract infuriates Nick, who sues his sister. What will result?

The court will award Nick nominal damages.

Lewis signed a contract for the rights to all timber located on Nine-Mile Mine agreeing to pay $70 per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced that Lewis lacked sufficient equipment to do the job well and forbade him from entering the land. Lewis sued. Nine-Mile moved for summary judgment. The mine offered proof that the market value of the timber was exactly $70/mbf for which Lewis had no contradicting evidence. The court granted summary judgment. Why?

The market value evidence shows that Lewis suffered no harm and, therefore, had no claim.

Tom and Harriet, adult siblings, are taking their parents on a weekend trip. They pick up their father, Luther, at his house where he is singing a goodbye song to each of his 20 plants, and eating pancakes out of his coat pocket. Next, they drive to an assisted living facility, to collect their mother, Augusta, who has lived there since a judge declared her mentally incompetent a few years ago. When they arrive at their hotel, Luther writes postcards to his plants, Augusta knits a sweater, Harriet goes for a walk, and Tom orders a glass of scotch. When Harriet returns, she learns that a hotel guest sold Tom and her parents each a souvenir snow globe for $1,000. The snow globes are for sale in the hotel gift shop for $5. Harriet is furious. Can her family members get their money back?

The sale to Augusta is void; the sales to Luther and Tom may be voidable.

Mary pledges $30,000 to a school for the blind. In reliance on Mary's promise, the school hires an architect to build a cafeteria. Two months later Mary takes back her promise. The school sues, and the judge will likely rule that __________________.

The school will be able to enforce the promise with "moral consideration"

While negotiating with Stewart to purchase his house, Yasmine asks him about the condition of the roof. "Excellent," he replies. "It is only 2 years old, and should last 25 more." In fact, Stewart knows that the roof is 26 years old and has had a series of leaks. The parties sign a sales contract for $600,000. A week before Yasmine is to pay for the house and take possession, she discovers the leaks and learns that a new roof will cost $35,000. What kind of contract exists between Yasmine and Stewart?

Voidable by Yasmine

Xavier and William are both architects. They have formed a partnership, but have not signed a partnership agreement. Xavier landed a big contract with a major real estate developer and did all the work for the project, which generated $50,000 in profits. Under the Uniform Partnership Act (UPA), how will the profits from this project be divided?

William and Xavier will each receive $25,000.

Wilma is one of five equal members of Polar, LLC. This year, Polar generates $5 million in profits. The company reinvests $4 million into the company, leaving $1 million to be divided equally among the members. How are federal income taxes paid on Polar's profits?

Wilma (and each of the members) pays taxes on their $1 million share ($5 million divided by 5) of profits.

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. Travis later complained about the quality of the work. M&M did some additional work, but Travis was still dissatisfied. He demanded his $1,900 back, but M&M refused to refund it because all of the work was "in" the car and Travis could not return it to the shop. The state of Nebraska, where this occurred, follows the majority rule on this issue. Does Travis get his money?

Yes, Travis will get his money because a minor is permitted to disaffirm a contract and get a full refund of his money, even if he is unable to make restitution.

For seven years, Stanford Owens has run a successful practice that helps small businesses file their taxes, become incorporated, and perform other legal tasks. Stanford moves his practice to NYC, and is happy to find his first local client, DiggyWerx, almost immediately. They negotiate a flat fee of $5,500 for six months of Stanford's services. A month later, Stanford is more familiar with the local business landscape and realizes that most people offering his services in NYC charge around $13,000 for six months of work because of the higher costs to do business in NYC. Is the deal between Stanford and DiggyWerx enforceable?

Yes, because Stanford and DiggyWerx each receive and incur a detriment.

Jamal worked for a delivery company, and he was driving sometimes up to 10 hours a day. One afternoon, on the way back from making a delivery in his neighborhood, Jamal stopped at the uniform shop to pick up some shirts he needed for work. Usually he would run his errands in his personal vehicle after the day ended, but the uniform shop was on the way to his next delivery anyway. As he turned into the shopping center, Jamal was not paying attention and hit a bicyclist crossing the road, seriously injuring him. Is Jamal's delivery company liable for the bicyclist's injuries?

Yes, because the stop was a mini detour from his work.

Fritz's Pet Shop has a contract with PlanetLazy Pet Products that states: a) PlanetLazy will deliver to Fritz 25 pet beds on the second Saturday of every month for one year; b) Fritz will pay PlanetLazy $2,500 on the first day of each month for one year. If Fritz does not pay PlanetLazy on a given month, is PlanetLazy still obligated to continue delivering pet beds?

Yes, because the terms are reciprocal promises.

An appraiser valued a subsidiary of Signal Co. at between $230 million and $260 million. One month later, Burmah Oil offered to buy the subsidiary at $480 million, giving Signal only three days to respond. The board of directors accepted the offer without obtaining an updated valuation of the subsidiary or determining if other companies would offer a higher price. Members of the board were sophisticated, with a great deal of experience in the oil industry. A Signal Co. shareholder sued to prevent the sale. Is the Signal board protected by the business judgment rule?

Yes, because they acted in good faith.

The Tufte family leased a 260-acre farm from the Travelers, Inc. Toward the end of the lease, Travelers mailed the Tuftes an option to renew the lease. The option arrived at the Tuftes' house on March 30 and stated that they had until April 14 to accept. On April 13, the Tuftes signed and mailed their acceptance, which Travelers received on April 19. Travelers claimed there was no lease and attempted to evict the Tuftes from the farm. May the Tuftes stay?

Yes, because under the mailbox rule, an acceptance is generally effective when mailed.

Power Wind is a corporation that specializes in designing and manufacturing windmills. Power Wind has a manufacturing plant in Colorado and offices throughout the southwestern United States. NRGreen, a provider of a variety of renewable energy design and installation services, has offered to buy Power Wind at a favorable price. However, because NRGreen's business model does not involve any manufacturing, it will close the Colorado plant immediately after acquiring Power Wind. May Power Wind's directors decline NRGreen's offer in order to keep the plant open?

Yes, if they are in a state that has codified Unocal.

Alonzo graduates with a 3.8 GPA in Accounting from a New York university and receives offers of employment from three of the Big Four accounting firms. While considering his options, a mid-sized firm in California calls and offers him twice the starting salary of his top offer. The only caveat is he needs to be in Los Angeles within the next week. Alonzo excitedly decides to take the California job. He refuses the other employment offers, breaks his lease in New York, sells or gives away most of his possessions, buys a new car, and heads for L.A. the next day. When he arrives three days later, the firm apologizes and informs Alonzo that the position is no longer available due to the loss of a major client. Based on these facts, does Alonzo have a potential claim against the accounting firm?

Yes, on the theory of promissory estoppel.

Eloise plans to build an addition on her house that she will operate as a bed and breakfast. The town rejects her plans on the grounds that she must first purchase from the town an expensive commercial building permit. Eloise argues that she is just modifying her own residence and that she owned the residence before the commercial permit legislation was passed. She argues she that, therefore, does not need the expensive permit. At the court hearing on her case, the town mayor serves as judge. This is:

a violation of procedural due process requirements.

The president has nominated Judge Mukae to be a federal judge. Before Judge Mukae can be confirmed (that is, officially appointed), she must be ______________________ as a result of our system of _____________________.

approved by the Senate; checks and balances.

Seth finds a lost dog and returns her to her owners. The overjoyed owners promise Seth $500, but never send him the money. Seth:

cannot collect the money because it was offered in response to something Seth had already done.

Congress passed the Civil Rights Act of 1964, a statute that prohibits employment discrimination based on race, color, religion, sex, or national origin. Congress also established an administrative agency, the Equal Employment Opportunity Commission (EEOC) to enforce this statute. The EEOC created guidelines that define terms such as "race/color discrimination" and "sex discrimination." These guidelines are an example of:

interpretive rules because they are clarifying an ambiguous statute.

AJ is studying in a busy student lounge when his friend arrives and tells him that she just got great tickets to a basketball game. AJ grabs his books, backpack, and cellphone and dashes to the game with her. At the game, AJ realizes that he mistakenly took someone else's phone. At first, AJ plans to return the phone, but then he realizes that it is much nicer than his so he keeps it. AJ is guilty of:

none of these crimes.

Prime Investments Corporation sues one of its executives, Stewart, for embezzling client funds. At trial, Prime calls several of Stewart's colleagues to the stand, who testify that Stewart is a bad person with no integrity and they were not surprised to hear that he was accused of stealing money. Typically opinions of this type are not admissible in court. The jury finds Stewart liable to Prime for $1 million in stolen money. If Stewart appeals, the appellate court will probably:

reverse the decision due to the trial judge's legal error.

During discovery, lawyers for the defense find out that the plaintiff was hospitalized in a psychiatric facility last April. If the court grants the defense access to the plaintiff's full medical records from that hospitalization, it is most likely because:

the plaintiff's mental condition is relevant to the case.

Poppy is delighted when she meets Sam on an online dating website. He is charming and handsome and, best of all, seems to be equally enchanted with her. The two exchange online messages and talk on the phone. Sam asks Poppy to transfer him some money so that he can travel from his home in London to visit her in Austin, Texas. Poppy sends Sam money for a plane ticket, plus additional funds to cover medical expenses so he can travel comfortably and feel his best when he meets her family. As soon as Sam receives the money, Poppy never hears from him again. Sam has committed:

wire fraud and romance fraud.

In the case of Hammer v. Breidenbach, 31 Mo. 49 (1860), Mr. Breidenbach was hired to brew beer in a cave for his employer, at a salary of $1,000 per year. The contract between the Bavarian Brewery (which would later become Anheuser-Busch) and Mr. Breidenbach specified that any violation of the agreement would result in the breaching party paying the sum of $500 to the injured party. Because the cave was dangerous, Mr. Breidenbach refused to enter it to make the beer, and his employer demanded the $500. An appellate court later determined that Mr. Breidenbach should not be required to enter the cave and endanger himself, and he was not required to pay the $500 "penalty." In which of the following modern cases could this case act as an appropriate precedent?

A case where a liquidated (pre-determined) damages payment in a contract was excessively disproportionate to the injury.

In 1995, after nearly ten months of testimony, a criminal jury acquitted celebrity football player and actor O.J. Simpson of murdering his ex-wife Nicole Brown Simpson and her friend restaurant waiter Ron Goldman. Then in 1997, a civil jury found Simpson liable for the murders, fining him $33.5 million in damages. How can these juries come to two such different verdicts on the same issue?

A criminal jury's burden of proof is "beyond a reasonable doubt" and a civil jury's burden of proof is "preponderance of the evidence."

A new British law requires British police officers to say the following when placing a suspect under arrest: "You do not have to say anything. A record will be made of anything you say, and it may be presented as evidence if you are brought to trial." What additional information does a police officer in the United States have to give suspects at the time of an arrest?

A police officer must tell the suspect that he has the right to a lawyer.

