Business Law Chapters 6-10

Fact Pattern 10-1 Bridey defends against a suit for breach of contract by Continental Mortgage Company by claiming that their deal—a mortgage loan secured by Bridey's purchase of a house—was unfair because the consideration for their contract was inadequate. Refer to Fact Pattern 10-1. "Adequacy" of consideration refers to

"how much" consideration is given.

Wally offers to sell a certain used forklift to Valu Lumber Outlet, but Wally dies before Valu accepts. Most likely, Wally's death

terminated the offer.

Ludwig receives from Milo a marimba stolen from Nadine. To be criminally liable, Ludwig must know

that the marimba is stolen and Ludwig must intend to keep it.

Justin is charged with a crime. He insists that he should have an opportunity to object to the charges before a "fair, neutral decision maker." No one can be deprived of "life, liberty, or property without due process of law" under the

Fifth Amendment.

Flexo Trucking Company transports hazardous waste. Garn is a Flexo driver, whom the company knows drives longer hours than federal regulations permit. One night, Garn exceeds the limit and has an accident. Spilled chemicals contaminate Hill City's water source, forcing the residents to move away. Flexo acted unethically because

Flexo showed reckless disregard for Hill City's residents and others.

On May 1 Jill offers to sell Andrea a herd of sheep. On May 3 Jill mails Andrea a letter revoking the offer. Andrea receives the letter on May 5. Jill's revocation of the offer to sell the sheep became effective on

May 5.

Mona offers Ned, a building inspector, $5,000 to overlook the violations in her new warehouse. Ned accepts the cash and overlooks the violations. Mona is charged with the crime of bribery. The crime occurred when

Mona offered the bribe.

Vivian and Rob enter into a contract under which Vivian will clean Rob's house every week for a year. Under the E-SIGN Act, in order for e-signatures to be enforceable for this contract

Vivian and Rob must both agree to use e-signatures .

Quentin questions whether there is consideration for his contract with Rainey to exchange his performance with the Symphonic Saxophone Sextet for her payment of a certain amount. To constitute consideration, there must be

a bargained-for exchange.

Clay offers to pay Dot $50 for a golf lesson for Eula. They agree to meet the day after tomorrow to exchange the cash for the lesson. These parties have

a bilateral contract.

Over the Internet, Red & White Contractors, Inc., arranges to lease storage space from Blue Services Company. To complete the deal, Red & White clicks on a button that says, in reference to certain terms, "I agree." Most likely, the parties have

a binding contract that includes the terms.

Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision stating that she will not make and sell copies of the song. This provision is

a click-on agreement.

Hi-Lite Manufacturing, Inc., orders supplies online from Indigo Parts Company. To complete the order, the buyer is required to click on a button that says, in reference to certain terms, "I agree." This is

a click-on agreement.

Twyla's dock is damaged in an accident caused by Ulric's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulric fails to pay, Twyla can bring an action for breach of contract. This agreement is

a covenant not to sue.

Gina sells "Bulk Up" steroids over the Internet. She is arrested and charged with the sale of a controlled substance. This is cyber crime, which is

a crime that occurs the virtual community of the Internet.

Henry promises not to open his restaurant before 10:00 a.m. if Suzy, who owns a bakery next door to him, promises to close her bakery by 4:00 p.m. Henry's consideration is

a forbearance.

Opie offers to sell his guitar to Pinky for $200. Pinky agrees. They complete and sign a printed form and Pinky gives Opie a check for the price. The check is

a formal contract.

Megan is charged with jaywalking, which is classified as

a petty offense.

Cynthia tells Darryl that she will deliver his boxes of Paradise Cookies as he directs. A declaration that one will do something in the future is part of the definition of

a promise.

Tania promises to buy Saki's handheld video game-player for $40. Saki is

a promisee.

Jack promises to buy Lizette's used textbook for $60. Jack is

a promisor.

Mike is arrested at a warehouse in North Industrial Park and is charged with the crime of theft. Mike will be prosecuted by

a public official.

Bill and Stacy enter into a contract that falls within the provisions of the UETA. Under the UETA, "information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form" is

a record.

On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if various tasks are completed by Friday. On Wednesday, when Outdoor has finished more than half of the work, Neil says that he has changed his mind. These parties had

a unilateral contract as soon as Outdoor began to perform.

