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This is business law but it is not an available option for subjects. Questions 6 & 7 from
Anderson's Business Law and the Legal Environment of Business 24th edition
6 - In the late 1980s, Life Energy Resources, Ltd. (LER), a New York corporation, was a
multilevel marketing network. LERs marketing plan provided that members of the general public
could purchase its products only through an official LER distributor or by becoming LER
distributors themselves. Each potential distributor had to be sponsored by an existing distributor
and was required to sign a distributorship agreement with LER stating that he or she would not
make medical claims or use unofficial literature or marketing aids to promote LER products.
Ballistrea and his partner Michael Ricotta were at the top of the LER distribution network. Two
products sold by LER were the REM SuperPro Frequency Generator (REM) and the Lifemax
Miracle Cream (Miracle Cream). The REM, which sold for $1,350 to distributors, was a small
box powered by electricity that ran currents through the feet and body of the user. Ballistrea and
Ricotta distributed literature and audiotapes to many potential downstream distributors and
customerssome of whom were under-cover government agentstouting the REM and the Miracle
Cream. Other literature claimed that the Miracle Cream could alleviate the discomforts of
premenstrual syndrome and reverse the effects of osteoporosis. The Food and Drug
Administration charged Ballistrea and Ricotta with violating federal law for making medical
claims concerning LER products. Their defence is that they never sold any of the products. They
simply earned commissions as part of the marketing scheme and could not be held criminally
liable on the charges. Are they correct? [United States v. Ballistrea, 101 F.3d 827 (2d Cir.)]
7 - Carriage Homes, Inc. was a general contractor that built multifamily residential and land-
development projects in Minnesota. John Arkell was Carriage Homes chief executive officer,
president, and sole shareholder. Carriage Homes built Southwinds, a condominium development
of 38 residential units in Austin, Minnesota. The foundation elevations of some of the
Southwinds units were lower than permitted under the State Building Code, causing stormwater
to pool in the units driveways and garages. The city of Austins development director sent Arkell
a series of seven letters in 1999 and 2001 concerning the elevation problems, and Arkell gave the
letters to the project managers, who failed to resolve the problems. Minnesota makes a violation
of the State Building Code a misdemeanour. On May 30, 2001, the state charged Carriage
Homes and Arkell with three misdemeanour counts each, alleging a violation of the Uniform
Building Code (UBC). Carriage Homes pleaded guilty and was sentenced to a $1,000 fine. But
Arkell pleaded not guilty, asserting that he could not be held criminally responsible for the
violation. After a bench trial, the district court found Arkell guilty. He was sentenced to pay a
fine, pay restitution to the condominium owners, and serve 90 days in jail, with 80 days stayed
pending his compliance with sentencing conditions. Mr. Arkell appealed on the grounds that the
employees and subcontractors had simply not followed his orders and he was not responsible for
their failures. Is he correct? [State v. Arkell, 657 N.W.2d 883 (Minn. App.)]

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This is business law but it is not an available option for subjects..pdf

  • 1. This is business law but it is not an available option for subjects. Questions 6 & 7 from Anderson's Business Law and the Legal Environment of Business 24th edition 6 - In the late 1980s, Life Energy Resources, Ltd. (LER), a New York corporation, was a multilevel marketing network. LERs marketing plan provided that members of the general public could purchase its products only through an official LER distributor or by becoming LER distributors themselves. Each potential distributor had to be sponsored by an existing distributor and was required to sign a distributorship agreement with LER stating that he or she would not make medical claims or use unofficial literature or marketing aids to promote LER products. Ballistrea and his partner Michael Ricotta were at the top of the LER distribution network. Two products sold by LER were the REM SuperPro Frequency Generator (REM) and the Lifemax Miracle Cream (Miracle Cream). The REM, which sold for $1,350 to distributors, was a small box powered by electricity that ran currents through the feet and body of the user. Ballistrea and Ricotta distributed literature and audiotapes to many potential downstream distributors and customerssome of whom were under-cover government agentstouting the REM and the Miracle Cream. Other literature claimed that the Miracle Cream could alleviate the discomforts of premenstrual syndrome and reverse the effects of osteoporosis. The Food and Drug Administration charged Ballistrea and Ricotta with violating federal law for making medical claims concerning LER products. Their defence is that they never sold any of the products. They simply earned commissions as part of the marketing scheme and could not be held criminally liable on the charges. Are they correct? [United States v. Ballistrea, 101 F.3d 827 (2d Cir.)] 7 - Carriage Homes, Inc. was a general contractor that built multifamily residential and land- development projects in Minnesota. John Arkell was Carriage Homes chief executive officer, president, and sole shareholder. Carriage Homes built Southwinds, a condominium development of 38 residential units in Austin, Minnesota. The foundation elevations of some of the Southwinds units were lower than permitted under the State Building Code, causing stormwater to pool in the units driveways and garages. The city of Austins development director sent Arkell a series of seven letters in 1999 and 2001 concerning the elevation problems, and Arkell gave the letters to the project managers, who failed to resolve the problems. Minnesota makes a violation of the State Building Code a misdemeanour. On May 30, 2001, the state charged Carriage Homes and Arkell with three misdemeanour counts each, alleging a violation of the Uniform Building Code (UBC). Carriage Homes pleaded guilty and was sentenced to a $1,000 fine. But Arkell pleaded not guilty, asserting that he could not be held criminally responsible for the violation. After a bench trial, the district court found Arkell guilty. He was sentenced to pay a fine, pay restitution to the condominium owners, and serve 90 days in jail, with 80 days stayed pending his compliance with sentencing conditions. Mr. Arkell appealed on the grounds that the
  • 2. employees and subcontractors had simply not followed his orders and he was not responsible for their failures. Is he correct? [State v. Arkell, 657 N.W.2d 883 (Minn. App.)]