Violent Violet, the main suspect in a brutal double homicide, is arrested and brought to the police station. Once there, Violet refuses to speak to the police. A team of officers interrogates her, keeping her awake for three straight days and refusing to give her any food. Eventually, she confesses to the double homicide. At trial, the judge rules that Violet's confession is inadmissible. Why?

Because the police coerced Violet's confession.

Powers drove a truck that his employer leased from Big Trucks. After Big repeatedly failed to respond to Powers' requests to fix the strap used to close the truck's rear door, Powers replaced the strap with a nylon rope. Later, this nylon rope broke, causing Powers to fall and break his back. When Powers sued Big, what was the result?

Big is liable because it knew about the problem with the strap and did not fix it.

Eliza (female) has been working as an administrative assistant at Giant Coalmine Corp. for two years. Recently, several of her male coworkers, including some of the company's executives, have started sexually harassing Eliza by engaging in unwanted sexual advances, abusive language, and threatening behavior. Eliza has discussed this situation with her female coworkers, several of whom have experienced a similar pattern of inappropriate treatment. The women feel intimidated and worry about losing their jobs if they complain. What can Eliza and her attorney do to strengthen their case against Giant Coalmine?

File a class action lawsuit against Giant Coalmine.

After he is injured in an accident, Conrad successfully sues the driver and the trucking company. The jury awards him money for past lost earning capacity, past and future physical symptoms and discomfort, and past emotional injury and mental anguish. If Conrad's injuries require him to be out of work for much longer than anticipated, can he later file another suit against the driver and the trucking company for his unforeseen lost wages?

No, under the single recovery principle.

In a civil case, a plaintiff wins a lawsuit if he is 51 percent convincing and will collect 100 percent of his damages. In a criminal case the prosecutor must prove his case beyond a reasonable doubt. Why is there such a significant difference in the burden of proof between civil and criminal cases?

The burden is higher in a criminal case because the consequences that the defendant faces are more severe.

Marcus goes to class leaving five pounds of heroin on a table in his bedroom. Shortly after, the police knock on the door and ask Marcus' roommate Lina if they may search the apartment. Lina says yes, and the police find Marcus' drugs. If the police did not have a search warrant for the apartment, was the search permissible?

Yes, because Lina allowed the police in.

Nine-year-old Simone was out shopping with her mother in the local strip mall. While her mother was looking in a furniture store, Simone received permission to go next door to a women's clothing store. While in the store, she picked up a package of socks and moved to the front door to see if her mother was outside. The manager, thinking that Simone was shoplifting, grabbed her by the arm and placed her in an unlocked storage room, where he asked her questions for about 15 minutes. After being satisfied that Simone had not intended to steal merchandise, he continued to keep her in the unlit storeroom, alone, for nearly two additional hours, because he could not locate her mother. Has the store manager committed a tort by his actions?

Yes, because the detention was unreasonable.

Common law is also called ___________.

judge-made law.

The theory of natural law posits that:

all law must have a foundation in morality.

One day, while drawing a patient's blood, nurse Athena accidentally pricks herself with the needle that she had just used on the patient. Rebecca, another nurse at the hospital, warns Athena that the patient has Hepatitis C, a virus that can spread through a shared needle. Athena becomes visibly distraught, and Rebecca tells nurse Edwin that Athena now has Hepatitis C. In fact, Rebecca made the whole thing up. She knew the patient had no such illness and just wanted to embarrass her co-worker. Rebecca may be found liable for:

intentional infliction of emotional distress and slander.

In 2016, two-year-old Lane Graves was wading in the lagoon of an Orlando Walt Disney World resort and watching a family outdoor movie, when an alligator snatched the boy and disappeared. The resort had signs which read "no swimming, deep drop off" posted along the beach area where Lane was taken, and his parents were a few feet away when the incident occurred. Several hours later, Lane's body was discovered about 15 yards from where he was taken by the gator. A Disney employee said this was not the first time an alligator had been spotted in the lagoon beach area. If the Graves family files a lawsuit against the resort, what theory would best support their claim?

Failure to warn negligence.

Gilleo displayed a large sign on her front lawn that read, "Say No to War in the Persian Gulf, Call Congress Now." The city of Ladue fined her for violating its prohibition on signs on front lawns. Gilleo sued. The city claimed that it was regulating "time, place, and manner." Who should win?

Gilles, because the prohibition was overly broad.

Marcel is picnicking in a crowded local park. He decides he would be more comfortable naked, so he takes off all his clothes. He can enjoy only a few more bites of his lunch before he is arrested for violating city ordinances about public nudity. Marcel sues. If the court finds that Marcel's actions do not warrant First Amendment protection, it is probably because:

His nudity was not intended to convey a particularized message.

Which of the following is true of the basis of the U.S. legal system?

It is largely based on the English model with contributions from other societies.

An upscale restaurant in New York, New York paid a considerable sum for the entire harvest of ice wine from a small grower in Vermont. After receiving and testing the wine cases, the restaurant realized the grapes used to make the wine had spoiled, probably upon re-thawing, when ice crystals can disrupt the fruit. They requested to return the wine, but the grower refused to believe that there was a problem. The restaurant files a claim against the winery in federal court, citing diversity as the basis for subject matter jurisdiction. The amount in controversy is over $75,000 and both the restaurant and the grower are incorporated in Delaware. Can the federal court hear this case?

No, because the requirements for diversity jurisdiction are not met.

A new truck, manufactured by General Motors Corp. (GMC), had a defective alternator that caused it to stall on a busy highway. The driver set up emergency flares around the stalled truck, but congestion on the highway made them difficult to see. Davis did not see the flares, drove his car into the back of the stalled truck, and was killed by the impact. His widow sues GMC. GMC moved for summary judgment, alleging (1) no duty to Davis, (2) no factual causation, and (3) no foreseeable harm. Should summary judgment be granted?

No, because there was factual cause, and the injury was foreseeable.

Albert (Al) lived in a small town and worked at the single bank located there. Frustrated by the knowledge that customers rarely check their bank receipts or reconcile their accounts, Al decided to teach the folks in his town a lesson. When a customer came to the bank to withdraw some money from the bank, he would take extra funds out of their account and pocket it. He originally was planning on restoring the money to the accounts, but after gathering up several hundred dollars, Al decided to keep the money. He then starts to do this regularly and accumulates thousands of dollars from customer accounts, and he never returns any of the money. Has Al committed a crime?

Yes, the crime of embezzlement.

Aurelia has emergency major heart surgery at the best hospital in town. The next week, she goes to her doctor complaining of an acute pain in her chest. The doctor performs an x-ray and finds that there is medical sponge inside Aurelia's chest. Medical sponges are tools used during surgery and should never be left inside the patient. Because Aurelia was unconscious during the surgery, she does not know who left the sponge in her chest or how exactly it came to be placed there. Can Aurelia still win a negligence case against the hospital?

Yes, under the doctrine of res ipsa loquitur.

Lucia is very interested in buying Charlotte's apartment and has toured it several times. She pays Charlotte $5,000 to hold the offer open (that is, not to sell the apartment to anyone else) for three days, so that Lucia can think it over. The next day, Lucia's realtor, Antonio, shows her an apartment that she prefers. Lucia buys it on the spot. Charlotte sues Antonio for tortious interference with a contract. What result?

Charlotte loses because she did not have a contract with Lucia for the sale of the apartment.

Kathy Hathcoat was a teller at a bank in Pendleton, Indiana. Her branch manager, Mary Jane Cooper, caught Hathcoat stealing money from her cash drawer. Rather than reporting Hathcoat, Cooper joined in. The two helped cover for each other by verifying that their cash drawers were in balance. They took nearly $200,000 before bank officials found out. What criminal charge may the government bring against Hathcoat?

Embezzlement.

Law is _________.

Essential.

Interactive Data Corp. hired Foley as an assistant product manager, and over the next six years, Interactive steadily promoted him. Interactive officers repeatedly told Foley that he would have his job as long as his performance was adequate. They also distributed an employee handbook that specified termination guidelines that included a mandatory seven-step pre-termination procedure. Foley learned that his supervisor was under investigation by the FBI, and he told Interactive officers. Shortly thereafter, Interactive fired Foley. He sued, claiming that Interactive could fire him only for good cause after the seven-step procedure. Who wins?

Interactive loses because it had an implied employment contract with Foley that incorporated the seven steps.

Chef Jacquie is scheduled to teach a cooking class to three students. The class tuition is $1,100 per student. In the class, each student cooks a French meal under Jacquie's expert supervision and receives a cookbook (worth $30) and a cooking pan (worth $150). Tory, one of the students, tells Jacquie the day before the class that she will be unable to attend and requests a refund. Jacquie denies the refund and Tory sues. Tory claims that the UCC should govern the contract, and Jacquie argues that it should be covered by the common law. Who is right?

Jacquie, because the class is primarily a service.

This chapter is filled with examples of statutes that have been struck down by the courts. A Texas law banning flag burning was rejected by the Supreme Court, as was a Louisiana death penalty statute. Where does the Supreme Court get its power to strike down congressional statutes as unconstitutional?

Marbury v. Madison

Claudia and Patrick would like to dissolve their business partnership. They are confident that they can work collaboratively on the terms of the settlement, but they do not have much money to spend on the process and are nervous about the prospect of the terms being decided by a third party who is unfamiliar with them and their industry. Which of the following legal processes is a good choice for them?

Mediation.

Although video poker machines are outlawed in Pennsylvania, Conley placed them in bars and clubs throughout the state. He used profits from the machines to buy more machines. What crime has he committed, other than violating the law prohibiting video poker machines?

Money laundering.

In the 1950s, Illinois enacted legislation requiring trucks to have curved mud flaps. There was no federal law about mud flaps at the time, but the Illinois statute was enacted because state legislators asserted that the curved mud flaps were more effective in preventing accidents than the straight mud flaps. Several trucking companies brought suit, because the Illinois statute conflicted with the laws of other states that required straight mud flaps. Was the Illinois statute constitutional?

No because it violated the Commerce Clause.

You begin work at Everhappy Corp. at the beginning of November. On your second day at work, you wear a political button on your coat supporting your choice for governor in the upcoming election. Your boss glances at it and says, "Get that stupid thing out of this office, or you're history." You protest that his statement violates your constitutional rights. Are you right?

No, because an employer has the right to regulate how employees look at work.

Several U.S. southern states pass a law that restricts the sale of alcohol by businesses on Sunday between the hours of 6AM and midnight. A few weeks later, the federal government passes a law that says "no jurisdiction shall restrict the sale of alcohol in any manner." Would the states still be permitted to restrict sales of alcohol within their borders?

No, because federal law preempts state law.

Clark is outraged when the EPA promulgates a rule stating that lakefront buildings must be set back at least 30 feet from the water. He believes the EPA has exceeded its authority. Clark does not own lake-front property, but some of his best friends do, and he is gravely concerned about this encroachment on their individual property rights. Will Clark be able to bring an action to federal court?

No. Clark will not be able to have the administrative rule reviewed in federal court because he has not suffered direct harm.

