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1. Busn 420 week 1 -7 Discussions
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Busn 420 week 1 -7 Discussions
Week 1 Discussions
May I Call You? (graded)
Congress enacted a restriction on telemarketing, known as the National Do-Not-Call list, which made it illegal for telemarketers
to place unsolicited commercial calls to consumers. A consumer may register up to three residential phonenumbers for thelist.
The Act does not prohibit calls from political campaigns and others seeking support for politicalcandidates, nor calls from
certain charities seeking donations. TheAct provides for significant financial penalties imposed by the Federal Communications
Commission on any telemarketer or company that violates the law. Some telemarketer organizations claim that the law is
unconstitutional.
Congress also enacted theCAN SPAM Act, prohibiting certain kinds of spame-mail nationwide. The CAN SPAM Act also
states that, “This act supersedes any statute, regulation or rule of a statethat expressly regulates the use of electronic mail to send
commercial messages, except to theextent that thestaterule prohibits deception in any portion of a commercial electronic mail
message or information attached thereto.” Subsequently, California enacted a new anti-SPAM law that applies to spame-mail
either sent from a server in California or sent to a California e-mail address.
What constitutionallaw issues do these statutes raise, and who should prevail? How, specifically, should the courts resolve these
constitutionalissues according to thecurrent stateof the law? What substantialgovernment interest is Congress attempting to
protect with theNational DNC List? Where is that found in U.S. Constitution?What other strategies could the government
employ to reach the same result?
diss 2
A Sobering Lawsuit (graded)
Fun Products, Inc. is in the business of designing computer games. At the end of a particularly successful year, company
management decided to throw a celebration party at which it would announce large bonuses for theentire workforce. The party
was held in thebanquet room of a localhotel, owned by the Milton Hotelchain, and was catered by the hotel, including an open
bar for all guests. Employees were also invited to bring a spouseor significant other. A good time was had by all, but too much
fun was had by a few, including Larry Lush, and his wife, Linda. Larry and Linda had attended other company functions at which
alcohol was served, and had a reputation for drinking a bit too much.
The company offered a free taxi ride home to any employee who had a bit too much to drink, but Larry and Linda declined the
free cab ride, and attempted to drive home in their own car. En route, Larry, who was driving, struck another vehicle, injuring
Veronica, the driver of that car. Larry has limited assets, and his insurance had just expired, as well as his driver’s license.
Veronica wants to sue Fun Products, Inc. and theMilton Hotel chain for her injuries, which include medical bills, lost wages,
property repair costs (her car), and pain and suffering. She also wants to obtain a court order prohibiting Fun Products, Inc. from
ever serving alcohol at a company function again.
Without trying to decide who will win if Veronica sues Fun Products, Inc. and the Milton Hotelchain, analyze the following.
Who are the parties to this lawsuit, and what are they called (trial level and appeallevel)? What types of law will Veronica’s
lawsuit involve? What typeof remedies is she seeking, and are theseremedies (or some of them) appropriateto this typeof case?
What legal sources will the court consider in deciding if Fun Products, Inc. and the Milton Hotelchain (or either of them) are

2. liable for Veronica’s injuries? What types of liability does Larry face as a result of this scenario? What burden of proof will
apply?What issues in this disputewould a jury decide (if the case went to trial), and what issues would a judge decide? What if
the person(s) with liability here doesn’t have themoney to pay Veronica’s damages?
Week 2 Discussions
Wendy Wanderer (graded)
Derek Dirt operates a home-based business selling herbs and supplements. Hefrequently receives new samples and is constantly
discarding unwanted samples, as well as packaging, old files, and other junk on a back yard trash heap that accumulates between
trash pick-ups. Little Wendy Wanderer, age five, who lives next door, sees what, to her, promises to be a nice toy among Derek’s
trash. Upon coming closer to the trash heap, Wendy is bitten by a rat. She screams and then faints. Her nearby mother calls an
ambulance, which, on the way to the scene, jumps a curb and strikes Paul Pedestrian, seriously injuring him. Wendy requires a
series of rabies shots. Except for some bad dreams, Wendy apparently recovers. Derek and Wendy are both citizens and residents
of Ohio. Paul, who is a citizen and resident of Texas, was visiting friends in Ohio when the ambulance struck him.
