BLAW Exam Questions

Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a similar job with Tech Talk, Inc., which would have paid $3,500. Rita files a suit against SMC. As compensatory damages, Rita can recover

1000

Q4. Mitch is a director and officer of Numero Uno, Inc. Mitch makes a marketing decision that results in a dramatic decrease in profits for Numero Uno and its shareholders. The shareholders accuse Mitch of breaching his fiduciary duty to the corporation. What is Mitch's best defense against this accusation and why?

Mitch's best defense is the business judgement rule. Mitch took a chance which ended with a decrease in profits. The business judgement rule states that directors are not liable to any kind of loses that take place due to bad business decisions, as long as the acts are made in good faith and with the company's best interest in mind. However, the business judgement rule emphasizes that not every decision is going to be successful. It is ridiculous to say that everyone would make the right decision 100% of the time and the business judgement rules supports this. 10

Q1. Consolidated Boring Corporation ships its only pump to Drills & Bits Inc., the manufacturer, for repair. Consolidated hires Everywhere Shipping, Inc., to take the pump to Drills & Bits and to return it to Consolidated as soon as the repair is complete. Consolidated is forced to suspend operations without a pump, but Everywhere Shipping does not know this. Consolidated expects to be without the pump for five days and to lose profits of $5,000. When the pump is not returned by the end of the fifth day, Consolidated rents a pump at a cost of $100 per day. Everywhere Shipping delays five more days before returning the pump. Consolidated files a suit against Everywhere Shipping, asking for compensatory, consequential, and punitive damages. Will Consolidated recover?

Consolidated Boring Corporation will be able to recover some of the damages. Since Everywhere Shipping didn't perform fast enough, it is a breach of contract which Consolidated can recover damages. With the late delivery of the pump because of Everywhere Shipping, Consolidated is entitled to recover the cost of renting a pump for five days. These are compensatory damages. However, Consolidated Boring Corporation will not receive consequential damages since Everywhere Shipping did not know of the circumstances of the shutdown of Consolidated Boring Corporation. 8 punitive damages?

Isabel and Josh engage in a business transaction that leads to a dispute. Isabel initiates a lawsuit against Josh by filing a complaint. The sheriff serves Josh with a summons. If Josh chooses to ignore it,

Isabel will have a judgment entered in her favor.

Motor Corporation (MC) makes cars and trucks. National Sales Company sells all MC vehicles. Open Road Inc. leases only the cars. Under product liability laws, liability for injuries or damage caused by an MC vehicle may be imposed on

MC, National Sales, or Open Road.

Mai is struck and injured when the brakes fail on Novi's all-terrain vehicle (ATV), which is damaged in the collision. Off-Road Inc. sold the ATV to Novi. Under product liability laws, Off-Road could be liable to

Mai and Novi.

Without the permission of the copyright owner, Faye copies the literary expression of Game of Thrones, changes the names of the main characters, and publishes the result as her own work. This is

copyright infringement.

Under Chapter 7, once the proceeds have been distributed, the obligations of the debtor most likely to be discharged are

none of the above. taxes accruing within the last three years. claims based on the debtor's willful or malicious conduct or fraud. student loans. none of the above.

Phoenix Inc. is a publisher. Phoenix uses a logo featuring a bird rising from a flame to identify its publications. The publications are printed in a unique process that includes a 3-D printer. Phoenix could most likely obtain trademark protection for its

logo

Jill and Kane, with their attorneys, meet to try to resolve a dispute. A neutral third party works with both sides and proposes a solution, but does not make a decision resolving the matter. This is

mediation

Gil is an officer for HVAC Corporation. Due to Gil's choice of a certain supplier, HVAC's costs are somewhat higher than they might have been if a different supplier had been chosen. Gil is most likely liable for breach of

none of the choices breach of trust and confidence. breach of the business judgment rule. negligence or mismanagement.

The idea for "Price & Profit," an app that businesses can use to track their revenue, profit, and payroll, is protected by

none of the choices. a. copyright law. b. patent law. c. none of the choices. d. trade secrets law.

