Business Law for Accountants
Chaz works for Bridge Builders, Inc. While working on a Bridge Builders project, Chaz is injured. Under state workers' compensation laws, Chaz will be compensated only if his injury was
accidental.
Blanche, a salesperson for Custom Restaurant Equipment, Inc., shows Dylan, a buyer for Eat n' Dine Company, display items in Custom's showroom, stating that any purchased equipment will match the display. This statement is
an express warranty
FasTite Tool Company employs workers, including Gina, at six locations in two states. FasTite's discharge of Gina outside the terms of an implied employment contract may result in
FasTite's liability for breach of contract.
Frozen Foods Packaging & Sales Company allows on-site, work-hour solicitations for charitable causes. During a union election campaign, the company prohibits similar time and place solicitations by Food Packagers International Union, which is seeking the workers' unionization. This violates
Federal Labor Law
Floris, an agent for Grover, enters into a contract on Grover's behalf with Hong that must be in writing to be enforceable under the Statute of Frauds. Failure to comply with the equal dignity rule, with respect to this contract, can make the contract voidable at the option of
Grover
Metro Hospital, Inc., employs New Collection Company as an agent for the collection of Metro's unpaid accounts. While garnishing O'Shea's wages, New Collection misstates the amount and collects too much. O'Shea can recover from
Metro or New Collection.
Mantas Moderno Company, which is based in New York, agrees to sell fifty woven carpets, imported from Mexico and currently stored in New Jersey, to NuDecor, Inc., which is based in Connecticut. If the contract does not indicate where the goods will be delivered, the place of delivery is
New Jersey
Ester is a current employee of Fiber Optics, Inc. Gage, a former Fiber Optics employee, is currently unemployed. To collect unemployment compensation, Gage must
be willing and able to work.
Sugar & Spice, Inc., and Taste Treats stores enter into a contract for a sale of confections. Sugar & Spice, a merchant who deals in goods of the kind sold, makes express warranties in connection with the sale. Under the UCC, at the time a contract is formed, an express warranty can be disclaimed or modified
by clear, conspicuous language called to the buyer's attention.
Norton grants a general power of attorney to Olena to locate potential real estate investment opportunities on Norton's behalf. This power will terminate on Norton's
death or incapacity.
Asian Noodle Company contracts to sell 1,000 cases of rice noodles to Bob's Bistros, Inc., but later refuses to deliver. Due to a rice shortage, Bob's Bistros cannot obtain the noodles elsewhere. The buyer's right to recover the goods from the seller is the right of
replevin
Hydro Source Company contracts to sell pumps, tanks, and water storage systems to Inflo Irrigation, Inc. Before the goods are delivered, Inflo indicates that it will not be able to pay. Hydro Source can
resell the goods and recover any damages from Inflo
Siera is an agent for Toxic Waste Handlers Corporation. Toxic Waste owes Siera the duty of
safe working conditions.
Termination of Offers
- Death of Offeror - Bankruptcy - Illegality
Types of Offers
- Options 1. Paid-for offers 2. Consideration required 3. Irrevocable
Cameron buys a motorcycle from Blammo Motors. Cameron soon discovers that the cycle has a defect that significantly affects its value and use. To sue Blammo under the UCC, Cameron must commence an action for breach of contract within
4 years
Under Common Law you have to have
A price
Banquets & Parties (B&P) contracts to buy 1,000 uninflated balloons from Gas Bags, Inc., for $1 per item. When the market price decreases to 50 cents per balloon, B&P refuses to go through with the deal. Gas Bags can resell the goods and recover
$1000-$500=$500
Berry indicates that she is acting as an agent on behalf of an unidentified client—Cuisine Catering, LLC—when she enters into a contract with Désean. Liability to Désean for nonperformance of the contract may be imposed on
Berry and Cuisine Catering
To FIX a broken window
Common Law
Tract of Land
Common Law
60 days if Hill would promise to refrain from suing Dye during this TIME
Consideration = not revocable
Eliza buys a new motorcycle from Fab Cycles, Inc. The most important factor in determining whether an express warranty is created is whether
Fab Cycles's promise becomes part of the basis of the bargain.
