139 terms


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
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
Charles, president of DrinkUp Fresh Beverages, Inc., does not apply utilitarianism to business ethical issues. One problem with utilitarianism is that it
tends to justify human costs that many find unacceptable
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
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
Made4U Goods, Inc., asks its employees, many of whom are members of the National Machinists Union, to apply the utilitarian theory of ethics. This theory does not require
the acquiring of the means of production by workers
Fealty Credit Corporation asks its employees to evaluate their actions and get on the ethical business decision-making "bandwagon." Guidelines for judging individual actions include all of the following except
loopholes in the law or company policies
In business deals, Fiona, the chief executive officer of Glazed Donuts, Inc., follows duty-based ethical standards. These are most likely derived from
philosophical reasoning
Steele Toole Company's decision makers view a particular risk in the use of Steele's product as open and obvious. Continuing to market the product without telling consumers of the risk could be justified from a perspective of
utilitarian ethics
Superior Energy Corporation engages in ethical behavior solely for the purpose of getting good publicity and thereby increasing profits. Superior is
not acting unethically
Dion, an accountant for Entertainment Sports, Inc., attempts to apply a duty-based approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person must
avoid unethical behavior regardless of the consequences.
Spencer Hydraulics Corporation's ethics committee is asked a business ethics question¾should the firm bid low to obtain a contract that it knows it can fulfill only at a higher price? A practical method to investigate and solve this question involves all of the following steps except
The Federal Trade Commission (FTC) is a government agency that issues rules, orders, and decisions. The Georgia state legislature enacts statutes. The Jackson County Board and the Peach City Council enacts ordinances. Administrative law includes
the rules, orders, and decisions of the Federal Trade Commission.
Vacation Village enacts an ordinance to allow only a few street vendors to operate in certain areas, for the purpose of reducing traffic. A court would likely subject this ordinance to
a "rational basis" test under the equal protection clause
Beachside City enacts an ordinance that bans the distribution of all printed materials on city streets. Carl opposes the city's latest "revenue-enhancing" measure and wants to protest by distributing handbills. In his suit against the city, a court would likely hold the printed-materials ban to be
an unconstitutional restriction of speech
Mary claims that a Nebraska state statute infringes on her "procedural due process" rights. This claim focuses on
procedures used in making decisions to take life, liberty, or property.
In Ben v. City 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 Daphne v. Even Steven Auto Deals, Inc., a case with similar facts. Under the doctrine of stare decisis, the trial court is likely to
allow the minor the Daphne case to cancel the contract
Lewis is a state court judge. Like other judges, Lewis often refers to secondary sources of law for guidance. These sources include`
official comments to statutes
A Minnesota state statute restricts certain kinds of advertising to protect consumers from being misled. A court would likely hold this statute to be
constitutional under the First Amendment.
Mike, an advocate of a certain religion, publishes an article in New Times magazine insisting that Congress base all federal law on his religion's principles. The First Amendment guarantees Mike's freedom of
religion, speech, and the press
Tori files a suit against the state of Utah, claiming that a Utah state law violates the commerce clause. The court will agree if the statute
imposes a substantial burden on interstate commerce
Orin claims that a Pennsylvania state statute infringes on his "substantive due process" rights. This claim focuses on
the content of the statute
The Constitution provides that no person shall be deprived of "life, liberty, or property without due process of law." Under this clause, "persons" include
corporations and other "legal persons."