Erica owns a waterfront home in South Carolina, and is interested to know what information South Carolina has about her property and her tax obligations. May Erica use the Freedom of Information Act (FOIA) to obtain this information?

No. FOIA may not be used to obtain information from state governments.

Taterz Potato Chip Company posted a billboard along the highway with a photo of NBA basketball superstar LeBron Smith eating their chips. Smith was furious. He did not endorse the chips, and he did not want his fans to think he ate unhealthy snacks. Smith sues Taterz. What result?

Taterz is liable for commercial exploitation.

Federal antitrust statutes are complex, but the basic goal is straightforward: to prevent a major industry from being so dominated by a small group of corporations that they destroy competition and injure consumers. Does Major League Baseball violate the antitrust laws? Many observers say that it does. A small group of owners not only dominate the industry but actually own it, controlling the entry of new owners into the game. This issue went to the United States Supreme Court in 1922. Justice Holmes ruled, perhaps surprisingly, that baseball is exempt from the antitrust laws, holding that baseball is not "trade or commerce." Suppose that a congressman dislikes this ruling and dislikes the current condition of baseball. What could he/she do?

The congressman could introduce a bill overruling the Supreme Court's interpretation of federal antitrust statutes.

While George travels for two months, Mary agrees to housesit and care for George's three horses at her stables. The parties agree that Mary will pick up the horses on the first day of George's trip, and George will pay Mary when he returns. George returns home from his travels and finds that Mary never picked up the horses. George sues. What will result?

The court will apply common law, and Mary will lose.

Andre is in 11th grade at his local public high school. He wants to take the school's ballet class as one of his required electives, but the school allows only girls to enroll in the class. Andre sues under the 14th Amendment. How will a court determine the result?

The court will apply intermediate scrutiny, and the school will have to demonstate that the rule is substantially related to an important government interest.

For the past seven years, Sommerset Storage, Inc. has hired Mountbatten Tax Associates to prepare its annual tax return. This year the parties agree to their usual $1,000 fee, but Mountbatten finds a loophole in the tax code and gets Sommerset a refund four times the usual amount. Mountbatten then requests that Sommerset pay $4,000 to reflect the increased tax refund. There is nothing in their contract about increased fees, but Mountbatten argues it would be unjust for Sommerset not to pay extra. Sommerset refuses, and Mountbatten sues. What will result?

The court will uphold the original contract, and Mountbatten will lose.

Congress has passed a new securities law. If the president disagrees with this statute, what is his/her best course of action?

The president can veto the bill.

When Sonya Celebrity reads an embarrassing article about herself in Fame magazine, she becomes very worried about damage to her reputation. During her lawsuit against Fame, the magazine's lawyer argues that his client's rights are protected by the Constitution, specifically the right to free press. Is this a civil or criminal lawsuit? On what part of the Constitution is Fame magazine's lawyer basing his argument?

This is a civil lawsuit and Fame magazine is basing its argument on the First Amendment to the Constitution.

In 1998, the United States Supreme Court ruled in a case entitled, Oncale v. Sundowner Offshore Services, Inc., that same-sex sexual harassment is illegal under federal civil rights law. Amanda works for Avali, Inc. in California. In 1999, Amanda's supervisor, Jill, repeatedly grabbed her breasts and asked for sexual favors. If Amanda decides to sue for sexual harassment, the decision in Oncale v. Sundowner Offshore Services, Inc. will be precedent.

True.

David paid $975,000 for two beachfront lots in coastal South Carolina, with the intention of building residential homes on each. Two years later, the South Carolina legislature passed the Beachfront Management Act, barring any further development of the coast, including David's lots. When David files a complaint to seek compensation for his property, South Carolina refuses, pointing to a passage in David's own complaint that states "the Beachfront Management Act [was] properly and validly designed to preserve... South Carolina's beaches..." Is South Carolina required to compensate David under the Takings Clause?

Yes, because the Beachfront Management Act renders David's property economically valueless.

The Aviation Security Improvement Act (ASIA) states that the FAA can refuse to divulge information about airport security. The family members of passengers who were killed in a terrorist bombing of an airplane over Lockerbie, Scotland, requested certain airport security information from the FAA under the Freedom of Information Act (FOIA). The FAA refused this request because it interpreted ASIA to mean that the agency had the right to withhold data in spite of FOIA. Must the courts uphold the FAA's decision?

Yes, because the courts must defer to an agency's reasonable interpretation of the law.

Bernard Hospital was in desperate need of nurses during a shortage of qualified medical personnel. Because the hospital was so short-staffed, they bypassed the optional background checks commonly required of all incoming employees, opting for only a check of references provided by the applicant. Melinda, a nurse with 20 years of experience, applied for a position at Bernard, and provided excellent references that all checked out. After Melinda was hired, it was discovered that she was injecting herself with patients' pain medications. An investigation by the hospital, after a lawsuit was filed by a patient against them, discovered that Melinda had been discharged after the same type of incident at her previous employer. Is the hospital liable for the patient's failure to receive their medication?

Yes, because the hospital was negligent in omitting the background check.

Riley, age 16, and Samuel, age 36, enter into a contract in which Riley will sell Samuel his car for $11,000. The next day, Samuel decides he no longer wants the car and tries to get out of the contract. Samuel argues that because Riley is a minor, the contract is void. If Riley wants to enforce the contract, will he be able to?

Yes, the contract is voidable, and only Riley can cancel it.

Armando is spending an autumn weekend at Maria's Bed and Breakfast in Vermont. Armando has a comfortable room on the second floor, right next to the bedroom where Maria herself sleeps every night. On the third night of Armando's stay, Maria wakes up to the smell of smoke and realizes the Bed and Breakfast may be in grave danger. She walks past Armando's bedroom door, goes down the stairs and strolls out the front door to safety. Armando does not wake up and suffers severe burns when the fire reaches his room ten minutes later. If Armando successfully sues Maria, the court most likely:

applied the duty of care exception under Tarasoff v. Regents University of California.

Marshall claims that Victor breached their contract and sues him in district court, seeking $80,000 in damages. If the trial is being held without a jury, it is most likely because:

both parties waived their right to a jury.

Josh and Colin are driving down the highway in Josh's new convertible. Josh steps on the gas and accelerates to 110 miles per hour, almost double the 60 miles per hour speed limit. Colin urges Josh to slow down, saying, "The law is the law, and you should follow it even if you think it's unfair." Josh responds, "It's unjust to have a law about how fast people can drive their own cars. Let's see how fast I can go!" In this scenario, Josh and Colin's differing legal philosophies seem to adhere most closely to:

natural law for Josh, and legal positivism for Colin.

Statutory rape is a crime in which a defendant has sexual intercourse with a person who is too young to give legal consent for the action. In a criminal case involving an alleged statutory rape, the age of the victim at the time of the offense is an issue to be determined by:

the jury in a trial court.

A state trial court held that Raynes Inc. violated its contract with Cranwell Management. Raynes appealed the decision to the state appellate court. If the appellate court remands the case, it is most likely because:

the trial court's decision made a mistake in interpreting the law.

Amy, a baker, has found her dream home, but cannot afford the down payment. Amy's brother agrees to loan her $30,000 for the down payment, and Amy agrees to pay him back in one year. Next year, Amy offers to bake her brother's wedding cake for his wedding next month instead of paying back the loan, so that she can buy new equipment for her bakery. Amy's brother agrees. How much money does Amy owe her brother?

$0 because an agreement to accept different performance in lieu of full payment of liquidated debt is binding.

Pamela was injured in an auto accident by an uninsured driver. Pamela filed a claim with her insurer, American Mutual, for $2,000 under her "uninsured motorist" coverage. American Mutual told her that if she sought that money, her premiums would go "sky high," so Pamela dropped the claim. Later, after speaking with an attorney, Pamela sued. What claim was her attorney likely to make?

A claim for punitive damages.

Clean Earth, Inc. is a Delaware benefit corporation that produces cleaning products using 100 percent recycled, organic, and sustainably produced materials. Several years ago, it became a socially conscious organization and has fulfilled all of the reporting requirements since then. Clean Earth executives have decided to purchase its paper product supplies (such as napkins and toilet paper) from a new supplier, who plants two trees for every tree it uses. Since this supplier charges five times more than Clean Earth's previous supplier, profits from Clean Earth's paper products are expected to be cut in half. If a Clean Earth shareholder challenges the decision as being unfair to shareholders, how will a court likely rule?

Against the shareholders, if it finds that Clean Earth has acted in a "responsible and sustainable manner."

When Alistair drops off his tuxedo at Whett Dry Cleaners for dry-cleaning, he signs Whett's standard exculpatory clause, which releases Whett from all liability in the event that any item of clothing is damaged, lost, or stolen while in its care. When Alistair returns to pick up his tuxedo, he is informed that the garment tore during the dry cleaning process. Alistair sues. Which of the following results is most likely?

Alistar loses because this is a valid exculpatory clause.

Franklin hires Angela to paint his portrait. She is to be paid $50,000 if the painting is acceptable "in Franklin's sole judgment." At the big unveiling, 99 of 100 attendees think that Angela has done a masterful job. Franklin disagrees. He thinks the painting makes him look like a toad. Franklin refuses to pay, and Angela sues Franklin. Who wins and why?

Angela loses because this is a personal satisfaction contract.

Malay, the CEO of Santi, Inc., interviews four lawyers to help with a potentially lucrative business deal. He provides each candidate the bare facts of the deal so they can discuss it and present their approaches. Which of the four should he hire?

Anthony, who tells Malay about the risks of that sort of deal and ways to accomplish Santi's goals safely and legally.

Ocean View Inns recently purchased 5 percent of Seaside Resorts' stock. Seaside Resorts' board of directors fears that Ocean View Inn is going to attempt to take control of the company in order to acquire Seaside Resorts' hotel in California; it is the only Seaside Resorts location that directly competes with Ocean View Inns. Although it takes a considerable amount of business away from Ocean View Inns, it accounts for only five percent of Seaside Resorts' earnings. The Seaside Resorts' board suspects that Ocean View Inns would retain the California location and sell off the rest of the Seaside Resort assets in pieces. Although the Seaside Resorts' board has a good faith belief that a takeover by Ocean View Inns is not in the shareholders' best interests, it does not believe that a majority of the shareholders will work with them to resist a takeover. What antitakeover device is the board's best option?

Asset lockup

The Uptown Mall has hired Bryce to be the mall's Santa Clause for the upcoming season. Bryce and the mall manager discussed on September 6, 2016 the terms for his employment as "Jolly Ole' St. Nick" for the December holiday seasons of 2017 and 2018. After orally agreeing to perform both holidays, Bryce realized he had a conflict for 2017, so informed the manager on September 10, 2016 that he could only be available for the 2018 season. The manager told Bryce "no problem" and found another Santa for 2017. After performing for the mall as Santa Claus in 2018, the mall refuses to pay Bryce for his services. If Bryce files a claim against the mall for the wages he earned, what is the likely outcome?