• Does Wendy have a solid basis for suing Derek for her injuries?
• Who might be liable to Paul Pedestrian?
• What types of damages could Wendy recover?
• If Wendy sues Derek, in what state(s) could she sue, and in what court (federal or state) could she properly filethe suit?
• If Paul sues Derek, in what state(s) could he sue, and in what court (federal or state) could he properly file thesuit?
diss 2
Bad Bar-B-Q (graded)
Over many years, Jake and Jo Bob built up a barbeque ribs business, Hambones, Inc., which caters picnics and parties and sells
ribs and corn at county fairs. They have several creditors, including Sauce Supply and First State Bank.
Two years ago, in reliance on an audit of the company’s books prepared by Hambones, Inc.’s accounting firm, Able &
Henderson, First State Bank made a loan to Hambones, Inc. It now appears that the audit failed to disclose financial improprieties
in Hambones, Inc.’s maintenance of its books: Certain liabilities were being carried off the books, causing Hambones, Inc.’s
bottomline to appear more favorable than it really was. Thedecision to carry the liabilities off thebooks was made by Jake and
Jo Bob, but there is now an argument as to whether a more careful audit would have uncovered the liabilities. Jake told the
accounting firm that the audit was being done at the bank’s request in order for the loan to be approved, and that it was really
important that thecompany receive a clean bill of health from the audit. Able & Henderson didn’t want to lose Hambones, Inc. as
a client.
Sauce Supply also knew that Hambones, Inc. had been audited and heard from Jake and Jo Bob that theauditors were very
satisfied with Hambones, Inc.’s financial position. Jake gave Sauce Supply’s president, Sandy Saucy, a copy of theaudit report.
Able & Henderson had no knowledge of thesestatements, or that Sauce Supply had received a copy of the audit report.
• What standard of care applies to Able & Henderson’s accounting work for Hambones, Inc.?
• Does Able & Henderson face any negligence liability to First State Bank or Sauce Supply in a statethat has adopted the
Ultramares rule?
• In a statethat has adopted theRestatement rule?
• In a statethat has adopted theReasonably Foreseeable User rule?
•
Week 3 Discussions
Fine Dining (graded)
You enter an expensive restaurant and are seated by the hostess. A waiter brings you plates, knives, forks, napkins, and other set-
ups for dinner, including bread and butter and ice water, all of which you partly consume. When you read the menu, you realize
that the prices far exceed what you can afford. You then make it clear that you do not intend to order a meal.
• What typeof contract (obligation) do you have, if any?
• What factors and contractual elements will you consider in assessing whether a contract was formed?
• What if, instead, you read the menu and place an order, but say nothing about agreement to pay. Is there a contract?
Also, assume there is fine print at the bottomof themenu that states:20% gratuity charged. $20.00 cover charge per table.
• If you ordered dinner but didn’t see the fine print, what is the effect?
• Does this change in thefacts alter your conclusion regarding the scenario above? Why or why not?
• What key factors and elements are at play?

3. This section lists options that can be used to view responses.
diss 2
Distant Deal Making (graded)
Maria, who lives in Seattle, sent Koji a letter via first class mail, stating, “Koji, I think your 2003 Ford SUV is worth $20,000. I
will give you $20,000 cash for it.” Koji receives the letter, but believes his car isn’t worth more than $14,000 due to the manner
in which he drives the vehicle and due to theweather in Florida where he resides.
Maria’s letter was mailed on Monday. When she didn’t hear from Koji by Wednesday, she sent an e-mail on Wednesday
afternoon with the same message, and asked whether he received her letter. Koji received Maria’s letter on Wednesday, but did
not receive the e-mail until Friday afternoon, due to server problems. In the meantime, Koji sent a fax late on Friday stating, “Are
you sure you still want to buy my car for $20,000? I accept your offer.”