George burns a U.S. flag in his backyard. He films the activity and posts the video on YouTube.com. George's conduct is most likely

protected by the First Amendment.

Rosa, who operates a Street Tacos restaurant in her apartment, is charged with criminal violations of the local health and building codes, state license regulations, and federal environmental statutes. To obtain a conviction, the prosecution must

prove beyond a reasonable doubt that Rosa committed every essential element of an offense.

Leigh buys Masters of Business, a copyrighted book. Under the first sale doctrine, Leigh can

sell the book to another person.

Rena establishes and operates Sweet Homes, a construction-contracting outfit, as a sole proprietorship. In the course of doing business, the outfit fails to pay some of its debts. To satisfy the obligations, the firm's creditors can go after

the firm's assets and the owner's personal assets.

Steps & Rungs Inc. makes ladders. Ty discovers that his Steps & Rungs ladder is defective and sues the maker for product liability based on strict liability. To win, Ty must show that

the ladder was in a defective condition when Steps & Rungs sold it.

Restore Inc. contracts to resurface the pools at Swim Park by June 1. Restore knows that if performance is not timely, Swim Park will have to delay its seasonal opening. Restore finishes the job June 15. In a suit for breach, Swim Park can recover

the loss of profit from the delayed opening.

Zoey is accused of auto theft. She refuses to give information related to her alleged criminal activities because she suspects it will be used to prosecute her. This is

the privilege against self-incrimination.

Miko owns a lake house that she rents to vacationers. Miko gives her son Ninh a trip to Omaha on his graduation from community college. Miko sells her car to her neighbor Pye for $4,500. UCC Article 2 covers

the sale to Pye.

Dona offers to sell her used sofa, chair, coffee table, end table, and lamp to Erma for $700. Erma responds that she will pay that price if Dona's TV set is included. Neither party is a merchant. Their contract is formed according to

the terms of the original offer.

Huan is a shareholder of Insulation Inc. When the directors fail to undertake an action to redress a wrong suffered by the firm, Huan files a suit on its behalf. Any damages recovered by the suit will go to the firm's

treasury

Q3. Owen plans to open Owen's Pets, a pet sales and supplies outlet, and to hire Quimby and Ruth. Owen will invest only his own money. He does not expect to make much profit for the first three years, but he hopes to expand eventually. Which form of business organization would be most appropriate and why? If Owen wants to obtain additional capital to expand the business, but does not want to lose control of the firm, what is his best option?

Since Owen's Pets is relatively small, not diversified, employs relatively few people, has modest profits, and is not likely to expand significantly or require extensive financing in the immediate future, the Owen's best option is to be a sole proprietorship. A sole proprietorship is easier and less costly than many other forms of business since there are fewer legal forms involved. It is also more flexible since the owner is free to make business decisions without consulting others. Also, taxes are paid on the business's income as the owner's personal income. 7 2nd q? can borrow for expansion

Q1. Meg is shopping in Nate's Hardware Store when a nail gun in use by Ovid, one of the store's employees, fires without warning and hits Meg in the leg. Nate checks the gun and discovers that it was assembled improperly. Meg files a suit against Power Tools Inc., the maker of the gun, on the ground of strict product liability. What does Meg have to show to win her case? In whose favor is the court likely to rule? Explain.

To win her case, Meg would have to be able to show that the product was defective, Power Tools Inc. was going to distribute the product, the nail gun was unreasonably dangerous because it was defected, and that the plaintiff (Meg) suffered harm from the incident. The court would most likely rule in Meg's favor because the Power Tools Inc. would be strictly liable in this scenario.

As part of a stock offering for Design Media Corporation, the firm's accountant Eve intentionally misrepresents material facts in the prospectus. Fred buys the stock unaware of the misrepresentation and suffers a loss. Eve may be subject to

a fine, imprisonment, and damages.