Olivia, an agent for Precision Paving Corporation, enters into an unauthorized contract with Quality Asphalt, Inc., purportedly on Precision Paving's behalf. Precision Paving does not ratify the contract. In this situation, a court can impose liability on
Olivia to Quality Asphalt for misrepresenting her authority.
Private Security Service employs Olsen as an agent. Without Private Security's knowledge but otherwise acting within the scope of employment, Olsen commits a crime. The state can successfully prosecute
Olsen.
Refined Mills orders "Grade A" oats from Sweet Valley Farms to grind and sell to Town Co-op Grocery. Sweet Valley ships "Grade B" grain, which Refined Mills accepts. To recover damages for the nonconformity, Refined Mills must give notice of the breach within a reasonable time to
Sweet Valley.
Motor Vehicle Assembly Corporation operates a plant near the border between the United States and Mexico. Due to the location, it would be easier for the company to employ noncitizens. In this circumstance, it is legal for a U.S. employer to
The IRCA makes it illegal to hire, recruit, or refer for a fee someone not authorized to work in this country. Through Immigration and Customs Enforcement officers, the federal government conducts random compliance audits and engages in enforcement actions against employers who hire undocumented workers.
Safe4U Lenses, Inc., assures ThruVu Optical Company that Safe4U's lenses will not crack within a certain range of pressure. ThruVu buys the lenses to prescribe to its customers. When cracks develop within the stated range, ThruVu files a suit against Safe4U. The court is most likely to rule in favor of
ThruVu, because Safe4U's statement was an express warranty.
Digital Enterprises, Inc., a data analysis firm, wants to hire Ernesto, a noncitizen. A temporary work visa is most likely to be set aside for a noncitizen who is
a "person of extraordinary ability."
Cali, acting within the scope of her authority for the Dessert Bake Shop, contracts with Eden Valley Orchards to buy an assortment of fruit. Dessert Bake is liable on the contract, and Cali is not, if Dessert Bake is
a disclosed principal.
Game Source Stores are open to consumers. The UCC requirement of good faith imposes
a higher duty on Game Source than on consumers.
Berry indicates that she is acting as an agent on behalf of an unidentified client—Cuisine Catering, LLC—when she enters into a contract with Désean. Cuisine Catering is
a partially disclosed principal
Rudi is a minor. In most states, Rudi may not be
a principal
Household Cleaning Products Company agrees with its employees' union not to buy any nonunion-produced goods from other firms for use in Household Cleaning's warehouse and distribution centers. This is
a prohibited secondary boycott.
Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. Refer to Fact Pattern 18-A1. Flat Bread's refusal is
a repudiation of the contract.
Food & Gift Basket Company currently employs five hundred full-time workers and two hundred part-time seasonal workers. Because business has declined, Food & Gift plans to close a plant that employs more than fifty full-time workers. Advance notice of the layoff must be sent to
affected workers or their union representative.
Watercraft, Inc., employs Vladimir as a sales agent for a trial period. At the end of the period, Watercraft and Vladimir disagree on the amount of the commissions Vladimir is due for sales that he made. Vladimir may demand
an accounting.
Jim agrees to act on Joyce's behalf, subject to her control, and Joyce trusts Jim to so act. They set out the terms in a written document, which they both sign. This is
an agency by agreement.
Roberta introduces Steve to her friends as "my associate." Steve purports to act as Roberta's agent in several business transactions with those friends. If Roberta is liable for Steve's actions, it will be because their relationship is
an agency by estoppel.
Emery is a corporate officer of Frakking Mining Corporation. Emery serves in a representative capacity for Frakking's owners. With respect to binding Frakking Mining to contracts, Emery is
an agent and has the authority.
Reynaldo is a delivery driver for Southeast Asian Noodle Company. Reynaldo does exactly what the company tells him. Reynaldo is
an employee.
Aisha is an employee at Bento Food Mart. Aisha is called for jury duty and as a result cannot work her scheduled shift. Bento fires Aisha. With respect to the employment-at-will doctrine, this is
an exception based on public policy
Kramer goes to Lawn & Garden to tune up his mower. Martin, the service technician, learns that Kramer's lawn is overgrown and rocky and advises the use of a certain type of oil, plug, filter, and blade. Later, while Kramer is mowing his lawn, the mower breaks down due to the use of the items recommended by Martin. Kramer may recover from Lawn & Garden for breach of
an implied warranty of fitness for a particular purpose.