Bryce wins, because he fully performed his obligations under the contract.

Mark's state legislature passed a law that requires restaurant employees to receive four hours of first aid training that must include instruction on the Heimlich maneuver. The law also requires that employees take reasonable efforts to provide assistance to any customers who experience a health emergency at a restaurant. Mark, a restaurant server, received the required training but did nothing to help a customer who choked on his food at Mark's restaurant. When Mark is charged with violating the statute, he argues that he did not believe that choking qualified as a health emergency. How will the court interpreting the meaning of "health emergency" in this statute?

By using the plain meaning rule because "health emergency" has an ordinary meaning to the general population.

Desmond has been a fan of Crispin's paintings for years and is thrilled when the artist promises to give him painting lessons. The two agree that Crispin will provide Desmond with five weekly lessons for $1,000 each, payable once the lessons are complete. After teaching Desmond two lessons, Crispin dies of a heart attack. Crispin's estate sues Desmond for the $5,000 payment for the art lessons. What result?

Crispin's estate will be able to recover $2,000 in restitution.

Lauren verbally agrees to sell Dante 500 Bietigheimer apple trees, which are currently too small to be transported. Lauren and Dante agree that Lauren will have the trees delivered when they reach maturity in 18 months, and Dante will pay in full when he receives them. Dante then buys a 10 acre parcel of land that has soil suitable for Bietigheimer apple trees, and he pays a farmer to clear the land and begin preparing it for the arrival of the apple trees next year. Lauren then calls Dante and tells him that she is selling the trees to someone who offered her more money. Dante sues. What result?

Dante will win under promissory estoppel.

Tim's Lumber Co. agrees to provide Deckbuilders, Inc. with all of the wood that Deckbuilders requires for the next five years. Deckbuilders agrees not to buy wood from any other vendors. What is the primary restriction on how much wood Deckbuilders may demand?

Deck builders' demand for wood must be made in good faith.

George and Susan open a dry-cleaning business together, but do not execute any documents or perform any formalities other than obtaining a "d/b/a" certificate for their business name: "G & S Clean." One day, when George is out for lunch, Susan burns a large hole in a customer's fur coat while cleaning it. Who is liable for the cost of the coat?

G & S Clean is liable, and both Susan and George are personally liable.

George is president of Plumbers, Inc. He signs a contract with Susan, which calls for Susan to perform some services and receive $10,000. Susan performs, but Plumbers does not pay. Which of the following, if true, will grant Susan the right to recover from George personally?

George commingled personal assets with corporate assets.

Terrance, a recent college graduate, moves to New York City to open the second branch of his mother's business. He plans to work from his apartment full-time. The landlord of the apartment that Terrance applies for is not convinced that Terrance will be able to afford the rent. So Terrance's mother Gloria (who is extremely rich) speaks with the landlord and tells the landlord that if Terrance fails to pay his rent, Gloria will pay it for him. When Terrance fails to pay his rent, the landlord requests the money from Gloria, who refuses. What result?

Gloria will not be responsible for Terrance's debt unless the landlord can prove that Gloria made the promise out of self-interest.

When Griffiths sold his house to Hippen, Griffiths orally agreed to buy the house back at the selling price if Hippen should happen to move within the next three years. Two years later, Hippen was transferred to Miami and tried to sell the house back to Griffiths, but Griffiths refused. Hippen sued for breach of contract, but Griffiths claimed there was never an enforceable contract. Who wins?

Griffiths wins. The purchase - or repurchase - of a house is a classic interest in land, and any such promise must be written to be enforceable.

Iggy verbally agreed to sell frozen hotdogs to Hachiro. He sent a signed memorandum to Hachiro, which read, "Pursuant to our conversation, this is to confirm your order of 100,000 frozen hotdogs for $0.15 each, which you will pick up at my manufacturing plant on November 1 of this year." Upon receiving the memorandum, Hachiro called Iggy and told him the deal was off. On November 1, Hachiro did not collect any hotdogs. If Iggy sues what will be the result?

Hachiro is bound by the memorandum because he never objected to it in writing.

Harlowe purchases a watercolor painting by a prominent local artist and a RecumbentSloth brand recliner from a yard sale. She pays cash for both items, and the seller promises to deliver them next week. Two days later the seller calls Harlowe and says he no longer wants to sell the items and sends Harlowe back her money. If Harlowe sues, will she be able to get the items she bought?

Harlow will be able to get the painting but not the chair.

Heather and her employee Emilio believe they see Ethel, a customer of Heather's clothing boutique, shoplift some mittens. Heather tells Emilio, "Lock her in the back room, and don't let her out until you figure out what's going on. I have a flight to catch." Heather leaves for the airport. Emilio questions Ethel in a back office for three hours, but is unable to determine what happened with the mittens. When Ethel is finally released, she sues for the tort of false imprisonment. Assuming that Emilio's acts constitute false imprisonment, is Heather liable for the indemnification of Emilio?

Heather is liable for the indemnification of Emilio if Emilio did not realize he was committing a tort.

CeCe Hylton and Edward Meztista, partners in a small advertising firm, agreed to terminate the business and split its 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 and asked to see the books. Meztista did not permit Hylton to see any records and refused to answer her phone calls. Instead, he gave her a check in the amount of $17,617.83, on which he wrote "Final payment/payment in full." Hylton cashed the check, but she wrote on it, "Under protest—cashing this check does not constitute my acceptance of this amount as payment in full." Hylton then filed suit, demanding additional monies. Meztista defended on the grounds that the parties had made an accord and satisfaction. What is the likely result?

Hilton's debt is discharged because there has been an accord and satisfaction.

You are considering joining an online club. Before continuing to the membership page, the site presents you with hundreds of lines of dense legalistic text and asks you to agree to them. You click the "I agree" box. Will you be bound by the terms?

It depends on what state you are in.

Dolly has a baseball bat and a great deal of anger towards Peter. Which of the following is true:

It is possible for Dolly to batter Peter without assaulting him, and it is possible for Dolly to assault Peter without battering him.

In 1997, the Supreme Court declared unconstitutional a provision of a federal gun control law that required state and local governments to conduct a background check on prospective gun purchasers. Under what legal authority did the Supreme Court have the right to declare the provision unconstitutional?

Judicial power.

Krug International contracted with Iraqi Airways to build equipment for training pilots. Krug then contracted for Power Engineering to build the specialized gearbox to be used in the training equipment for $150,000. Power did not know that Krug planned to resell the gearbox to Iraqi Airways. When Power had almost completed the gearbox, the Gulf War broke out and the United Nations declared an embargo on all shipments to Iraq. Krug notified Power that it no longer wanted the gearbox. Power sued. Please rule.

Krug wins because of true impossibility.

Pro Threads, Inc., an international designer clothing manufacturer, is acquiring by merger D-Satisfaction, a small manufacturer that specializes in fitted dresses. Dresses of this type account for one half of one percent of Pro Threads' sales. Do Pro Threads and D-Satisfaction shareholders need to approve the merger?

Only D-Satisfaction shareholders need to approve the merger.

Lorna and Igor make a verbal agreement that Lorna will buy a house Igor owns. They agree on the price and a closing date in sixty days. Before closing, Lorna moves into the house with her mother, remodels one of the bathrooms, and paints the kitchen. A week later Igor tells Lorna he does not want to go through with the deal. May Lorna force Igor to sell her the house?

Lorna cannot enforce the deal because her actions were not sufficient to be considered part performance.

Harris walked onto some train tracks, ignoring a yellow warning line painted on the station platform, shouts from concerned onlookers, and the ringing bells and flashing lights signaling the approach of an express train. The train killed Harris, and his widow sued the railroad arguing that its negligence caused her husband's death. Will she win?

No, Harris' own actions were the factual cause of harm. The train station provided safety measures that a reasonable person would pay attention to that Harris ignored.

Irving was a notary public who prepared income tax returns for Mark. Irving agreed to draft a will for Mark, leaving all of the property to Mark's sister, Sonja. When Mark died, the court refused to uphold the will because it was improperly drafted. As a result, Sonja inherits only one eighth of the estate, and Sonja sued Irving. Irving defended on the grounds that he had no duty of due care to Sonja because he only had dealings with Mark. Is Irving right?

No, Irving has a duty of care because it was foreseeable that the failure to properly draft the will would cause injury to Sonja.

While staying overnight at Lily's house, Martin indicates that he would like to buy her car. Lily says she'll think it over. The next day Martin finds a note on the kitchen counter from Lily that reads, "I might be able to sell the car for about $22,000." Martin writes her a check for $22,000, takes the car keys off the hook by the front door and drives off in the car. Have Lily and Martin formed a binding contract?

No, Lily's note was an invitation to bargain, not an offer.

Thirty-five members of the Ortiz extended family were spread across three states—Illinois, New York and Florida—and they rarely were able to get everyone together. For Thanksgiving 2018, Mary Elizabeth Ortiz decided to surprise her family by booking a mountain retreat for the entire clan. She especially wanted to celebrate her uncle's return from overseas military service. On September 15, 2018, Mary rented a spectacular lodge in the Tennessee Smoky Mountains with over 20 bedrooms and an incredible view, paying in advance the full $2,500 per night fee for 3 evenings, but not purchasing travel insurance. The lodge had the following cancellation policy: "A sixty (60) day notice is required for cancellation. Cancellations that are made within 60 days of the arrival date, for any reason, forfeit the full advance payment and reservation deposit. You are advised to purchase travel insurance separately if cancellation costs are a concern." The rental contract also stated that the only exception would be for "acts of God, such as fires or earthquakes." One week before Thanksgiving, Mary's uncle had a heart attack and was hospitalized. The next day, November 16, 2018, Mary cancelled the reservation, and requested a full refund, which the lodge refused to provide. Does Mary have a claim for the return of her $7,500?

No, Mary has no theory that supports her claim.

TuffGrip ran an advertisement for its brake pads in several national automotive industry journals. The ad listed a range of prices for the brake pads and a few technical specifications. At the bottom, the ad stated that TuffGrip had no liability in the event of a malfunction. Three large mechanic chains purchased the brake pads after seeing the ad, and signed standard TuffGrip purchase orders. Many of the brake pads that these mechanic chains installed in customers' cars failed, causing severe injuries to drivers who could not stop their cars. TuffGrip claimed it had no liability to the mechanic chains. Is TuffGrip correct?

No, TuffGrip is liable unless the purchase orders also included the limitation of liability.

Rothman's clothing store had a 20-year lease in a shopping center in Phoenix, Arizona owned by Foundation Development. In addition to monthly rent, Rothman's was obligated to pay common-area charges four times a year. The lease stated that if Rothman's failed to pay on time, Foundation could send a notice of default. Then if the store failed to pay all money due within 10 days, Foundation could evict. On February 23, Foundation sent to Rothman's the common-area charges for that quarter. Rothman's believed the bill was in error and sent an inquiry on March 18. On April 10, Foundation insisted on payment of the full amount within 10 days, but it sent the letter to Rothman's Phoenix office, which was not responsible for paying the bill. The Phoenix office forwarded the bill to the relevant executive in New York, who received it on April 20. Rothman's issued a check for the full amount on April 24 and mailed it the following day. On April 28, Foundation sued to evict. On April 29, the company received Rothman's check. Will Foundation be able to evict Rothman's?