Lana applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "an employment offer conditioned on the applicant passing the exam." This letter is

a unilateral contract that Lana can accept by passing the exam.

Peter offers to pay Quik Delivery (QD) $50 if it picks up and delivers to him a package of business documents from Rico within thirty minutes. QD can accept the offer only by meeting the deadline. If QD performs as directed, these parties will have

a unilateral contract.

Lyle, vice-president of sales for Mi-T Electric, Inc., adheres to Judeo-Christian religious ethical standards. With respect to their application, these standards are

absolute.

Ellen offers to sell her math textbook to Julia for $50. Julia does not respond. Ellen and Julia do not have a contract because they lack the requirement of

agreement.

In deciding questions of corporate social responsibility, Valley Disposal & Recycling, Inc., is concerned with

all of the choices. (how the corporation can best fulfill any ethical duty to society, the effect on corporate profits of ignoring any ethical duty to society, whether the corporation owes any ethical duty to society)

Gustaf and Hilltop Country Club disagree as to the exact amount Hilltop owes Gustaf for his landscaping work. They form a new agreement that, on fulfillment, will discharge the prior obligation. This is

an accord and satisfaction.

Livewire Company and McCoy's Candy, Inc., sign a document that states Livewire agrees to design a Web page for McCoy's, which agrees to pay for the service. This is

an actual contract.

Mobile Media Company contracts to hire Nada for one year at $35 per hour, reserving the right to cancel the contract at any time after Nada begins performance by giving two weeks' notice. This promise is

an enforceable contract.

Peak & Vale Accountants provides other firms with accounting services. Questions of what is ethical involve the extent to which Peak & Vale has

an ethical duty beyond those duties mandated by law.

Holiday Sales Company and Global Distributors, Inc., enter into a contract for the delivery of imported specialty goods. Until the goods are delivered and paid for, these parties have

an executory contract.

Flo tells Ginger during a phone call that she will buy her textbook from last semester for $65. Ginger agrees. These parties have

an express contract.

GR8 Marketing Company and Brainfreeze Tunes, Inc., sign a document that states GR8 agrees to create a marketing campaign for Brainfreeze, which agrees to pay GR8 for the service. GR8 and Brainfreeze have

an express contract.

On behalf of the rock group Uno, their manager Thalia agrees to a performance in Seaside Amphitheater on July 4. Rex, acting for Seaside, sends a written copy of the agreement to Thalia to be signed. If Thalia signs the copy, the parties will have

an express contract.

Bay City Construction, Inc., a contractor, asks Cool Electric, a subcontractor, to provide certain services. Nothing is said about payment. Cool provides the services, but Bay City refuses to pay. In Cool's suit to recover, the chief issue is most likely to be whether these parties had

an implied contract.

When Jeff's car breaks down, he asks Insta-Tow, Inc., to tow it to Huey's Repair Shop. There is no discussion of a price, and Jeff and Insta-Tow do not sign any documents. Later, Insta-Tow sends Jeff a bill. With respect to Jeff's obligation to pay the bill, this is

an implied contract.

Evan is charged with a crime. Almost all federal courts and some state courts would not hold Evan liable if, at the time of the offense, as a result of a mental disease or defect, Evan lacked substantial capacity to

appreciate the wrongfulness of his conduct or obey the law.

First Design Corporation, a business firm, and Glen, a consumer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, the e-signatures

are as valid as signatures on a paper document.

In judging her action as a corporate employee of Music Notes Corporation, Brooke always lets her conscience be her guide. As an effective alternative, Brooke could

ask herself whether she would be happy to be interviewed by the national media about the action.

After an accident with a driver for Onyx Security Company, Paul signs a covenant not to sue Onyx for damages in a tort action if it pays for the damage to his car. This covenant

bars recovery only if Onyx pays.

Signe offers to sell Thomas her textbook but conditions the sale on Thomas accepting the offer by March 1. Signe may revoke the offer

before Thomas accepts the offer.

Jonah tells Levi he will give him an Xbox if Levi does Jonah's chores for a month. Levi promises to do the chores. Jonah and Levi have formed a

bilateral contract.

Jonathon promises to pay child support and alimony to his ex-wife every month after their divorce. Jonathon has

both a legal and a moral obligation to keep his promise.

Vernon claims that his contract with Ulani is voidable. If their contract is avoided

both parties are released from it.