Wisconsin, like other states, may regulate private activities to protect or promote the public order, health, safety, and general welfare under its
police powers
Congress enacts a law prohibiting toys made in China from being sold in the United States. The Hawaii state legislature enacts a law allowing the sale of Chinese-made toys. Hawaii's law will most likely be
rendered invalid under the supremacy clause
The Securities Exchange Commission is an administrative agency. The chief purpose of such agencies is to
perform specific government functions
In Export Co. v. Imports, Inc., there is no precedent on which the court can base a decision. The court can consider
public policy or social customs and values
In Harley's suit against Irma, the parties meet before going to trial, and each party's attorney argues the party's case before the other party. A third party renders an opinion as to how a court would likely decide the dispute. This is
a mini-trial
Owen, in Pennsylvania, and Quik Jobs, Inc., in Maryland agree to have their dispute resolved in arbitration according to the law of Virginia. This is a ground for a court to
do nothing
Lora files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio
is a more convenient location to hold the trial
Moby, a resident of New Jersey, has an accident with Ogden, a resident of New York, while driving through that state. Ogden files a suit against Moby in New York. Regarding Moby, New York has
in personam jurisdiction
Kit loses her suit against Lou in a Minnesota state trial court. Kit appeals to the state court of appeals and loses again. Kit would appeal next to
the Minnesota supreme court
In Ed's suit against First National Bank, the discovery phase would include all of the following except
Ed's complaint
Olsen Grocery Company files a suit against Pickle Products, Inc. Pickle responds that even if Olsen's statement of the facts is true, according to the law Pickle is not liable. This is
a motion to dismiss
Emil wants to initiate a suit against Fast Credit Company by filing a complaint. The complaint should include
a statement of the grounds for the court to exercise jurisdiction
Jo files a suit against Lara in a Missouri state court. Lara's only connection to Missouri is an ad on the Web originating in Nebraska. For Missouri to exercise jurisdiction, the issue is whether Lara, through her ad, has
conducted substantial business with Missouri residents
Sam, a citizen of Tennessee, files a suit in a Tennessee state court against United Sales Corporation, a Wyoming company that does business in Tennessee. The court has original jurisdiction, which means that
the case is being heard for the first time
The Idaho Supreme Court rules against Jiffy Mart in a case against Kwik Stop Stores, Inc. Jiffy Mart files an appeal with the United States Supreme Court. The Court does not hear the case. This
means that the Idaho court's decision is the law in Idaho
In Fancy Frills Corporation's suit against Glamour Stores, Inc., the jury returns a verdict in Fancy's favor. Glamour files a motion asking the judge to set aside the verdict and begin new proceedings. This is a motion for
a new trial
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.
Refer to Fact Pattern 3-1. Resolving the dispute between Java and Kaffe by having a neutral third party render a binding decision is one of the advantages of
Sam, an engineer, supervises the construction of a new bridge. When the bridge collapses due to faulty construction, Sam is sued by those injured in the collapse. As a professional, Sam is held to the same standard of care as
other engineers
Bella owns a farm in Colorado. Doyle drives his sport utility vehicle off a highway and onto Bella's land. Doyle commits trespass if he
does not have Bella's permission to drive on the property
Joy invites Ken into her apartment. Ken commits trespass to land if he
refuses to leave when Joy asks him to go
As a joke, Jem takes Kyla's business law textbook and hides it so that Kyla cannot find it during the week before the exam. Jem may have committed
trespass to personal property
Louis⎯larger and stronger than Mica⎯threatens to hit Mica before hitting and injuring him. Mica files a suit against Louis for assault and battery. Mica will most likely recover for
assault and battery
Drake pushes Evon into the path of an oncoming car driven by Flip. Gina tries to rescue Evon. Drake is liable for any injuries to
Evon, Flip, and Gina
Leon files a suit against Moira, a medical doctor, alleging negligence. As a physician, Moira is held to the standard of
a reasonable physician
Jaqy distributes a handbill among her neighbors accusing one of them⎯Ked⎯of being a convicted sex offender. The statement is defamatory only if
the statement is false
George has a badly infected right foot. Herb, George's physician, prescribes amputation. George agrees. During the operation, Herb amputates the left foot. In George's suit against Herb, George's best theory for recovery is
res ipsa loquitur
OK Dry-Cleaning advertises so effectively that the regular customers of its competitor Purity Cleaners patronize OK instead of Purity. This is
none of these choices
An Iowa state statute requires amusement parks to maintain equipment in specific condition for the protection of patrons. Jack's Fun Park fails to maintain its equipment. Key, a patron, is injured. Jack's has committed
negligence per se
Kai files a suit against Lana based on one of Lana's statements that Kai alleges is fraudulent. To give rise to fraud, the statement must be one of
Jean is playing a computer game on a bad disk that melts in her drive, starting a fire that injures her hands. Jean files a suit against K-Tech, Inc., the game's manufacturer. K-Tech is held liable under the doctrine of strict liability. A significant application of this doctrine is in the area of
product liability
In newspaper ads, Lo-Price Autos falsely accuses My-T Value Vehicles, a competitor, of selling stolen cars. My-T's sales decrease. Lo-Price has most likely committed
slander of title
Kelly is injured when she slips and falls on Layla's sidewalk. To determine whether Layla owed a duty of care to Kelly, Layla is subject to the standard of
a reasonable person
Dian, a clerk at an Entertainment Unlimited store, takes a DVD player from the store without permission. Dian is liable for
Toni files a suit against Universal Media Corporation for defamation. Actual malice must be shown for recovery of damages if Toni is
a public figure
Ike pushes Joan, who falls and breaks her arm. Ike is liable for the injury
if Ike intended to push Joan.