No, based upon the "good faith" requirement.

On August 15, Calvin offers to sell Clarissa his laptop for $500 cash. He tells Clarissa she can only accept the offer by mailing the money to arrive by September 2 at his university mailbox. Clarissa mails a check for $500 to Calvin, and the money arrives in the mailbox by August 30th, although Calvin doesn't retrieve his mail (along with Clarissa's payment) until September 4th. Did Clarissa accept Calvin's offer?

No, because Clarissa didn't meet all the requirements of the offer.

Carly is a director at Dazzle, a corporation that operates a chain of stores that sell fancy shoes and handbags. Zeb approaches Carly about partnering with him in his new business selling leather handbags with large buckles and other metal accents. Carly brings Zeb's offer to the Dazzle board of directors and shareholders, but they turn it down because Zeb's bags are too casual and do not fit in with the rest of their stores' merchandise. Carly loves Zeb's bags, though, so she decides to personally invest with him. Has Carly violated her fiduciary duty to Dazzle?

No, because Dazzle turned down the opportunity to work with Zeb.

George is a majority shareholder in Soda Pop, Inc., a large soft drink maker. Citizens in India are threatening to sue Soda Pop for stealing water in rural villages, ruining crops, and depriving livestock of water. If they are successful in their suit, will George be liable to the Indian plaintiffs?

No, because George has no right to control Soda Pop operations.

Kramer hired an attorney on March 1 to incorporate his start-up website development company. He began operating as president the corporation "WebVisions", and strictly adhered to all formalities associated with the corporate form. One of the actions Kramer took was to sign a contract with IBM for the purchase of a dozen computers for his programmers to use. For six months, WebVisions carried on business of the corporation as usual, and made monthly payments to IBM on the computer systems. Kramer then discovered that the attorney he hired had only just filed the incorporation document on September 15. When IBM discovered the oversight, they filed a claim against Kramer for the $28,678 remaining on the computer purchase contract. Is Kramer personally liable for the balance?

No, because Kramer and IBM treated WebVisions like a legitimate corporation.

Oceanview Enterprises offers scenic cruises to exotic destinations in the South Pacific, such as Tahiti and the Marshall Islands. In December of each year, the cruise line provides customers an opportunity to enter a lottery for a limited number of exclusive tickets sailing to a "hidden" unnamed island. Malik is fortunate enough to win the right to buy two of the expensive cruise tickets for herself and best friend Jecala. When she receives the purchased tickets through the mail, Malik notices the back of each has the following statement: "The purchaser and/or passenger of this ticket agrees that any claim against Oceanview Enterprises or its employees will only be resolved in courts of Oceanview's home state of Alaska. This ticket is non-refundable." Is it likely the clause on the ticket would be enforceable against Malik?

No, because Malik did not have notice of the clause before the ticket purchase.

Wayne borrows money from Phyllis, who in good faith represents herself as an agent for Retail Lender, Inc. Wayne learns that Retail was never incorporated due to a significant error in Phyllis' incorporation paperwork. If Phyllis sues to recover the loan amount, can Wayne avoid liability based on the fact that Retail does not exist?

No, because Retail is a corporation by estoppel.

Rosa and Happy Movers sign a contract that states Rosa will pay Happy Movers $100 per hour to move all of her furniture to her new house on September 1. The contract also states that any modifications to the agreement must be "made in writing signed by the party to be charged with the amendment." The day of the move, a Happy Movers representative shows Rosa a flyer for a promotion offering to complete a move in under two hours for an extra $300, and Rosa agrees orally to the deal. The Happy Movers representative signs his name on the flyer, and staples the flyer to the contract. If Happy Movers finishes moving Rosa's furniture in less than two hours, is Rosa contractually required to pay the extra $300?

No, because Rosa did not sign the flyer.

Sports Destination is a sporting goods store owned by four partners: Jerry, Kevin, Lisa, and Marcy. They have a partnership agreement, but it does not state anything about voting rights. Gear Head, a competing sporting goods store, has made an offer to merge with Sports Destination. Jerry, Lisa, and Marcy vote in favor of accepting Gear Head's offer, but Kevin does not. Has the merger been approved by Sports Destination?

No, because a merger requires unanimous approval from the partners.

For his 17th birthday, Asher bought himself a used car from a car dealer for $10,000. The dealer purchased it for $6,000, repaired it, and then sold it to Asher. Eighteen months later, Asher has almost finished paying off the car when he totals it by accidentally driving it into his neighbor's swimming pool. Asher's mother is a lawyer and tells him to rescind the contract. Will Asher be able to recover any money from the dealer?

No, because he ratified the contract.

Guyan Machinery, a North Carolina 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 North Carolina for a two-year period. Later, Voorhees left Guyan and began working at Polydeck Corp., another North Carolina manufacturer. The only product Polydeck made was urethane screens, which comprised half of 1 percent of Guyan's business. Is Guyan entitled to enforce its noncompete clause?

No, because it is not essential to the employer.

Yvonne promises to sell 500 pounds of rice to Zed at market price. To secure Zed's rice, Yvonne enters into a contract with McKinley Venturesto to ship the cargo. The contract stipulates that McKinley will deliver the rice to Yvonne within 48 hours. However, the rice does not arrive for 5 days, during which time the market price of rice decreases 11 percent. Because of the delay, Yvonne lost considerable profit. Can Yvonne recover her damages because of McKinley's breach?

No, because it was not foreseeable to McKinley that the shipping delay would cost Yvonne so much money.

Mina, a real estate developer, reads that the tiny town of Lakeview is considering building a large shopping center and adding public transportation from the nearby city to Lakeview. Mina knows that these types of changes would greatly increase the demand for real estate in Lakeview. She buys 10 acres of land in Lakeview from Arlen, so that she can build houses and take advantage of the town's economic boom. There is no reference in the purchase and sale agreement or deed to the possible development in Lakeview. A few weeks later, the town declares that, due to changes in zoning laws, it is not building the shopping center or adding the public transportation. Can Mina rescind on her contract with Arlen?

No, because she understood the risk she was assuming.

Eighteen-year-old Alisha was driving through her neighborhood one afternoon and recognized six-year-old Timmy, a member of the Caldwell family, who lived a block away from her house. Alisha used to babysit for Timmy on weekday afternoons until a few months ago, when she started working at a local grocery store. From her car, Alisha could see Timmy was flailing around in the water next to the dock of Maverick Pond, the neighborhood's favorite fishing spot. Alisha knew that the there was a big drop off there where the water was very deep, well over Timmy's head. Because she was late for work, she decided to keep driving, thinking that Timmy's parents must be close by. She feels terrible later when she discovers that Timmy is hospitalized in critical condition after nearly drowning in the pond. Did Alisha have a legal obligation to come to Timmy's aid?

No, because she wasn't babysitting Timmy that day.

Silas has agreed to dig five wells on Noreen's property over the next month, working each weekday. One Friday, after Silas has completed three wells for Noreen, he informs Noreen that on Monday he is going to start a project digging sixty wells for Romeo and that job will take him about a year. What does this mean for Noreen?

Silas has committed an anticipatory breach. Noreen is discharged and may immediately hire someone else to dig the wells. She may also sue Silas for breach of contract.

Zack, Gavin and Breana were college friends who decided to go into business together as a party equipment rental service. The three budding entrepreneurs formed as equal owners a Limited Liability Company (LLC) named "Parties R Us." The written operating agreement gave only Zack the authority to manage the business, hire and fire employees, and purchase equipment. Zach contributed to the LLC his knowledge in the party business (his family had owned a similar company), and Gavin and Breana each contributed $100,000 capital. Over the next year, Zack ran the business, but he did not consult with Gavin and Breana, and no meetings were held. When Gavin and Breana asked what was going on with the company, Zach said he was too busy to talk about it. At the end of the first year, despite Zach's best efforts, the LLC's cash was depleted and its liabilities significantly exceeded its assets. To make matters worse, a defective Parties R Us tent had collapsed onto a wedding group, causing serious injuries. One of the wedding guests, Margaret, sued the LLC and received a $500,000 judgement against them. Because the LLC cannot pay Margaret, is it likely that Zack, Gavin, and Breana will be held personally liable for the judgment?

No, because the LLC was an entity independent from its owners.

Arthur met Rottweiler breeders Lynda and George at a dog show in Rhode Island. The couple, who reside in New York State, later sold several Rottweiler dogs to Arthur who lived in Rhode Island. Arthur later sued Lynda and George, claiming that the dogs were sick and infirm. He filed a complaint in Rhode Island courts, claiming that even though the dogs were sold in New York, the breeders had attended the dog show and advertised in the Rottweiler Newsletter which was distributed at the event in Rhode Island. Based on the facts, do you think Rhode Island courts have personal jurisdiction in this case?

No, because the breeders had insufficient minimal contacts with Rhode Island.

Frank, the CFO of Springer, Inc., concealed temporary financial losses the company suffered early in the fiscal year in Springer's annual report submitted to the Securities and Exchange Commission (SEC). It is illegal to submit fraudulent SEC filings, but Springer's financial situation had already improved greatly by the time the annual report was filed and Frank did not want to unnecessarily alarm shareholders. When news that Springer submitted fraudulent financials to the SEC broke, the company's stock price dropped by 15 percent and shareholders sued Frank under applicable securities laws. Frank defended on the basis that his actions were protected by the business judgment rule because he was acting in the company's best interests. Was Frank correct?

No, because the business judgement rule does not protect illegal activities.

Ted and Aisha enter into a contract that states that Aisha will buy Ted's vintage sports car after Ted replaces the engine and fixes the transmission. The contract contains a "time is of the essence" clause, requiring Ted to have the car ready for the sale by February 13. On February 12, Ted calls Aisha and says he needs two more days to complete the repairs. Aisha declines and buys another car. Did Aisha breach the contract?

No, because the contract contained a "time is of the essence" clause.

The highest court in Montana must decide a complicated case about the custody of a child conceived by using an egg donor and a surrogate who was raised by an unmarried, homosexual couple. The highest court in Montana has never heard a case like this before, but there is relevant case law in a family court in Montana. Is the highest court bound by the Montana family court's earlier decision?

No, because the decision was made in a lower court.

Marley owns 10% of the common stock in Hometown Industries, Inc., and Cecil and Jonathan each own 45%. Both Cecil and Jonathan sit on Hometown's Board of Directors (BOD) and are paid officers, while Marley is only a shareholder with no other role in the company. Both Cecil and Jonathan receive salaries that are on par with the industry. Hometown has not paid dividends to shareholders in a number of years, despite the company's financial success. When Marley questions the lack of distributions, Cecil points out that any profits have been reinvested in the company. Jonathan shows Marley how the use of company profits has improved and strengthened the business, resulting in its current success. Both directors tell Marley that if this trend continues, the company should begin paying dividends after a few additional quarters. Marley is not satisfied with Cecil's and Jonathan's responses, and seeks to bring a suit to force the payment of a dividend. Is it likely that Marley will be successful in his claim?