Sigrud buys spiked mountain-climbing shoes from Rockridge Gear store. Rockridge does not know that Sigrud plans to wear the shoes to climb Tower Mountain. When Sigrud is on the mountain, the spikes come out of the shoes, causing her to fall and be injured. Rockridge breached
an implied warranty of fitness for a particular purpose.
Dimitri, a certified public accountant and an investor, and Elinor, an insurance salesperson and a realtor, may create an agency relationship for
any legal purpose
Based on Oona's conduct, Porcio reasonably believes that Qasim has the authority to act on Oona's behalf even though Qasim does not have the actual authority to do so. In this circumstance, Qasim has
apparent authority.
Music, Inc., sells fifty MP3 players to Noise Stores, Inc. To avoid liability for most implied warranties, in some states Music could simply state in writing that the players are sold
as is
Fruit of the Plant, Inc., agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op. Fruit of the Plant can obtain only half of the quantity ordered, so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price. Grange Co-op rejects the lesser quality seed. With time for performance not yet expired, Fruit of the Plant can
attempt to cure the defect.
Vida is a purchasing agent for Wholesome Foods with the authority to buy grain up to a certain quantity. After the grain is bought, the agency relationship terminates
automatically
Equipment Rents Company and Road Builders, Inc., enter into a contract for a lease of excavators. Equipment Rents is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises
automatically in lease contracts.
Vehicle Wholesale Company and Walt's Retail Motors enter into a contract for a sale of used cars. Vehicle Wholesale assures Walt's that it has valid title to the vehicles. Under the UCC, warranties of title arise
automatically in most sales contracts.
Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires. Good Tire is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises
automatically in sales contracts
Precision Parts, Inc., and Quality Auto stores enter into a contract for a sale of specific auto parts. Precision Parts ships parts that do not meet the specifications. Quality Auto
can reject the entire shipment.
Business Travelers Hotel Corporation hires Conagher, a real estate agent, to locate hotel properties for the company. Conagher learns of a hotel available for $3.2 million, informs Business Travelers, and makes an offer of $2.9 million on Business Travelers's instruction. The offer is rejected. Conagher
complied with all of the agent's duties to the principal.
Commercial Leasing Corporation and Quarry Construction Company enter into a contract for a lease of three excavators. Under the perfect tender rule, Commercial Leasing must ship or tender goods to the lessee that
conform to the contract description in every way.
Devon takes temporary family leave from her job at Equipment Rentals & Sales Company to care for a family member with a serious injury incurred as a result of military duty. Refer to Fact Pattern 10-1A. During the leave, under the Family and Medical Leave Act, Equipment Rentals & Sales must
continue Devon's health-care coverage
Spicy Wonder Hot Dog Vendors, Inc., grants its agent Teona an exclusive territory in which to sell Spicy Wonder Hot Dog products. Spicy Wonder Hot Dog cannot compete with Teona in that territory under the principal's duty of
cooperation
Outpost Farm Supply and Pablo enter into a contract for a sale of chicken feed. Circumstances make it difficult for Outpost to perform, and the contract is breached. Pablo looks for remedies. Unlike the common law, under the UCC, remedies are
cumulative
Nadya and Owen work at Purified Water Company. Nadya is a sales representative who works with Purified's customers, including restaurants, grocery stores, and other businesses, as well as individual consumers. Purified closely supervises all of its sales reps, and dictates their schedules. Owen is an engineer who works in Purified's water treatment plant. With respect to third parties, Owen is Purified's
employee BUT NOT an agent.
Nadya and Owen work at Purified Water Company. Nadya is a sales representative who works with Purified's customers, including restaurants, grocery stores, and other businesses, as well as individual consumers. Purified closely supervises all of its sales reps, and dictates their schedules. Owen is an engineer who works in Purified's water treatment plant. With respect to third parties, Nadya is Purified's
employee and agent.