Beans Coffee & Cocoa Company makes and sells a chocolate-flavored coffee drink under the name "CoCoCafe." Darkroast Java, Inc., later markets a similar tasting drink under the name "KoKoKafe." This is most likely
trademark infringement
Kay and Leo copy and exchange MP3 music files over the Internet without anyone's permission. With respect to songs owned by Natural Recording Company, this is
copyright infringement
Cathy uses, on her new recording Drive By, the exact note-for-note melody of a song written by Earl without his permission. This is
copyright infringement
In 2010, Sara writes Terror at the Track, a novel about racecar driving. Sara does not register the work with the appropriate government office. Under federal copyright law, Sara's work is protected
for the life of the author plus seventy years
In 2010, Online Marketing Corporation registers its trademark as provided by federal law. After the first renewal, this registration
is renewable every ten years
Pola develops a new espresso machine, which she names "Quik Shot." She also writes the operating manual. Pola can obtain trademark protection for
the name
Trek Transport Company uses a mark associated with its name to distinguish its services from those of other trucking firms. This mark is
a service mark
Fiona invents a new deep-sea fishing net, which she names "Great Catch." She also writes the operating manual to be included with each net. Fiona could obtain copyright protection for
the operating manual
Ric designs a new computer hard drive, which he names "Sci Phi." He also writes the operating manual to be included with each final product. Ric could obtain patent protection for
the hard drive
Canada and the United States are signatories of the Berne Convention. Doug, a citizen of Canada, publishes a book first in Canada and then in the United States. Doug's copyright must be recognized by
all of the signatories of the Berne Convention
Phil invents "PhutureNow," new Web site design software, and applies for a patent. If Phil is granted a patent, his invention will be protected
for twenty years
Home Products Company and House & Yard, Inc., use the mark "Good Housekeeping Seal of Approval" to certify the quality of their products. Home Products and House & Yard are not in business together and do not own this mark. This mark is
a certification mark
Ernie's Good Eatin' Cafe uses a distinctive decor, layout, menu, and style of service. This restaurant's image and overall appearance is
trade dress
Ross e-mails Super Snowboard Company's marketing campaign to Winter Sports Corporation, Super's competitor, without its permission. This is
a theft of trade secrets
Modern Clothing, Inc., and National Denim Corporation use the mark "Made by Members of the U.S. Textile Workers Union" on the tags of their products to indicate the participation of the union in the manufacture. Modern and National are not in business together and do not own this mark. This mark is
a collective mark
Li'l Canine Company (LCC) uses a trademark that neither LCC nor anyone else has registered with the government. Under federal trademark law, LCC
can register the mark for protection
Omar sends Nell an e-mail ad touting software that will cloak its user in "the anonymity of the Internet." Nell pays Omar for the software, which is never delivered to her. This is online
retail fraud
Harvey puts up a guitar for bids on eWay, a Web auction site. Faith makes the highest bid and sends the payment, which Harvey receives, but he does not send the guitar to her. This is online
auction fraud
Jean sends e-mail to Irwin promising a percentage of the amount in an African bank account for assistance in transferring the funds to a U.S. bank account. Irwin forwards his account number, but the funds are never sent. Instead, Jean quickly withdraws the funds in Irwin's account. This is
online fraud
Iggy uses his computer to break into Hye Technology Company's computer. Iggy is
a hacker
Elisa steals Filbert's personal information from Filbert's computer. This is computer crime in which the computer is
the subject of the crime
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
Boris programs software to prompt a computer to continually crash and reboot. Boris's goal is to install this program on various companies' computer systems without the companies' knowledge. The program can reproduce itself, but must be attached to a host file to travel from one computer network to another. This program is
a virus
Travis sends Una a link to a purported e-birthday card that when clicked on downloads software 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
Maksum floods virtual mailboxes with unsolicited junk e-mail, consisting of ads and other messages. This e-mail is
Sierra digitally copies "Rampage" and other recent films without the authorization of the owners and transfers those copies freely to others via file-sharing Web sites. This is
Via e-mail, Vern makes repeated credible threats to Ursula that put her in reasonable fear for her safety. This is
cyber stalking
In relation to Edie's solicitation of investors in a nonexistent business, she is charged with "mail fraud." This requires, among other things,
mailing or causing someone else to mail a writing