No, because the directors are operating in good faith.

Just before turning 18 years old, Caitlynn goes to the local Driver Examination Office to test for her driving license. When she passes with a perfect score, her parents allow her to go alone to the local car dealership and purchase her first car. She signs a contract to buy a used lemon-yellow Volkswagen Beetle with payments of $225 per month for 3 years. Unbeknownst to Caitlynn and her parents, the car was a trade-in, and the dealer was still waiting to receive the title. Caitlynn drives the car until six months after she turns 18, making the payments each month, but then decides she hates the yellow color, and returns it to the dealer. The dealer refuses to take the car back. Is Caitlynn obligated to the car purchase contract?

No, because the original contract was void.

The Fellowship is a not-for-profit corporation whose primary purpose is promoting goodwill among churches and synagogues. Its annual meeting featured various vendors with display booths. Keener, a church representative, approached the booth of Chris's Cars and Trucks (CCT) about buying a bus for his church. While Keener was test-driving one of CCT's buses, the brakes malfunctioned, and Keener was killed in the resulting crash. If CCT is liable for the accident, could The Fellowship also be liable as CCT's principal?

No, because there was no control or consent between CCT and The Fellowship.

Simon, aged 10, is invited to a classmate's birthday party at an exclusive ski resort on March 15th. The day will include 4 hours of snowboarding, lunch and birthday cake. Simon's mother checks a box on the invitation that says "YES, we will attend" and returns it to the classmate's address. Unfortunately, they later don't attend the party when Simon comes down with the flu. On March 17th, Simon's mother receives an invoice in the mail from Simon's classmate for $35 that says, "Party No-Show Fee." Can Simon's classmate collect the fee?

No, because there was no intent to form a contract by Simon's mother.

Ramon and Martin sign a written agreement stating that they will co-manage a hardware store together. Martin agrees to provide 75 percent of the start-up capital for the store and cover 75 percent of any losses suffered during the first year. Ramon is entitled to all of the profits. Ramon manages and operates the store while Martin handles the book-keeping and other administrative functions. Will a court find that Ramon and Martin formed a partnership?

No, because they do not share profits.

Jasmine and Joanna run a bakery as partners. Joanna's sister asks her to provide all of the desserts for her company's annual New Year's party, and Joanna agrees. Joanna's desserts are such a hit with the partygoers that the company sends Joanna a check for $500. Joanna would have provided the food for free, but happily accepts the check. When Joanna tells Jasmine about the party and the check, Jasmine insists that Joanna must give her half of the money. Is Jasmine correct?

No, but Joanna must turn the earnings over to the bakery.

Romanita is offered $500 to climb to the top of the academic center, the tallest building on the university campus. Before climbing the 80 foot tower, Romanita purchased ropes, boots and a safety harness, as well as other equipment, at a cost of close to $150. After two weeks of preparation and encouragement by the offeror, Romanita arrives at the tower. However, just before her feet leave the ground on her ascent up the tower, the offeror withdrew the offer, citing safety concerns. Does Romanita have a claim for the $500?

No, but she has a potential claim for the cost of the climbing equipment.

You are a vice-president in charge of personnel at a large manufacturing company. In-house detectives inform you that Gates, an employee, was seen stealing valuable computer equipment. Gates denies the theft, but you believe the detectives and fire him. The detectives suggest that you post notices around the company informing all employees what happened to Gates and why. This will discourage others from stealing. Should you post the notices?

No, posting the sign could give rise to a claim of defamation.

To protect Native Americans, the Federal government passes a law prohibiting their taxation. Oklahoma amends its own tax law, adding a small tax on Native Americans. Is the Oklahoma law constitutional?

No, the statute violates the Supremacy Clause.

Wanda, Derek, and Mitchell formed B. Flowers, LLP three years ago. A year ago, Derek and Mitchell decided that the company was ready to open a new location and had B. Flowers take out a loan from a bank for the extra capital needed to expand. The new location has not performed well, and B. Flowers is unable to pay the remaining $50,000 owed to the bank. Is Wanda liable to the bank for the debt?

No, unless the partners have not complied with the LLP statutory filing requirements.

Marcus owns common stock in XO, an oil and energy company that is about to be liquidated. Is Marcus guaranteed to be paid in the process of dissolution?

No, unless there are assets remaining after all creditors and preferred stockholders are paid.

The German-American Vocational League was formed in New York during World War II to serve as a propaganda agency for Nazi Germany. Under U.S. law, all foreign agents were required to register, but neither the Vocational League nor its officers did so. When they were charged with violating U.S. law, they argued that they were not agents of the German government because they had no formal agency agreement. Is this a strong argument?

No. A formal contract is not necessary to establish an agency relationship.

Malik asks Petra, an expert in sports collectibles, to help him find a buyer for his collection of autographed baseballs. Petra finds a buyer who is willing to pay $5,000 for the collection, but Malik scoffs at the offer and insists it is worth at least double that amount. He says he would not even consider selling for less than $7,500. The next week, someone offers to pay $1,000 for the collection. Must Petra tell Malik about the offer?

No. If Petra has no reason to believe that Malik would be interested, she does not have to pass the offer on to him.

Jackie offers to sell Mel a concert ticket for $50, and Mel replies, "I'll give you $40." Jackie refuses to sell at the lower price, and Mel says, "OK, OK, I'll pay you $50." Has a contract been formed? At what price?

No. Mel made a counteroffer, which Jackie rejected.

Louise Latour, a successful interior designer, won a contract to design the interiors of Greentree Broadcasting's corporate headquarters. A few weeks after signing the agreement, Greentree receives a much cheaper bid from another designer and decides to get out of the contract. A Greentree lawyer notices that the top of the contract contains an embarrassing typographical error: It states that the agreement is between "Louise Latour and Grantree Broadcasting." Will Greentree be able to use this mistake to get out of the contract?

No. There is clear and convincing evidence that the mistake does not reflect the intent of the parties, and the court will reform the contract.

Florian, a busy surgeon, reads about a new state-of-the-art surgical mask developed by Myriad Medical Devices (M.M.D.) and thinks it would be useful for his practice. Florian enters into a contract with M.M.D. in which M.M.D. agrees to sell the doctor all the masks he needs in the next six months. Shortly thereafter, a fire burns down Florian's practice, and he will be unable to see patients for at least 9 months. Florian will not need a single mask until the practice is back up and running. If M.M.D. sues Florian for breach of contract when Florian does not order any masks, will M.M.D. win?

No. This is a requirements contract, and Florian acted in good faith.

Wanda, a realtor, owns stock in Mackey Land, a publicly traded real estate development company. To market her own realty business, Wanda demands that Mackey Land provide her the list of Mackey Land shareholders. Is Wanda entitled to this information?

No. This is not a proper purpose to access company information.

Norv and Wanda agree verbally that Wanda will buy Norv's house, and that Norv will also sell her his living room furniture for $1,000. They agree on a total price, and that the deal will close in 30 days. Norv prepares his house for Wanda, taking out all his possessions, and leaving the living room furniture. Two weeks later, Wanda tells Norv she does not want to go through with the deal. Can Norv enforce his agreement with Wanda?

Nor cannot enforce the deal because it was not in writing.

Olivia agrees that she will bring Desiree a cherry pie every Monday for one month in exchange for $15 per week. Olivia delivers a pie to Desiree for four weeks, and Desiree pays her each time. Olivia continues to deliver Desiree pies every Monday, and Desiree continues to pay for another five weeks. On the tenth week, Olivia brings a pie and Desiree refuses to pay. Olivia sues for payment. What will result?

Olivia will win. The court will rule that they had an implied contract.

Surgeons Dr. Martin and Dr. Kellogg are partners who decided to form a professional corporation together. After the business was established, the doctors went out to celebrate the new enterprise with some colleagues. Unbeknownst to Dr. Martin, Dr. Kellogg, who was on call that day, had to leave the party to perform emergency surgery on an accident victim. Unfortunately, Dr. Kellogg had too much alcohol at the dinner and was drunk during the procedure. As a result of his intoxication, Dr. Kellogg accidently cut a major artery in the patient's abdomen, and the individual bled to death on the operating table. A jury in the malpractice suit that followed awarded a $5 million judgment against Dr. Kellogg and the corporation. Insurance covered $1 million of the damages. Who would be responsible for the remaining $4 million?

Only Dr. Kellogg would be liable for the $4 million.

Molly and Corbin met while both studying horticulture in college, then after graduating decided to start a landscaping business together. Their partnership—"Green Fields"—started operating and hired a landscape architect and an employee to provide labor for projects. Everything went well for about four months, until the employee negligently failed to mark a deep hole in a client's yard. The client's 4-year-old daughter fell into the opening and was severely injured. The client sued Green Fields and was granted a judgment of $250,000, which has not been paid. After the judgment was entered, Molly and Corbin transitioned the partnership into a Limited Liability Partnership (LLP). They are operating the business now as Green Fields LLP. To help with continuing costs, Molly and Corbin take on an investor-Partner, who contributes $50,000 to Green Fields LLP. Are Green Fields LLP and the new partner liable for the judgment against the original Green Fields Partnership?

Only Green Fields LLP is liable.

Polyquan, Inc. emails a dozen companies, offering to sell them 100 sweatshirts in either blue, red, orange, black, or green. The sweatshirts are $6 each. Shirts-A-Lot Clothing emails back, "We accept your offer of 100 sweatshirts for $6 each. No orange sweatshirts." Bespoke Tourism emails back, "We accept your offer of 100 sweatshirts for $6 each on the condition that you do not include any orange sweatshirts." Does Polyquan have a contract with either company?

Polyquan has a contract with Shirts-A-Lot but not with Bespoke Tourism

Miles is floating happily on a rubber raft in his swimming pool in New Jersey when the raft busts and cuts his eye. His doctor says he will need corrective surgery and may never fully regain his eyesight in the damaged eye. Miles learns that the raft was manufactured in Louisiana by Intack Inc., a company headquartered in New Mexico. Miles bought the raft from a Kidz Toyz store, a chain of stores in New Jersey that sells many Intack products. Miles sues Intack in a New Jersey federal court for $100,000. Intack files a motion to have the case moved to federal court in New Mexico, saying that New Jersey lacks jurisdiction over the case. Is Intack correct?

Probably not. Intack does a significant amount of business in New Jersey and can reasonably expect to be sued there.

Rick was in the process of buying 320 acres of land when Rick signed a contract to sell that same land to Simon. Simon paid Rick $144,000, the full price of the land. Before Simon could complete the purchase of the land, Rick went bankrupt. Which of the following remedies should Simon seek from Rick?