Jared downloads some video games from the Internet. There is a page indicating the terms of use, but nothing that requires Jared to affirmatively indicate his consent before downloading the games. These terms are

browse-wrap terms.

Mae is granted immunity after she agrees to testify about a crime. Mae has an absolute privilege against self-incrimination and

cannot refuse to testify on Fifth Amendment grounds.

Dirk, an employee of Ergonomic Elevators, Inc., pays Ferbie, an employee of Ergonomics' competitor G-Force Risers Company, for a secret G-Force pricing schedule. This is

commercial bribery.

Frisco offers to buy a Gibson guitar owned by Hayden for twice what she paid for it. She accepts and hands the guitar to Frisco. Her delivery of the guitar is

consideration.

In negotiations with Coastal Distribution Company, Briggs Trucking, Inc., insists that their contract be drafted according to certain plain language laws. These laws concern the phrasing of

contracts.

MeatMen, Inc. spends a great deal of money and effort to ensure that all employees are safe on the job, that all products are safe for consumers, and that the environmental impact of the corporation is minimal. MeatMen appears to strongly believe in the concept of

corporate social responsibility.

Via the Internet, Rocky sabotages the computer system of Quik Chik'n Company, a food manufacturer, to alter the levels of ingredients in the company's products so that consumers of the food become ill. Rocky is a

cyberterrorist.

Jared is arrested and found guilty of a misdemeanor. His punishment will not include

death.

Scot and Tiffany enter into an implied contract. The parties' conduct

defines the contract's terms.

Straitway Company encourages its managers to behave ethically, reasoning that the employees will take their cues from management. One of the most important ways to create and maintain an ethical behavior workplace is for management to

demonstrate a commitment to ethical decision making.

Laredo advertises a reward for the return of his lost dog. Mikayla, who does not know of the reward, finds and returns the dog. Mikayla cannot recover the reward, because she

did not know of the reward when she found and returned the dog.

Produce Packaging Company promises its employees a 10 percent raise at the end of the year if productivity has increased and management feels the raise is warranted. Produce Packaging must

do nothing.

Davis points a gun at Eton, threatening to shoot him if he does not steal from his employer, Freddy's Convenience Store, and give the stolen funds to Davis. Charged with theft, Eton can successfully claim, as a defense

duress.

Jacqi tells Kenneth, who does not know how to perform comedy, that she will tutor him in the subject for $500. As an offer, this is

effective.

Refer to Fact Pattern 10-2. If Teatro says it is asking for the extra $250,000 because it has encountered extraordinary unforeseen difficulties that will add considerable cost to the project, the agreement is

enforceable because of unforeseen difficulties.

Apple & Pear Orchards contracts to hire Brigit for one year to tend the fruit in its commercial orchards but reserves the right to cancel the employment on thirty days' notice at any time after Brigit begins work. This promise is

enforceable.

Demi promises to buy a house from Caleb, who promises to vacate the property on June 1. If these promises are in writing, they are most likely

enforceable.

Megan is the ethics officer for Nature's Eggs, Inc., an organic egg raising company. In overseeing the application of the company's ethical code of conduct, Megan is most likely not in charge of

ethical reviews of employees' family members.

Liz offers to sell Jock her iPad for $500 without any accessories. Under the mirror image rule, Jock's response will be considered an acceptance if the terms of the acceptance

exactly mirror those of the offer.

Avatar, Inc., and Bling Corporation sign a contract in which Avatar agrees to deliver t-shirts emblazoned with video game characters in exchange for Bling's promise to pay. Avatar delivers. The contract is

executory.

Kathryn signs a lease agreement for an apartment. Kathryn has entered into a(n)

express contract.

In studying the legal environment of business, Professor Dooley's students also review ethics in a business context. Ethics includes the study of what constitutes

fair or just behavior.

Bruno is a businessperson with investments in legal and illegal operations. Bruno may be subject to penalties under RICO

for the commission of any business fraud.

Ivan signs Jeb's name, without his authorization, to the back of a check.This is

forgery.

Leah gains access to government records and alters certain dates and amounts in her favor. This is

forgery.

Susan is unhappy with the way her mother has made out her will. Susan has a lawyer draft a new will and then signs her mother's name to it without her mother's consent. Susan has committed

forgery.

Briana, an employee of Cotillion Bank, is charged with embezzlement, which requires

fraudulently appropriating another's property.