Gift Shop is operated as a partnership, with five partners. Han has a one-third interest in the firm. Each of the other partners has a one-sixth interest. Ingre is the senior partner. With respect to ordinary management decisions

a majority of the partners must agree.

In a suit against Guillermo, Hailey obtains an award of damages. This is

a payment of money or property.

Bix backs out of City Parking Garage, colliding with Dill's car. Dill may recover $7,500 to cover the cost of the repairs if Bix failed to act as

a reasonable person.

Without creating a separate business organization, Rey starts up Street Cruisers, a pre-owned auto sales enterprise. This enterprise is

a sole proprietorship.

Jaime and Kay enter into a contract for the sale of a bicycle, but Kay later refuses to deliver the goods. Jaime asks a court to order Kay to perform as promised. Ordering a party to perform what was promised is

an equitable remedy.

Luke puts his motorcycle up for sale via a post on an online auction site. This is

an invitation to make an offer, not an offer.

Stig creates unique graphic works that feature characters of his own imagination. Copyright protection for Stig's work is

automatic.

Reno, an engineer for Shale Corporation, learns that the firm will increase the dividend it pays to shareholders. Reno buys 10,000 shares of company stock. When the dividend is announced to the public and the price of the stock increases, he sells the shares for a profit. He would not be liable for insider trading if the information about the dividend was

available to the public before he bought the stock.

Without Data Corporation's consent, Elias hacks into the firm's computers and downloads trade secrets and other confidential information. Most likely, Elias is liable for the tort of

conversion

Bill and Charlene enter into a contract for the clearing, plowing, and preparing of Charlene's 100-acre tract for which she agrees to pay $1,000. Bill transfers his duty under this contract to Dewey. With respect to the duties under the original contract, this transfer

does not relieve Bill of the potential obligation to perform.

To make a sale, Fran tells Gio that her Hyundai Kia has never been in an accident. This may give rise to an action for fraud if the statement is

false

Fiesta LLC contracts to buy 1,000 balloons from Gas Bags Inc. for $1 per item. When the market price decreases to 50 cents per balloon, Fiesta refuses to go through with the deal. Gas Bags can recover

500

Ivy slips and falls on the deck of Jet's Tour Boat and is injured. She incurs medical expenses of $500,000, and files a suit against Jet to recover. If Ivy is more than 50 percent at fault, she will recover

nothing

The members of Citizens Aware believe that a recently enacted federal law is unconstitutional. They write and sign a petition to the government to repeal the law, refuse to obey it, and stop others from complying with it. Under the First Amendment, these individuals have a right to

petition the government.

Analytic Data, Inc., wants to hire Benazir, a noncitizen. A work visa is most likely to be set aside for a noncitizen if

there is a shortage of qualified U.S. workers capable of doing the work.

Hal posts online secretly recorded videos of Ida, and includes her name, address, phone number, and Facebook page. Most likely, Ida could bring a successful tort action against Hal for

invasion of privacy.

Sara and Tim enter into a contract for a sale of orchids that requires payment within thirty days of delivery. The UCC provides that when parties do not specify payment terms, payment is due at the time and place of delivery. Under the UCC, the specific payment term in the parties' contract

is fully enforceable.

D'Antoni files a suit in a federal district court against Enya. D'Antoni loses the suit, appeals to the U.S. Court of Appeals for the Ninth Circuit, and loses again. D'Antoni asks the United States Supreme Court to hear the case. The Court is

not required to hear the case.

Do-It-Rite Inc. makes and markets tools. Evan uses a Do-It-Rite power screwdriver to scrape grout - a purpose for which it was not intended - and is injured when the tool slips. Evan files a product liability suit against the maker. The defendant's best defense is most likely

product misuse.

Hale, research manager for Investor Fund, Inc., adheres to utilitarian ethics in making business and ethical decisions that involve the actions of the firm. According to this standard, an action is morally correct when it produces the greatest good for

the most people.