Romero employs Supplies Procurement Service as an agent under a written agreement that describes the rights and duties of both parties. This is
express authority.
Home Remodelers, Inc., and Imogen enter into a contract for a sale of cabinets and countertops. Home Remodelers, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably
fit for the ordinary purpose for which such goods are used.
HandiTools, Inc., sells power tools, power tool parts, and related supplies under "full" warranties. Under the Magnuson-Moss Warranty Act, this means that HandiTools must provide
free repair or replacement of any defective part.
Alexandra manages a Beans Bistro for Coffee Shops, Inc. To manage the business, Alexandra's authority can be inferred
from the position Alexandra occupies.
Gold Medical Supply Company and Home & Hospice Care, Inc., enter into a contract for a sale of health care equipment and supplies. Under either a shipment contract or a destination contract, the seller must
give the buyer any necessary documents of title.
Global Talk Corporation sells phones and other mobile devices. Under most circumstances, Global Talk will be presumed to have warranted that its title to the goods is
good and valid
Construction Products Company and Dante enter into a contract for a sale of bricks and stones. Construction Products knows the purpose for which Dante will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises
if the buyer is relying on the seller to select suitable goods.
Hunter is seventeen years old. Under the Fair Labor Standards Act, Hunter cannot work
in a hazardous occupation.
Quince owns a used-car lot where Ray works as a salesperson. Quince tells Ray not to make any warranties for the cars. To make a sale to Sylvia, however, Ray adds a 50,000-mile warranty. Later, Sylvia sues Quince for breach of warranty. Quince's right to hold Ray liable for any damages he has to pay is the right of
indemnification
John contracts with Kelly to buy a certain number of cattle for Kelly's Circle K ranch. John makes a deal with Lawson, the owner of a local herd, and makes a down payment. Kelly fails to pay the rest of the price. Lawson sues John for breach of contract. John's right to hold Kelly liable for any damages that he has to pay is the right of
indemnification.
Rachel is an agent for Sports Logo Merchandise, Inc. Rachel makes an innocent misrepresentation when entering into a contract on behalf of Sports Logo with Team Marketing & Sales Corporation. Sports Logo
is directly responsible for Rachel's misrepresentation.
Emmett, an agent for Fridley, signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax. The government prosecutes Fridley for failing to pay the tax. He is
liable, because notice to Emmett is notice to Fridley.
Pat's Pet Houses, Inc., sells shelters for animals under "limited" warranties. Under the Magnuson-Moss Warranty Act, this means that the warranties on the shelters from Pat's
limit the buyers' recourse in some fashion.
Lighter Than Air, Inc., and Mario enter into a contract for a sale of a hang glider. Lighter Than Air, a merchant who deals in goods of the kind sold, makes implied and express warranties in connection with the sale. The Magnuson-Moss Warranty Act was designed to prevent deception in warranties by
making warranties easier to understand
Avis is an officer of Budget Building Materials Corporation. With respect to binding Budget to contracts, Avis's authority
may be actual or apparent.
Leon, Mia, Nestor, and Orina are employees of different-sized employers in different industries. Under the Fair Labor Standards Act, all employees in covered industries must be paid per hour
minimum wage.
Greg, a salesperson for Home Improvement Center, tells Irena, "This is the best floor sander I've ever seen." This statement is
puffery
Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can
recover from Big Dig for breach of warranty.
River Gear Company and Tours & Trips, Inc., enter into a contract on August 1 for the sale of fifty inflatable river rafts. Tours & Trips cancels the contract ten days later. River Gear is unable to sell the rafts to another buyer. River Gear can
recover the contract price from Tours & Trips but must hold the rafts for it.
Farmland Creamery enters into a contract for the sale of dairy products to Gourmet Delis, Inc. When Farmland learns that Gourmet is insolvent, Farmland can stop delivery of the goods in transit
regardless of the quantity.
Ocean Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a boat. Ocean is a merchant who deals in goods of the kind sold. The goods are defective. Under the UCC, the implied warranty of merchantability is breached
regardless of what Ocean knew or could have discovered.