Eden, the chief executive officer of Flo-Thru Piping Corporation, wants to ensure that Flo-Thru's activities are legal and ethical. The best course for Eden and Flo-Thru is to act in

good faith.

Farouk uses his computer to break into Global Financial Center's computer. Farouk is a

hacker.

Rudy files a suit against Shakes & Shingles, Roofing Contractor, Inc., under the doctrine of promissory estoppel. Rudy must show that

he justifiably relied on Shakes & Shingles' promise to his detriment.

In making a decision as chief executive officer of Straightarrow Archery Supplies, Robin always considers whether he would feel any guilt about a particular action. As a guide, Robin is using

his conscience.

Posing as Platinum Bank, Oswald e-mails Nadia, asking her to update her personal banking information through a link in the e-mail. She clicks on the link and types in the data, which Oswald promptly sells to Moe. This is

identity theft.

Travis sends Suri what purports to be a link to an e-birthday card, but when she clicks on the link, software is downloaded to her computer to record her keystrokes and send the data to Travis. He uses the data to obtain her personal information and access her financial resources. This is

identity theft.

Jackson is accused of a crime. Jackson can refuse to provide information about his allegedly criminal activities

if he suspects the information will be used to prosecute him.

Qiana writes a check to Payday Loans, Inc., in an amount that represents half of her debt to the lender. On the back of the check, Qiana includes the words "payment in full." Payday agrees to accept the lesser sum and cashes the check. This discharges the entire debt

if the debt is unliquidated.

Bilt-Well Construction Corporation makes a side payment to a government official in Nigeria to obtain a contract. In the United States, this is

illegal and unethical.

Rio Business Corporation pays potential clients, including private foreign companies and the representatives of foreign labor organizations to facilitate business. If Rio knows that the payments will be passed on to a foreign government, this practice is

illegal if the payments violate the Foreign Corrupt Practices Act.

Alan, the president of Bayside Investments, Inc., and Colin, Bayside's accountant, are charged with a crime, after the police search Bayside's offices. Under the exclusionary rule

illegally obtained evidence must be excluded from a trial.

Dave's uncle tells Dave that if "he feels that Dave deserves it," he will give Dave $1,000 when Dave graduates from college. Dave's uncle's promise is

illusory.

Robert uses the Internet to defraud Prairie Valley Credit Union. He is found guilty of wire fraud. He can be punished by

imprisonment for up to thirty years and fines of up to $1 million.

Standard Purchasing Corporation and Total Sales, Inc., enter into a partnering agreement. Under a partnering agreement, parties agree

in advance to terms that apply to their future e-transactions.

Digital Products Company includes a shrink-wrap agreement in a transaction with Eagle Engineering Corporation. A shrink-wrap agreement is an agreement whose terms are expressed

inside a box in which goods are packaged.

Jack offers to sell Ben a new car for $10,000. Ben accepts the offer and sells his old car so that he will have money for the new one.Jack's offer is probably

irrevocable because Ben sold his old car because of justifiable reliance on Jack's offer to sell him a new car.

Kingston promises to pay Melina $500 to install a sump pump in his warehouse. Melina completes the installation. The act of installing the pump

is the consideration that creates Kingston's obligation to pay Melina.

Applied Business Corporation makes and markets its products nationwide. Under the stakeholder approach, to be considered socially responsible when making a business decision, Applied must take into account the needs of

its employees, owners, consumers, the community, and society.

Patricia commits an act via e-mail against Othman Finance Company, a business in California, where the act is a cyber crime. Patricia resides in New York where the act is not a crime. Prosecution of Patricia in California involves questions of

jurisdiction.

Scott, a State Bank employee, deposits into his account checks that are given to him by bank customers to deposit into their accounts. This is

larceny

Mariah takes off her ring and places it on her desk while she works. Without her knowledge or consent, her coworker Nita picks up the ring, puts it on, and walks away. Nita has likely committed

larceny.

Plato works for Quirky Squirters, Inc. During work hours, Plato "steals" time, space, and data on his employer's computer system to start up his own business, Rowdy Drenchers. This is

larceny.

William goes to Saddle Up Stables in the middle of the night when no one is around and takes five saddles. William's crime is

larceny.

Aron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country tunes at select social events for Banquet's payment of a certain amount. To constitute consideration, the value of whatever is exchanged must be

legally sufficient.