On Saturday, after some research, Mariadecided theFord SUV was not worth what she thought. To make certain Koji would
know this fact, she sent Koji a letter via Federal Express stating, “Your SUV is not really worth $20,000.” On Monday morning,
Koji received the Federal Express letter from Maria. Also on Monday morning, an hour later, Maria received Koji’s fax at work.
• Has a contract been formed here? Why or why not?
• Identify and explain the stages of contract formation as they occurred in this scenario and analyzethem in this context from a
contract formation standpoint.
Week 4 Discussions
Dream House(graded)
• In a contract dated June 15, 2006, Bobby agrees to build your dream house on a lot you own near Naples, Florida. The contract
price is $500,000. The house is to be completed and ready for occupancy by March 1, 2007. Bobby is paid a progress payment of
$100,000, for labor and materials, in October, 2006. In November, 2006, a hurricane strikes theNaples area and floods the work
site. Bobby claims he had completed 50% of thejob before the hurricane struck. Thereafter, Bobby performs no further work and
walks off the job.
• On January 1, 2007, you declare Bobby to be in breach of contract and sign a contract with Sheila to complete thejob for
$350,000.
o Was your contract with Bobby a unilateral or bilateral contract; if unilateral, at what time did Bobby substantially undertake
performance?
o What remedies and/or damages are available to you and to Bobby?
o Since Sheila’s cost to complete the house is more than half thecost, who sees a loss from thehurricane?
diss 2
Nightmare House (graded)
• After months of combing the real estateads for a vacation property, you find an ad for a lovely Victorian cottage in a scenic
small town about three hours away. After viewing thehouse, you decide it is the perfect weekend place; and amazingly, the price
is in your budget. In fact, you’reamazed that the house is so affordable and has been on themarket for a while. You sign a real
estatepurchase contract to buy the house from the current owners, who have lived there for over 20 years. You make the sale
contingent upon an inspection of the property by alicensed construction engineer. The engineer inspects thehouse over the
course of two days and gives the house a clean bill of health. You proceed to closing, and buy thehouse.
• After moving in, you learn for thefirst time from the neighbors that many actively claim this house is possessed by poltergeists,
which the prior residents of the house had reportedly seen. In fact, thehouse is listed in a national guide to haunted houses, and
had previously been included in a walking tour of thetown as the haunted house. A newspaper article once described it as a
charming Victorian (with ghost). You now jump at every creak and noise the house makes. You want the seller of the house to
take it back for failing to inform you that thehouse is haunted.
o Do you have a good basis for rescinding thesale?
o What duties will you claim were owed to you by theseller?
o What responsibilities did you have as a buyer that may affect your ability to recover?
o What damages can you claim stem from the alleged failure to disclose by the seller?
o
Week 5 Discussions

4. Battle of theForms (graded)
Initial Text:Nellie Nimble, purchasing manager for Fast Color Paint Company, mailed a purchase order to AB Can Corporation
for 100,000 cans of high-gloss white paint at $15 per gallon wholesale. The order form mailed by Nellie contained 17 printed
conditions on its reverse side. The third condition stated:“Buyer may reject any defective goods within 30 days of delivery.”
The order form also stated that payment would be made as follows: 50% upon receipt of the goods, and 50% within 30 days of
the receipt of goods. AB Can (the seller) sent a signed letter confirming theorder, but the letter stated: “Any objection to goods
shipped must be in writing within five (5) days of receipt of goods.” AB Can’s letter specified thesame payment schedule as Fast
Color’s purchase order, but stated, in addition, “Interest at the rate of 12% per year will be charged on late payments.”Fast
Color’s purchase order said nothing about interest on late payments.
AB Can delivered thecans (100,000) and Fast Color sought to object to 10,000 of the cans as defective on the seventh day after
receipt of thecans. Fast Color paid 50% of theorder’s purchase price upon delivery but paid the balance (minus the 10,000 cans
it rejected) 40 days after delivery.