Rice Corporation offers to sell Sushi Restaurants, Inc., five hundred bushels of rice. Sushi responds, "We agree to buy five hundred bushels only if the rice is Grade A quality." Without more, their contract is formed according to

the new terms of the acceptance.

To purchase a house, Clyde obtains a mortgage loan from Debit Bank. Clyde defaults on the payments on the loan. The bank has

the right to foreclose on the mortgaged property.

Brewed Beans Inc. makes and sells "CoCoCafe," a chocolate-flavored coffee. Darkroast Inc. later markets a similar drink under the name "KoKoKafe." This is most likely

trademark infringement.

Cattle House Steaks, an Alabama company, enters into a contract over the phone with Beef Packing Inc., an out-of-state corporation. If a dispute arises, an Alabama court can exercise jurisdiction over Beef Packing

under the minimum contacts test.

Bob devises a scheme to send fraudulent e-mailed ads - claiming that an arrest warrant has been issued for non-payment of taxes - to individual taxpayers. By these false pretenses, Bob intends to obtain money and personal data. This is

wire fraud.

Home Meals Corporation is poised to issue securities that, under the Securities Act of 1933, are exempt. This means that the securities can be sold

without being registered.

Macy offers to sell his fitness watch for $50 to Nona. Nona promises to pay Macy the price. Later, they exchange the watch for the funds. A contract was created when

Nona promised to pay for the watch.

Hal, a resident of Illinois, owns a warehouse in Indiana. A dispute arises over the ownership of the warehouse with Jack, a resident of Kentucky. Jack files a suit against Hal in Indiana. Regarding this suit, Indiana has

in rem jurisdiction.

Oversight Inc.'s board of directors votes to empower corporate officers to make decisions regarding ordinary, daily corporate affairs within well-defined guidelines. With respect to these affairs, Oversight's board

retains its responsibility.

Fez enters into a contract to buy 350 acres from Grain Farm to cultivate hops and open a brewery. Fez fails to make the purchase. Grain Farm's remedy is most likely

the difference between the contract and market prices of the land.

Containers Inc. sends its standard order form to Distribution Corporation to evidence a sale of packing materials. Distribution responds with its own standard purchase order form. Additional terms in Distribution's form automatically become part of the contract unless

the terms materially alter the original contract. the original offer expressly required acceptance of its terms. Containers objects to the new terms within a reasonable time. any of the choices.

In Beto v. Car Dealership, a state supreme court held that a minor could cancel a contract for the sale of a car. Now a trial court in the same state is deciding Dora v. Even Steven Autos, Inc., a case with similar facts. Under the doctrine of stare decisis, the trial court is likely to

allow the minor to cancel the contract.

Irma delivers her Jeep to be fixed at Kent's Auto Repair. Irma agrees to pay cash. Kent's performs, but Irma does not pay. Kent's keeps the Jeep until she pays. This is

an artisan's lien.

To purchase a house, Becky obtains a mortgage loan from Countywide Bank. The lender should record the mortgage to

be officially on record as holding an interest in the property.

Sports Bar and Tasty Bakery are adjacent businesses with adjoining parking lots. Sports Bar offers Tasty a discount on purchases if the bakery will not tow the cars of Sports Bar's patrons who park in the bakery's lot. The discount is legally sufficient consideration

because it is a promise of something of value.

Gobi is an employee of Haz-Mat, Inc. He refuses a transfer to a Haz-Mat department in which several employees suffered serious injuries from exposure to hazardous materials. Under the Occupational Safety and Health Act, Gobi may be

entitled to protection from discharge.

Shippers Warehouse initiates a suit against Trans-State Trucking (TST) by filing a complaint. If TST files a motion to dismiss, the firm is asserting that

even if the facts in the complaint are true, TST is not legally liable.

Fitness Club employs only female staff to assist its female-only members in the club. Greg, a forty-one-year-old male, applies for a staff job, but is not hired. In his suit against the club under the Civil Rights Act, the club most likely has

a bona fide occupational qualification defense.