Rollo promises to perform, for a price, shoe repair services in affiliation with Togs 'n Things, a clothing store. To support a contract, the consideration exchanged by the parties must be

legally sufficient.

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

liable to Niki under the doctrine of promissory estoppel.

Sully signs a contract to borrow $200,000 from Riverside Bank to buy a house. In the contract, Sully agrees to pay a certain rate of interest on the amount of borrowed funds at monthly intervals for thirty years. This debt is

liquidated.

Fealty Credit Corporation asks its employees to evaluate their actions and get on the ethical business decision-making "bandwagon." Guidelines for judging individual actions most likely include all of the following except

loopholes in the law or company policies.

After Edie solicits clients to invest in a nonexistent business, she is charged with "mail fraud." This requires, among other things

mailing or causing someone else to mail a writing.

Housemate, Inc., makes and sells a variety of household products. With a fair amount of certainty, Housemate's decision makers can predict whether a given business action would be legal in

many situations.

Fact Pattern 10-3 Sally contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract. Refer to Fact Pattern 10-3. The next day, Sally changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sally and Tasty

may agree to a new contract that includes the new price.

Refer to Fact Pattern 10-3. Sally and Tasty

may rescind their contract to the extent that it is executory.

John is sales manager for Kleen 'N Brite Products, Inc. Compared to John's personal activities, his business activities most likely involve

more complex ethical issues.

Holiday Sales Company and Global Distributors, Inc., enter into an express contract for the delivery of imported specialty goods. Express contract terms are given

more priority than the prior dealing, course of performance, and trade usage.

Smitty, driving while intoxicated, causes a car accident that results in the death of Tiffany. Smitty is arrested and charged with a felony. A felony is a crime punishable by death or imprisonment for

more than one year.

Lea signs a contract with Metro Business Loans, Inc., to borrow $25,000 to remodel Lea's Hair Care Salon. Lea does not repay the loan. Metro fails to sue within the time prescribed by the applicable statute of limitations. Later Lea promises to pay the debt. To be enforceable, this promise needs

no consideration.

Lovett County Bank offers to lend money to Kino, the owner of Java Stop, at 15 percent interest. Before Kino accepts, a state statute is enacted prohibiting loans at rates greater than 12 percent. Kino and the bank have

no contract for a loan.

In business deals, Fiona, the chief executive officer of Snacks n' Bites, Inc., follows duty-based ethical standards. These are most likely derived from

philosophical reasoning.

Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave Fabricated's parking lot for which Fabricated agrees to pay. The requirements of this, and any other, contract do not include

practicality.

Maya, a police officer, wants to search the offices of Niles Corporation. Maya asks Judge Orion to issue a warrant. Under the Fourth Amendment, no warrants for a search or an arrest can be issued without

probable cause.

Jim tells Dana that he will take her out to lunch on Thursday. Jim has made Dana a

promise.

David, the chief accounting officer of Tension Fencing Corporation, wants to be sure that all the company's accounts are legal and ethical. Sometimes, however, he is unsure exactly what is legal and what is illegal. David should

try his best to not do anything illegal and keep documentation showing that he always acts in good faith.

Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable

under no circumstances.

Claudia pledges to donate $10,000 to Disaster Relief & Recovery Inc. (DR&R). On the basis of the pledge, DR&R orders additional supplies. If Claudia does not fulfill the pledge, a court may enforce it

under the doctrine of promissory estoppel.

Under a contract with Valley Vineyard, Walsh begins grading a terraced hillside for the planting of grapes. Halfway through the project, Walsh asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." Valley agrees but later refuses to pay. Their agreement is

unenforceable because Walsh's performance was a preexisting duty.

Fact Pattern 10-2 Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay. Refer to Fact Pattern 10-2. If Teatro offers no reason for the extra $250,000, but says only that it will stop work if it is not paid, the agreement is

unenforceable due to the preexisting duty rule.

Refer to Fact Pattern 10-2. If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased, the agreement is

unenforceable due to the preexisting duty rule.

Wilson buys a lottery ticket at his local gas station. Wilson has accepted an offer for a

unilateral contract.

In making decisions for Smartt Investments, Rita uses a cost-benefit analysis. This is a part of

utilitarian ethics.