Kelvin is an agent for Lookout Mountain Accountants, Inc. On Lookout Mountain's behalf and at its request, Kelvin pays Nerdlinger for custom software designed for the management of Lookout Mountain's services. Kelvin's right to obtain the amount of those payments from Lookout Mountain arises under the principal's duty of
reimbursement
Seed Packets, Inc., a city and suburban garden seed company, requires its customers to pay by check. Taylor, a Seed Packets driver, tells customers that they can pay her with cash. When Seed Packets learns of Taylor's collections, it takes no action to stop it. Taylor steals some of the cash. Under the doctrine of apparent authority, Seed Packets will most likely
suffer the loss.
Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. Refer to Fact Pattern 18-A1. Enriched can
terminate the contract and seek damages.
Churchy hires Danielle, a real estate broker, to act as his agent to sell his land for $150,000. Oil is discovered beneath the land, causing its market value to increase considerably. The agency agreement is likely
terminated by operation of law.
Olga hires Parnell, a real estate broker, to act as her agent to sell her house. The house burns down before being sold. The agency agreement is likely
terminated by operation of law.
Dakota Energy Company employs Evan to negotiate the purchase of mineral rights for future mining projects. Evan secretly buys some of the property and sells it to Dakota at a profit. Evan has breached
the agent's duty of loyalty
Brenda, a salesperson at a Cabinets & Countertops store, tells D'Antoni, a customer, "Buy your cabinets here, and I'll install them for half of what the store would charge." D'Antoni buys the cabinets, which Brenda installs for half the store's price. Brenda keeps the money. Brenda has breached
the agent's duty of loyalty.
Drink Dispensers, Inc., contracts for the sale of soda vending machines to Evan's Quik Stop stores. Drink Dispensers repudiates the contract. Evan's recovery of damages is measured at the time
the buyer learned of the breach.
OnlineSales.com uses an electronic agent, or e-agent, to take a purchase order from a consumer over the Internet. The e-agent fails to provide an onscreen confirmation of the order. The effect of any error in the order can be avoided by
the consumer.
Precious Stones, Inc., and Sparkling Jewelry stores enter into a contract for a sale of gemstones. Precious Stones does not deliver. The buyer can normally recover as damages the difference between
the contract price and the market price.
HomeBaked Bread Company hires Ike to sell the company's products in a certain area. HomeBaked Bread agrees to pay Ike a salary, plus commission, for a trial period. They also agree that Ike can sell using any methods and during any hours that seem appropriate. The key factor in whether Ike is HomeBaked Bread's employee is
the control HomeBaked Bread has over the details of the work.
Truckers Dispatch Network, LLC, provides its employees with an e-mail system. The company notifies them that it will monitor their communications over the system. Some employees file a suit against their employer, claiming a violation of privacy. The court is most likely to hold that, with respect to communications over the e-mail system,
the employees did not have a reasonable expectation of privacy.
TackMaker, Inc., and Silver Stallion Stables enter into a contract for a sale of bridles, saddlery, and other equine equipment. TackMaker delivers, but Silver Stallion does not pay. TackMaker can normally recover as damages
the purchase price plus incidental damages.
Banquet Furnishings, Inc., and Christina enter into a contract for a lease of tables, chairs, and items for a wedding reception. Banquet Furnishings, a merchant who deals in goods of the kind sold, generally describes the goods, details technical specifications, and shows a sample. Under the UCC, if these are inconsistent
the sample takes precedence over the general description.
Rancho Amarillo and Bulls & Heifers Company enter into a contract for a sale of one hundred head of cattle. When Bulls & Heifers does not deliver within a reasonable time after the agreed on delivery date, Rancho Amarillo files a suit for breach. Bulls & Heifers asserts the doctrine of commercial impracticability. This doctrine extends only to problems that are
unforeseeable
Limon, an agent for Mindwonder Games LLC, executes an unauthorized contract with NOW Marketiog, Inc. The deal is highly advantageous to Mindwonder, and the company ratifies the contract. The contract is
valid
Chemical Refining Corporation hires Disposal & Recovery Company to work as an independent contractor. Whether Chemical Refining will be liable for torts committed at the site by Disposal & Recovery depends on
whether unusually hazardous activities are involved.
If you make one change in contracts
you have made a counteroffer