Vance points a gun at Workman, threatening to shoot him. Workman hits Vance, causing his death. Charged with homicide, Workman can successfully claim as a defense
Mary, who is charged with a crime, claims that Nick, a government agent, entrapped her. For entrapment to be a valid defense
all of these choices
Bob is arrested at his home, after the police search it and seize certain property to be used as evidence. A judge sets Bob's bail, as required by a state statute, and Bob is put on trial. The U.S. Constitution provides safeguards against all of the following except
trying someone for a criminal offense
Page points a knife at Ray's daughter, threatening to hold her hostage and "cut" her unless Ray takes a certain file from Skelter Supplies Corporation, his employer. Charged with theft, Ray can successfully claim as a defense
Dirk, an employee of Ergonomic Elevators, Inc., pays Ferbie, an employee of Ergonomic's competitor G-Force Risers Company, for a secret G-Force pricing schedule. This is
commercial bribery
Vladimir is a "payday" lender charged with filing false claims in bankruptcy proceedings against his customer-debtors. The standard of proof to find a defendant who has been charged with a crime guilty is
beyond a reasonable doubt
Ira signs Jill's name, without her authorization, on the back of a check made out to her. This is
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
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
Leah gains access to government records and alters certain dates and amounts in her favor. This is
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
Rick manages an illegal gambling operation in his Sushi Bar & Grill. Rick reports the profits of the gambling operation as income from Sushi's legitimate activities on its tax returns. This is
money laundering
Britney, an employee of Computer Associates, is arrested at work. A grand jury issues a formal charge against Britney for larceny. This charge is
an indictment
Eli obtains a consumer loan from First State Bank at an interest rate that exceeds the state's maximum. First State has
violated the usury laws
Ralph offers to sell Sophie, who is seventeen years of age, a car about which Ralph intentionally misrepresents several material facts. In reliance on the misrepresentations, Sophie buys the car. To prove fraud in this transaction, Sophie would have to show that
ralph intentionally deceived sophie
Cross-Country Trucking Company contracts with Baldwin to transport crated goods to a certain destination for $5,000. Cross-Country delivers the crates, but Baldwin does not pay. Cross-Country learns that the crates contained stolen goods. Cross-Country can
recover $5,000 from Baldwin.
A court adjudicates Huck mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Huck signs a contract to sell his farm to Kyle for its real market value. The contract is
On Tom's eighteenth birthday, he decides that he no longer wants to keep a car he bought from Select Autos, when he was seventeen. His right to disaffirm the deal will depend on
whether Tom acts within a reasonable period of time
Elle buys a new textbook for $100 and a used car for $5,000, and signs a one-year lease for an apartment for $1,000 monthly rent to start at the beginning of the next month. The Statute of Frauds covers
the apartment lease and the car purchase only
Neil represents himself as a contractor in Ohio, but he is not licensed in that state. A contract between Pam and Neil by which Neil agrees to build a warehouse for Pam in Ohio is
not enforceable
Mica, a minor, signs a contract to pay Natural Health Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is
Hillside Homes, Inc., and Ideal Builders, Inc., enter into a construction contract that includes six pages of detailed calculations. Later Hillside, whose project manager compiled the figures, discovers that some numbers were multiplied incorrectly, but Ideal refuses to make changes. A court would most likely
allow the parties to rescind the contract
Uri and Vicky orally agree on the sale of Uri's Nite Club to Vicky and note terms on a pair of the Club's napkins, which they both sign. A written memorandum evidencing an oral contract that would otherwise be unenforceable must contain
the essential terms
Lara induces Moe to enter into a contract for the sale of an apartment about which Lara fraudulently misrepresents a number of material facts. Lara tells Moe that her commission is 6 percent, but their signed, written contract states "12 percent." The Statute of Frauds governs
contracts that must be in writing to be enforceable
Ollie buys a cup of coffee for $2, a magazine for $5, and a boombox for $600. The requirement of a writing for the enforceability of a contract for a sale of goods at, or for more than, a certain price is governed by
the uniform commercial code
Intoxicated but fully aware of the consequences, Uri agrees to a two-year cell-phone service contract with Wander Talk, Inc., at more than the average market price. This contract is
Dave's Hobby Town and Eva's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Eva a discount on purchases from Dave's store if Eva will not tow the cars of Dave's customers who park in Eva's lot.