Refer to Fact Pattern 10-1. If, as Bridey claims, the consideration for this contract is inadequate, it may indicate a lack of

voluntary consent to the contract on Bridey's part.

Fresh Fast Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to

what a reasonable person in Growers' position would conclude Fresh's words and actions meant.

National Shipping Corporation and Office Software Company (OSC) make a deal for OSCs products, communicating entirely online. Under the UETA, an electronic record is considered sent

when it leaves the sender's control or comes into the recipient's control.

InTown Delivery Service promises to deliver a certain couch to Kurt, who promises to pay for the service. If InTown does not perform, it may be required to

pay monetary damages.

Shasta offers to sell a used hay baler to Roberto, but receives a letter of acceptance from Quito, who has no relation to Roberto. A valid contract exists between

none of the choices.

Debit & Credit Accounting Services and Brickwork Construction Company negotiate a contract. Terms in the contract that are the subject of separate negotiation will be considered subordinate to

none of the choices. (standardized terms, terms that can be understood only by lawyers and judges, terms that are not negotiated separately)

May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick's Pre-owned Autos, hands May $10. This is

not a valid acceptance because May does not seriously intend to sell

Peter and Ray are riding their horses together. Peter jokingly tells Ray that Ray's horse is too slow. Ray laughs and jokingly responds "Yes, he is too slow! I would sell him for $5!" Peter hands Ray $5. This is

not a valid acceptance because Ray's offer was made in jest.

Mary admires Julia's collection of scarves. Julia says "I might sell you a few someday, if I get tired of them." Julia's statement is

not an effective offer because the Julia does not show a serious intent to be bound.

Pastry Dough, Inc., sends its catalogue to Octavio and includes a "personalized" letter inviting him to buy any item in it at the advertised price. This is

not an offer.

Jenilee promises to pay Kyle $500 because "he does not have as much money as other people." Jenilee's promise is

not enforceable because Kyle has not given consideration in return.

Clean Health Insurance, Inc. sends Kathy a health insurance termination. The health insurance termination is

not governed by the E-SIGN Act.

Mariah promises to pay her assistant Nadine $10,000 in consideration of the services she provided over the years. Mariah never pays Nadine. Mariah is

not liable, because the consideration is in the past.

Beth goes to Dr. Carlton for surgery. Carlton says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carlton is

not liable, because the statement was an opinion.

Margaret is the top manager of Pecans, Inc. She sets strict ethical standards for all employees. Margaret, however, often takes some of the company's best nuts and sells them from her house. The ethical tone at Pecans, Inc. is

not likely to be good because although Margaret sets strict ethical standards for the other employees, she does not follow them.

Mobile Minutes Company offers Nate an unlimited number of monthly phone minutes for $4.50 per month. Nate accepts. If a dispute arises, a court would likely

not question the adequacy of the consideration.

Sparky offers Teodora $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely

not question the adequacy of the consideration.

Franzea is injured in an accident caused by Gentry. Gentry agrees to pay Franzea $2,500 if she agrees to release him from further liability. She agrees. If Franzea's damages ultimately exceed $2,500, she can collect

nothing more from Gentry.

Kelly tells Jimmy she will pay him $1,000 if he builds a shed in her backyard. Kelly is a(n)

offeror.

A common ethical dilemma faced by the management of Spencer Hydraulics Corporation involves the effect that its decision will have on

one group as opposed to another.

Jon says to Kristy, "I would like to sell you my sports memorabilia collection." This is not an offer because it

only invites Kristy to negotiate.

Any decision by the management of Fast-Food Franchise Corporation may significantly affect its

operators, owners, suppliers, the community, or society as a whole.

Mark is creating a Web site through which he will enter into contracts over the Internet. Important terms to include in his offers include

provisions specifying the remedies if the contract is breached.

Julia, the head executive of Fine Woolen Sweaters, Inc., is a committed Christian who strongly adheres to the Ten Commandments. One of Julia's employees is found to be stealing sweaters and giving them to a local homeless shelter. Julia is likely to

punish the employee for stealing even though the employee's motive was benevolent.

Lia works for Media Marketing Company. Her job includes putting "spin" on the firm's successes and failures. In this context, ethics consist of

questions of rightness and wrongness.

Quality Sales Corporation enters into contracts over the Internet. Quality can protect itself against disputes involving these contracts by making important terms

reasonably clear.