Restitution.

Rodolfo hires Tessa to paint the exterior of his house. Two days into the project, smoke from a nearby forest fire blows onto the property and stains her work. Tessa will have to start again. Tessa asks Rodolfo to pay for the additional labor and materials, and Rudolfo agrees. Tessa completes the job, but Rodolfo refuses to pay the additional fee. Tessa sues. What outcome?

Rodolfo owes Tessa the additional money because Tessa promised to re-paint the stained areas of the house and needed more paint to do the job.

PillPharm is negotiating a deal with Happy Valley Health (HVH) for the sale of PillPharm's latest health supplement. PillPharm would like to package its supplements in bottles produced by Frank, but Frank says he will not enter into a contract with PillPharm until the HVH contract is finalized. HVH has sent PillPharm a letter of intent, but Frank thinks it is too vague and refuses to enter into an agreement with PillPharm. What should PillPharm do?

Send HVH its own letter of intent stating that they do have a binding agreement.

The Onyx Company negotiated intensely for months to hire Robert Conyers as its new Chief Executive Officer (CEO). Attorneys for both the Company and Mr. Conyers were now working on the final employment contract, and it was especially important to the Onyx Company to keep their new CEO for at least 10 years. Because Mr. Conyers had exceptional skills and considerable experience related directly to the company's industry, it was important for the contract to include an atypical retention clause in the event of a merger with another entity. If Onyx's attorney was concerned about enforceability of the retention segment, what could they add to the contract to safeguard the rest of the provisions?

Severability provision.

Zephyr agrees to mow his brother Zeke's lawn for free while Zeke recovers from a broken leg. Zeke tells Zephyr not to use the mower if its warning light turns on, but Zephyr ignores the warning. The engine overheats, ruining the lawnmower. Is Zephyr liable for the damage?

Yes, because Zephyr's conduct was grossly negligent.

Slimline and Distributor signed a contract that provided that Distributor would use reasonable efforts to promote and sell Slimline Diet Soda, which was already being sold at Warehouse Club. After the contract was signed, Distributor stopped conducting the in-store demos of Slimline it had previously been doing at Warehouse, and it did not repackage the product as Slimline and Warehouse requested. Sales of Slimline continued to increase during the term of the contract. Slimline sued Distributor, alleging a violation of the agreement. Who is likely to win?

Slimline, because Distributer's conduct is a material breach.

Jonah is 12 years old and absolutely loves soccer trading cards. At the local hobby shop, he finds a "Lionel Messi" trading card in the case, which has a handwritten tag by it that reads "9/00-." The employee at the front desk interprets this to mean $9.00 and sells Jonah the card for that amount. A few days later, Ronaldo, the card shop owner calls Jonah and asks for the card back because it is worth around $900. Jonah refuses, and Ronaldo sues. Which of the following is Jonah's strongest argument?

That neither Ronaldo nor Jonah knew the real value of the card.

Liam tells Emily that he wants to buy her friend Tamara's car, but does not think Tamara will sell it to him for personal reasons. Emily tells Tamara that she knows someone who would like to buy her car, and the two draw up a contract stating that Tamara will sell the car to "an undisclosed buyer" for $10,000. After Tamara has signed the contract and given Emily the keys, Emily has Liam sign the contract, agreeing to pay the $10,000 purchase price. Liam takes the car but disappears without paying. What, if anything, will Tamara be able to recover from Emily?

The contract price of the car because Liam is an unidentified principal.

Dominique is the CEO of a pharmaceutical company and must decide whether to continue the company's research into a new skin treatment. Originally, the company had hoped the treatment would help burn victims recover quickly, but two years and $5 million in testing has revealed that it is only useful in relieving very dry skin if applied hourly. In addition, projections show that it will be so expensive to produce the treatment that the company will have to charge $100 a day for it in order to make a profit. However, the researcher in charge of the project is Dominique's best friend, so Dominique approves another $5 million to be spent on continued research of the treatment. If the company's shareholders challenge Dominique's decision, how will a court rule?

The court will rescind Dominque's decision and hold her liable for any losses suffered by the company as a result of the decision, unless Dominique can show the transaction was entirely fair to the shareholders.

Over spring break, you go to Florida and accidentally spend too much on your checking account's debit card. When you get back to school, you are shocked to see you owe your bank $220, which you pay back immediately. However, you have not even had time to recover from your sunburn before the bank informs you that, pursuant to the liquidated damages clause in the contract you signed when you opened the account, you are being charged a $55 "overdraft fee" for every transaction you made on your debit card after your balance was $0. Unfortunately, you made nine such transactions, which means you owe the bank an additional $495 in fees (9 x $55 = $495). What is your best argument against the overdraft fees?

The fee is too high, and the bank is simply imposing a penalty.

In March, Louisa's Hamburger Stand contracts with HydrationCorp to buy 100 bottles of lemonade for $100 and an additional 100 bottles of lemonade for $115 on May 1. After the purchase and delivery of the 100 lemonades in March, Louisa speaks with a HydrationCorp representative, and they agree that on May 1 HydrationCorp will instead sell Louisa 100 bottles of iced tea for $115. What will result?

The new terms may be binding because an oral modification may be binding under the UCC.

Mariposa Middle School is in need of more sports equipment, so a school administrator contacts Kiko's Sporting Goods. The administrator speaks to Kiko herself, and Kiko offers Mariposa 15 percent off its order. Kiko tells the administrator she can order whenever she is ready and still enjoy the discount. Kiko faxes the administrator a handwritten note that reads "Pursuant to our conversation, I hereby grant Mariposa Middle School a 15% discount off the final sales price of their purchase. Offer good for one use only. Offer open for the next 5 months. Signed, Kiko" The administrator tries to use the discount four months later but Kiko says she has revoked the offer. What will result?

The offer will not be enforced because the offer is open too long.

Landlord owned a clothing store and agreed in writing to lease the store's basement to another retailer. Both parties signed a written lease that (1) described the premises exactly, (2) identified the parties, and (3) stated the monthly rent clearly. However, a trial court held that the lease did not satisfy the Statute of Frauds. Why not?

The writing needs to state the effective dates of the lease.

Sammy's, Inc. is a publicly traded company. Sammy's board of directors appointed Jeb as CEO. Jeb has made a number of blunders, which drove Sammy's deeply into debt. In its first meeting in six years, the board of directors votes for Sammy's to file for bankruptcy. Has the board committed any violations?

Yes, the board has breached its duty of care.

When Tremaine arrived in Cincinnati, he rented an SUV from a car rental company in the airport terminal. A month after the trip, he noticed that the charge on his credit card for the SUV was much higher than he anticipated because the rental company had charged him $30 per gallon to refill the gas tank. He reviewed the eleven-page rental contract and noticed on page seven a provision about the gas charge. He saw another provision on page ten stating that in order to file a dispute with the company he would be charged a $750 "Investigation Fee" for his claim to be reviewed. Tremaine sues the rental company. Which of the following outcomes is most likely?

Tremaine will win because the contract was procedurally and substantively unconscionable.

One provision in a contract states "Ulysses vows he is a board-certified physician" and another states "Emma promises not to eat red meat for six months from the date of this agreement." Which of the following best describes these contract terms?

Ulysses has made a warranty and representation; Emma has made a covenant.

Central Maine Power Co. (CMPC) made a promotional offer in which it promised to pay a substantial sum to any homeowner or builder who constructed new housing with electric heat. To qualify for the offer, Motel Services, Inc. (MSI) decided to install electrical heat in a housing project it was constructing in Waterville, Maine. MSI built the units and requested payment for the full amount of the promotional offer. Is CMPC obligated to pay? Why or why not?

Yes, CMPC is obligated to pay because this was a unilateral contract, and MSI performed.

Richard hires Paul to paint his kitchen in two eight-hour days of work for $500. At the end of the first day, the kitchen is 85 percent complete. Richard asks Paul to stay late and finish. Paul agrees to stay and complete the painting if Richard pays him a total of $750 for the job. Richard agrees. Does Richard owe Paul the additional $250?

Yes, Paul provided the additional consideration of working overtime and completing the work in a shorter time period than originally agreed.

While visiting Sarah's art gallery, Mark spots what he believes is an original painting by the artist Vincent van Gogh and agrees to buy the painting from Sarah for $1,000,000. Upon returning home, Mark has the painting appraised and learns that it is not a Van Gogh and is worth only $100,000. Mark sends Sarah a letter saying that he bought the painting under false pretenses and will pay only the fair market value of the painting, enclosing a check for $100,000 with "payment in full" written in the memo line. Before depositing the check, Sarah crosses out Mark's note and writes "first partial payment" over it. The next day Sarah learns that Mark's check has bounced. If Sarah sues Mark, will the court find in her favor?

Yes, as there was no satisfaction of the debt because Mark's check bounced.

Alex, a 25-year-old banker, joined his friends at a "pub-hopping" trip that had participants visiting six bars in a two hour span of time. Between the fifth and final pub stop, a highly intoxicated Alex stopped to use the bathroom at a local luxury car dealer, who was holding a special evening sales event. Seeing all the cars and thinking he was signing up for training as a race car driver, Alex mistakenly signed a contract to purchase the $188,425 emerald-green Ferrari displayed in the showroom. The next day, a sober Alex found the contract paperwork at the foot of his bed, and with no memory of the previous evening, quickly headed to the dealership. As he began to explain to the sales manager Janine about the drunken purchase mistake, he changed his mind, and decided to keep the car. Manager Janine, however, took the contract copy from Alex and ripped it up, saying "You're not responsible enough to own this car." Does Alex keep the Ferrari?

Yes, because Janine can't void the contract.

The Roberts family just received news from Jo-Anne Roberts' employer that she was receiving a prestigious promotion to Corporate Vice President. The new position was in New York City, nearly 3,000 miles away from their home in Los Angeles, California. Because Jo-Anne needed to find a place to live in the city quickly, she agreed to purchase via phone a 2,000 sq. ft. apartment located a few blocks from her new office. Jo-Anne wired the owner a payment of $500,000 against the $3.7 million negotiated price of the apartment. Without waiting for further word from the owner, Jo-Anne and her husband Albert loaded their 3 children and 2 cats into their SUV and headed for the "Big Apple." Once arriving New York, the family moved into the apartment and redecorated the entire interior, at a cost of $350,000. After living in the apartment for two months, Jo-Anne wired another $500,000 payment to the owner, who called immediately after receiving the payment and said the deal was off. Can Jo-Anne keep the apartment?

Yes, because Jo-Anne has completed part performance on the contract.

Lindsay decides to go skydiving for the first time and chooses a company with an excellent reputation. On the day of the dive, Lindsay slips on some oil on the floor of the company's airplane hangar and fractures her elbow. Will Lindsay win a negligence suit against the skydiving company?

Yes, because Lindsay is an incite of the skydiving company.