Refer to Fact Pattern 8-1. Dave's discount is legally sufficient consideration
because it is a promise of something of value.
Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule and the Uniform Electronic Transactions Act (UETA), Relay's acceptance by e-mail will be considered effective when
Mayfair Company offers to sell a certain mall to Galleria Stores, Inc., for a certain price if it accepts before 10 a.m. Monday. A contract is formed if Galleria's acceptance is received
before 10 am monday
Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury.
Refer to Fact Pattern 8-3. The agreement between Dex and Carmen is
a release
Mica buys "Nature," a movie, through Open View, an online entertainment vendor. Before completing the purchase and downloading "Nature," Mica must review a warning not to make and sell a copy of it. This warning is
a browse wrap term
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
GR8 Marketing Company and Hot Tunes, Inc., sign a document that states GR8 agrees to create a marketing campaign for Hot and Hot agrees to pay GR8 for the service. GR8 and Hot have
an express contract
Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injury.
Refer to Fact Pattern 8-3. In Carmen's suit against Dex to recover her repair and medical expenses, Carmen will most likely recover
Saf-T Storage, Inc. (SSI), offers to sell a warehouse to Richfield Investments. Richfield says that it will pay SSI $100 to hold the offer open for three business days. This
makes the offer irrevocable for three days if SSI accepts
Baked Goods Company agrees to supply Comida Café with all the corn chips that it requires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Baked Goods asks Comida to pay a higher price for the chips. This request is
valid due to the unforeseen difficulty of the sudden price increase
Fabio, a user of GameCenter.com's Web site, can download gaming software for free if he first clicks on "I accept" after viewing certain terms. This is
a contract that includes the terms
On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had
a unilateral contract as soon as Outdoor began to perform
Opie offers to sell his guitar to Pinky for $100. Pinky agrees. They complete and sign a printed form that includes, near the blanks for their signatures, the word "seal." This is
a formal contract
Kris contracts to work exclusively for Little Manufacturing Company during May for $5,000. On April 30, Little cancels the contract. Kris finds another job during May but earns only $3,000. Kris files a suit against Little. As compensatory damages, Kris can recover
Frank and AgriShip, Inc., enter into a contract for AgriShip to transport a silo of soybeans for which Frank agrees to pay. When AgriShip's schedule conflicts, the firm contacts Hybrid Transport Company, to which AgriShip "assigns all rights under the contract." This transfer is
an assignment and a delegation
Superb Toolmakers, Inc., contracts to sell its business to True Hardware Corporation. Before either party has performed, rescission of this contract requires
a mutual agreement to rescind
Mikayla enters into a contract with Logan to provide surface material for Mikayla's tennis courts by April 1 for a tournament to begin May 1. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is
a reasonable estimate of the loss on a breach.
Trudy and Uri enter into a contract for the sale of Trudy's house for which Uri agrees to pay her $250,000. Uri wants to transfer his right to the ownership of the house to Val, his niece. This transfer generally
cannot be prohibited
Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager for two years. If Rig breaches the contract, Scott has a duty to
reduce the damages that Scott might otherwise suffer.
Esther and Faisal agree that Esther will fix Faisal's car in exchange for his paying a preexisting debt owed by Esther to Gladys. Gladys is
an intended beneficiary
Drew contracts to sell a residential duplex to Evan. The contract provides that if Drew does not close the deal by September 15, he must pay Evan one-half of the contract price. This provision is not enforceable because it is
a penalty clause
McCall and Teresa enter into a contract for the distribution of McCall's produce to local restaurants for which Teresa agrees to pay. McCall transfers his right to payment under the contract to Midtown Bank. This transfer is
an assignment
Mona and Nero want to discharge their contract by executing and performing a new agreement. They can best accomplish this by
accord and satisfaction
Mona contracts to repair a computer for NuData, Inc. (NDI). Mona knows that without the computer, NDI will lose a sale. Mona does not perform as promised. NDI files a suit against Mona. As consequential damages, NDI can recover
the loss of profit from the lost sale
Belle enters into a contract to subdivide and sell housing lots in Cole's hillside field if Dell City annexes the property within the next year. Belle's duty to perform is
Vicky contracts with Warren for the delivery of hospice services to benefit Xavier. This is
a third party beneficiary contract
Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up Restaurant. If BRI completes most of the work promised in the contract, its performance will be