Pipeline Corporation requires its employees to have a high school diploma. In a suit against Pipeline under the Civil Rights Act, the employer shows a connection between a high school education and job performance. Most likely, this is

a business necessity defense.

Q3. Health Source Inc. offers to buy Medico Supplies Corporation. On June 1, Medico gives Health Source copies of Medico's financial statements for the previous year. The statements show an inventory of $10 million. On June 15, Medico discovers that the previous year's inventory is overstated by $500,000, but does not inform Health Source. On July 1, Health Source, relying on the financial statements, buys Medico. On July 10, Health Source discovers the inventory overstatement. Can Health Source succeed in a suit against Medico? Explain.

Health Source could succeed in a suit against Medico since this case is fraud or misrepresentation of facts. Medico had a duty to Health Source to report accurate inventory and to inform Health Source if there was any overstated inventory as soon as Medico learned about it. Since Medico provided financial statements, so they made certain representations to Health Source. If they hadn't done that, this would be a different case since fraud is based on failure to disclose material facts when there is a certain relationship between parties. 8 and reasonable reliance on the misrepresentation which caused financial harm

Q4. The Wisconsin state legislature enacts a statute that prohibits the advertising of video games "because the games might be harmful to minors." Despite this new statute, the president of X-Games, Inc., orders X-Game marketers to place ads in various media. When an X-Game ad appears on YUTV, a local television station, X-Games and YUTV are charged with violating the statute. What is the defendants' best defense against a conviction?

Here the First Amendment is in violation because the First Amendment protects free commercial speech. Commercial speech doesn't have as much protection as noncommercial speech but is still protected under the First Amendment. The restrictions that can be placed on commercial speech could be done to protect consumers from deceptive or misleading advertising. Commercial speech "...may be restricted if the restriction promotes a substantial government interest, directly advances said interest, and/or is no more restrictive than necessary in order to achieve the substantial government interest," (Lecture Outline Chapter 4, pg 9). The ban on ads is too restrictive and goes too far in attempting to protect minors. 10

Q2. College Copy Shop (CCS) compiles, copies, and sells reading materials to students on the instructions of their professors, who indicate which parts of certain publications to include. These include texts published by Deep Topics, Inc. CCS does not obtain the permission of Deep Topics, or any of the other original publishers of the copied materials, and does not pay royalties on the sales of the compilations. Deep Topics and others file a suit against CCS, alleging infringement of the plaintiffs' intellectual property rights. Which type of intellectual property is involved in this situation? What is CCS's likely defense? How is a court most likely to rule? Explain.

In this situation the intellectual property is a copyright since CCS is copying and selling the materials from Deep Topics and others without permission. CCS would likely use the fair use doctrine (copying any copyrighted material for a limited purpose). However, the court would most likely rule that CCS's use of the materials from Deep Topics and other is not fair use. 7 why? Because fair use for limited educational purposes doesn't work when you are selling it

Q2. Veronica is a repairperson for Wind Power Company. The job requires traveling to remote areas to make repairs to windmills, transmission towers, and power stations under any conditions. Veronica has had the job longer than other employees. Veronica applies for a promotion to a supervisory position that requires constant communication with others in the field. Wind Power rejects Veronica for the promotion on the ground that Veronica is hearing impaired. Wind Power acknowledges that Veronica is otherwise qualified, but asserts that it "needs someone who does not have a hearing problem." Veronica files a suit against Wind Power under the Americans with Disabilities Act. What is the issue, and what are the relevant considerations on which its resolution depends?

The issue is whether hiring a sign interpreter is within a reasonable accommodation for Veronica due to hardship of Wind Power Company. The ADA of 1990 prohibits employers to hire of promote someone due to their disability, if the person is otherwise qualified for the hob. However, if accommodations need to be made and the employer feels the accommodations re too much, the employers can demonstrate that the accommodations that are needed to be made will cause undue hardship. There are no clear standards on what 'undue hardship' is but it can be used as an argument against the opposing parties claim. 10 can use text?