Ellen and Allen are interested in renting Lyle's country house for the summer. Lyle tells them about the house, volunteering the property's square footage, the number of bedrooms, and stating that the house has a heated pool and a hot tub. The next day, Lyle learns that the pool is going to be drained for the summer as it undergoes repair. Must Lyle disclose this information to the potential renters?

Yes, because Lyle previously told them about the pool.

Marley owns 10% of the common stock in Hometown Industries, Inc., and Cecil and Jonathan each own 45%. Both Cecil and Jonathan sit on Hometown's Board of Directors (BOD) and are paid officers, while Marley is only a shareholder with no other role in the company. Hometown has not paid dividends to shareholders in a number of years, despite the company's financial success. When Marley questions the lack of distributions, Cecil points out that any profits have been reinvested in the company. Jonathan shows Marley how the use of company profits has improved and strengthened the business, resulting in its current success. Knowing Marley is unhappy, Cecil and Jonathan offer to purchase all of Marley's shares in the company for $25 per share. Marley believes his stock is worth much more, and asks to inspect Hometown's corporate books, but Cecil and Jonathan refuse. Does Marley have a right to inspect Hometown's corporate books?

Yes, because Marley's request is related to his interest as a shareholder.

Michi Corp.'s board of directors has determined that the insolvent company will not be able recover financially and it is best to terminate the corporation. The board unanimously votes to dissolve and makes a recommendation to dissolve to the shareholders, but only 40 percent of the shareholders vote to approve dissolution. The shareholders insist that Michi is simply mismanaged and can be saved if the board appoints a new CEO. May the Michi board request a court to order dissolution of the company?

Yes, because a court may dissolve a corporation if it is insolvent or if its directors and shareholders cannot resolve a conflict over corporate management.

Lucian has every reason to believe the new pizza shop he is opening will be a success, but he also has a lot riding on it. He has borrowed a significant amount and has refinanced his house to pay for the expenses of starting up. If the business does not succeed, it will be a disaster for his family. Fortunately, the construction and start up of the business will be pretty simple, and he is hiring his sister Allegra (an experienced contractor) to do most of the work. Should Lucian and Allegra put their contract in writing?

Yes, because it is essential to the success of Lucian's business that construction goes smoothly.

Mona was working as a medical biller-coder supervisor for a medical physician group in primary care called The Olaf Group, and she was also a shareholder and director in the overall medical company. After about two years of supervising the Olaf Group, Mona heard about an opportunity to do billing for a dermatology practice in town. Although she knew the Olaf Group could do the work, Mona thought that it would be more effective for the dermatologist if she did the work independently. So, instead of bringing the opportunity to the Olaf Group, Mona decided to just take on the dermatology work on her own. Has Mona breached any fiduciary duties to her group?

Yes, because she has a responsibility to bring the opportunity to the Olaf Group first.

Alissa accepts a six-month unpaid internship at Jonah's dental practice. After one month, Alissa wants to quit but knows that if she does it will cost Jonah a lot of time and money to find and train someone new. Can she quit before the end of the six months?

Yes, because she is a gratuitous agent.

Barbara had a dream of opening her own bakery she planned to name "Sinful Sweets." While she saved money to start her business, she worked for a big commercial baker known as "The Bread Factory." The Bread Factory made many different types of bread, but none of the sweet baked items Barbara hoped to offer in her own shop. So, while Barbara made French baguettes and sourdough loafs, she thought about cupcake icing and baking the perfect chocolate chip cookie. Soon, the daydreaming led to snips of time searching the internet on her mobile phone for recipes; then she progressed to starting a file on her supervisor's computer desktop filled with ideas and saved searches. Barbara started testing her recipes using the bakery's materials, and she found that all her efforts were making her a better and more efficient baker. Once she had tested all her recipes at the bakery, Barbara's next step was to take two accumulated sick days to search for a storefront for Sinful Sweets. She found the perfect spot and provided two weeks' notice to The Bread Factory, including one week of vacation she had saved. Has Barbara through her actions breached a duty of loyalty to her soon-to-be former employer?

Yes, because she used The Bread Factory's resources and time to prepare for her own business.

Beatrix is a diamond dealer who also works as a jewelry designer at Bunny Mayhew Designs (BMD). Beatrix arranges to have one of her own company's salesmen meet with a BMD representative to try to sell some of Beatrix's available stock. May Beatrix do this?

Yes, but Beatrix must tell BMD that the salmon works for her.

Herman rightfully dissociated from Oak Tavern, a partnership, 18 months ago. Neither Herman nor the remaining Oak Tavern partners notified anyone with whom Oak Tavern does business that Herman had left the partnership. Oak Tavern has not paid one of its suppliers, Great Grains, for its purchases over the past 10 months. Can Great Grains recover the money it is owed by Oak Tavern from Herman?

Yes, but Herman can recover whatever he pays to Great Grains from Oak Tavern.

Fitness World is a corporation with 75 shareholders that are individuals who all hold common stock. At an annual meeting, the shareholders unanimously voted that Fitness World should register as an S corporation with the IRS so that the shareholders may enjoy the flow-through tax benefits. Is Fitness World eligible to register as an S corp?

Yes, if all of the shareholders are U.S. citizens or residents.

Connor owns ten percent of the stock issued by Outdoorsmen, Inc., an outdoor sporting supply company. The nominating committee has nominated an executive from a private equity firm for the open seat on the Outdoorsmen board. Connor believes the nominee does not have the industry knowledge to properly manage Outdoorsmen and that his good friend, Michael, who has produced popular nature documentaries and has a CPA, will be much more effective. Connor demands that Michael be included in the proxy materials sent to shareholders. Must the Outdoorsmen board comply with Michael's request?

Yes, if the company has proxy access bylaws.

Mack is the local owner of a restaurant franchise. Though the national chain is known for its hotdogs, Mack wants to sell vegetarian burritos. Must Mack get permission from the franchisor?

Yes, if the franchise agreement demands it.

Unhappy with the management of Jackpot Enterprises, Inc., a shareholder asked the company to include a proposal in the proxy statement that would require the board of directors to sell or merge the company. Must Jackpot include this proposal in its proxy statement?

Yes, if the shareholder has owned at least one percent or $2,000 of Jackpot's stock continuously for a year.

Percy and Yolanda are partners in a business that provides financial advisory services. Percy steals $50,000 from a client's account and immediately disappears with the money. Is Yolanda liable to the client for the $50,000?

Yes, if the theft occurred through the ordinary course of business.

Denise was a promoter for a proposed corporation, EVR-Young Corp. As promoter, she signed a three-year lease to rent office space from Landlord. She signed her name and indicated below her signature she is signing as "promoter for EVR-Young Corp., a company yet to be incorporated." EVR-Young never files incorporation documents with the state. Is Denise personally liable for the lease?

Yes, she remains liable as the promoter on a contract for which there has been no novation.

In order to obtain limited liability, Tom and Doris properly formed a limited liability company (LLC) to operate their catering business. They sometimes deposited the proceeds from catering jobs into their personal checking accounts, and if they needed to pay personal bills and were short of funds, they used the business account. If creditors of the business cannot get payment for their invoices, will a court order Tom and Doris to pay the creditors using their personal assets?

Yes, the court can pierce the veil of an Llc because Tom and Doris commingled assets.

Xuechen graduated from culinary school at the top of her class, and signed an employment contract to work as a chef for one of Chicago's best restaurants for a period of three years. Additionally, Xuechen signed a non-competition agreement that stated she agreed not work as a chef for any other restaurant in the Chicago city area for a period of five years. Shortly after she began working, Xuechen left her employer to work as a manager at another Chicago restaurant. Has Xuechen breached either of the contracts she signed?

Yes, the employment contract has been breached, but the non-competition agreement has not been breached.

Isabel, Wesley, Gina, and Lucas worked together intensively to form an environmentally conscious corporation named Icon Corp. They are the only shareholders. Is there anything the group can do to avoid having Icon shares sold to someone who does not share their vision for the environment?

Yes, they can sign a shareholder agreement.

After Classic Corp. went public at $12 a share, it began suffering many years of losses. Isaac Fogel, who owned 64 percent of the stock, decided to take the company private again by buying shareholders' stock at a price of 20 cents a share. Classic hired two financial advisers who opined that the buyout price was fair. The board of directors voted in favor of the sale and then scheduled a special shareholder meeting to vote on the buyout. Do the minority shareholders have any rights?

Yes, they have legal protection and are owed a fiduciary duty from the majority shareholders.

Joel owns a construction business. Joel's brother-in-law, Barry, works for him on several of his large projects. At the grand opening of one of Joel's buildings, a client introduces Joel and Barry to Marie, referring to the pair as partners. Neither Joel nor Barry corrects the client. Impressed with the building, Marie asks Joel and Barry to manage her real estate development firm's next project. Joel does not want to take the job, but Barry wants to try to run his own project, so he accepts. The project is a disaster, and Marie loses $2 million due to Barry's mismanagement. May Marie hold Joel liable?

Yes, under a theory of partnership by estoppel.

The SEC discovered that Alliant's annual report contained misleading financial statements, which concealed the fact that Alliant would not be able to collect $2 million worth of debt. When the SEC releases a statement concerning Alliant's fraudulent filings, the company's stock drops from $38 to $15 per share. Six months prior to the SEC's announcement, Alliant's CFO sold half of his shares at the company's all-time high stock price of $43. May Alliant recover any money from the CFO that he earned from his sale of stock?

Yes. Allianz may claw back all of the profits the CFO received from the sale of the stock six months ago.

Gerald is the sole nominee to fill the open position on ABC Corp.'s board of directors. Gerald has been on the board for the past ten years and his management style is extremely unpopular. At the annual meeting, Gerald receives two of the 1,000 shareholder votes. May Gerald remain on the ABC board?

Yes. Gerald has received the necessary number of votes.

Piper is suing Dimitri for breach of contract. Her lawyer admits into evidence a fully integrated contract signed by Piper and Dimitri stating that Dimitri will sell Piper his beach house for $250,000. Will Dimitri be allowed to testify that he only signed the contract because Piper had a gun to his head?

Yes. The court will admit evidence that Dimitri signed under duress.

The Hoffmans owned and operated a successful small bakery. Lukowitz, an agent of Red Owl Stores, told them that for $18,000 Red Owl would build a store and fully stock it for them to operate. The Hoffmans sold their bakery and purchased a lot on which Red Owl was to build the store. Lukowitz then told the Hoffmans that the price had gone up to $26,000. The Hoffmans borrowed the extra money from relatives, but then Lukowitz informed them that the cost would be $34,000. Negotiations broke off and the Hoffmans sued. The court determined that there was no contract. Can the Hoffmans recover any money?

Yes. They can most likely recover damages based on promissory estoppel.

Stephan and his boss agree to extend his employment contract by an additional six months. The employment contract states that all amendments must be in writing, so Stephan and his boss cross out and change the provision in his contract that covers the duration of his employment and rewrite it to include the additional six months. They each initial and date the change, and they each keep a copy of the agreement. Is the amendment valid?

Yes. This is a valid way to execute a written amendment.