Crafted Iron Works, Inc., offers to design, make, and sell City Transit Agency fourteen streetcars. Crafted authorizes a particular mode of communication, but City Transit sends an acceptance via a substituted means. This acceptance is effective when it is

received.

Herb, a computer programmer for Inventory Control Corporation, is arrested in his employer's parking lot on suspicion of larceny. Herb must be informed of his right to

remain silent.

Mary enters a gas station and points a gun at the clerk. She then forces the clerk to open the cash register and give her all the money. Mary can be charged with

robbery.

Vance points a gun at Workman and threatens to shoot him. Workman hits Vance, causing his death. Charged with homicide, Workman can successfully claim as a defense

self-defense.

Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when

sent.

Under the E-SIGN Act, Phillip may use an e-signature in all of the following instances except

signing his will.

Valley Paragliders Association files a suit against Wing Designers, Inc., claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if

something of value passed between the parties.

Sharon, the human resources director for Tempo Corporation, attempts to comply with the law in dealing with applicants and employees. One of the challenges Sharon faces is that the legality of an action is

sometimes clear.

Carrie Ann works at Paper Products, Inc. She considers taking home a few sheets of stationery so she can write letters to her ailing grandmother. Since Paper Products produces thousands of sheets of stationery every day no one will miss the few sheets she takes and company profits will not be affected. Carrie Ann then considers what would happen if every employee took some stationery home and decides not to take any. Carrie Ann is being influenced by

the categorical imperative.

Richard suspects his supervisor of unethical accounting practices. However, he does not want to lose his job if he reports the supervisor and the supervisor finds out who reported him. An important feature of online reporting systems like EthicsPoint is

the employee reporting the unethical behavior can do so anonymously.

Fred's Paper Shop frequently buys paper from Online Office Supplies, Inc. Online Office Supplies and Fred's Paper Shop decide to enter into a partnering agreement. One of the advantages of entering into a partnering agreement is that

the likelihood that disputes will arise under their contract is reduced.

Whirlwind Financial Corporation sends its executives to a resort in Mexico—at taxpayers' expense—to consider using the firm's cash to buy back its stock and thereby prop up the value. Many of its competitors are doing the same thing. One of the best ways to learn about the ethical responsibilities inherent in operating a business is to look at

the mistakes made by other companies.

Bob, research manager for CornAgri Products, Inc., applies utilitarian ethics to determine that an action is morally correct when it produces the greatest good for

the most people.

Bobbie claims that Carly breached their contract. Carly responds that she never intended to enter into a contract with Bobbie. The intent to enter into a contract is determined with reference to

the objective theory of contracts.

Cory believes that he and Dian agreed that he would act as her personal sports trainer for seven workout sessions. In a later dispute, the existence of any contract can be judged by

the parties' intent as expressed in their contract.

Phil agrees to work for Vacation Resorts, Inc., as a chef. In determining whether a contract has been formed, an element of prime importance is

the parties' intent.

In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc., applies her belief that all persons have fundamental rights. This is

the principle of rights.

Ryan, the owner of SuperMart Stores, Inc., adheres to the "principle of rights" theory. Under this theory, a key factor in determining whether a business decision is ethical is how that decision affects

the rights of others.

Mary works in the public relations department of New Trends Sales Company. Her job includes portraying New Trends's activities in their best light. In this context, ethics consist of

the same moral principles that apply to non-business activities.

Hailey, a lawyer on the staff of International Group, always considers the consequences of an action rather than the nature of the action itself when making ethical decisions in a business context. Hailey is applying

the utilitarian theory of ethics in business contexts.

Refer to Fact Pattern 10-1. The court is most likely to evaluate the adequacy of consideration if

there is a large disparity in the amount or value of the consideration exchanged.

Green Grocers, Inc., enters into a contract with Hiway Transport Company for the delivery of a shipment of fresh produce. In a later dispute between these parties over the delivery, the doctrine of quasi contract cannot be used because

there is an actual contract covering the subject in dispute.

Ergonomic Corporation convenes its employees for its managers to announce (1) a new company-wide ethical code of conduct, (2) an ad campaign to publicize the new code, and (3) the discharge of employees who do not adhere to the code. One of the most effective ways to set a tone of ethical behavior within a business organization is

to create an ethical code of conduct.

Michelle gives out a business card with an e-mail address on it. It is reasonable to infer that Michelle has consented to

transact business electronically.