• Did Fast Color have the right to reject 10,000 cans, seven days after delivery?
• Does Fast Color owe interest on theportion of its payment that was not paid within 30 days of receipt of the paint order?
• Did the provision for interest on late payments materially alter the contract?
• What terms in AB Can’s purchase confirmation are additional terms, not mentioned at all in Fast Color’s order? (Explain your
rationale, and also statewhether you believe the outcome is fair.)
diss 2
Want to Lose Weight? (graded)
Initial Text:You’ve been hired as the marketing manager for a company that sells weight loss products to thepublic. The Federal
Trade Commission (FTC) recently brought an enforcement action against the company for violating theFTC Act’s prohibition of
unfair and deceptive trade practices, based on some of the company’s advertising. The company wants to challenge the FTC’s
ruling by appealing to thecourts. TheFTC’s ruling was based on thecompany’s ads for herbal teas (claiming they block
absorption of fat and will lead to substantialweight loss) and thecompany’s ad for a popular supplement (claiming they will
result in the loss of two pounds or more each week without dieting or exercising).
• What is the basis of the FTC’s power to regulate ads for diet products?What standards has the FTC established to determine if
a diet product claim is unfair and deceptive?
• If the company tries to challenge the FTC’s ruling by appealing to a court, what test will theappellate court use to determine if
the FTC’s ruling was justified? How do you think the court should decide this case?
• If the company wants to comply with theFTC’s regulations on diet product claims, what language would it need to change in
the ads mentioned above?
Week 6 Discussions
TraderRon.com (graded)
Initial Text:Dana and Ronnie operate a Web-based business, TraderRon.com, an Internet swap sitethat uses a Dutch auction
systempioneered by Priceline.com. TraderRon.com allows customers to make offers to other customers to swap such items as
their unused frequent flyer miles for other customers’ unwanted merchandise, including DVDs, music CDs, used books, and any
other merchandise customers might want to trade. No sales involving payment of money are made on the site. Some of the
merchandise that has been offered on the siteand swapped consists of bootleg or pirated merchandise, as well as designer
knockoffs. All of TraderRon.com’s income derives from advertising.
TraderRon’s websiteand advertising use a black and grey symbolto represent its swappingservice. It has used this symbol
consistently and registered it with the U.S. Patent and Trademark Office. Thesymbol is very similar to theNike swoosh symbol,
except it fades from black to grey from left to right. TraderRon.com uses a multimedia presentation to explain its operation to
users. Themultimedia presentation was created by a friend of Dana’s as his senior portfolio project at school, where he was
majoring in websitedesign and multimedia. Dana paid him with a free trip to theCaribbean, which she had won in a contest. No
copyright was registered in connection with the multimedia presentation.
TraderRon.com sends a weekly e-mail updateto customers who have registered on thesite. The e-mail is sent via an e-mail
address Ronnie established at Yahoo.com. TraderRon.com’s customers are located throughout the U.S. and some are overseas.
• What intellectual property and Internet law issues are raised by TraderRon.com’s business model?

5. • What sort of liability is thebusiness risking?
• What legal implications could arise from using theYahoo.com e-mail account for swap.com’s mass e-mailings?
diss 2
Modern Problems (graded)
Joel, a former employee of NetworkBank, an online bank, decided to exact some revenge. Though his official access to the
bank’s records was removed, he was able to hack into thebank’s database of customer information, obtaining passwords
associated with customer debit cards. Using debit card numbers and passwords, hepurchased merchandise online from various
venders, including online auction sites, such as eBay. Among the bank customers whoseaccounts he raided was Elle, a
consumer, and Pet Products, Inc., a business that sells pet products online. Joel took $85 from Elle’s checking account thefirst
time, which she didn’t notice until a week later, at which point shenotified NetworkBank. Joel took $350 from Elle’s account a
few weeks later, which she noticed the next day and immediately reported to the bank. Joel accessed Pet Products, Inc., just once,
for $3,450, which the company noticed the next day and reported to NetworkBank.
Joel also wanted revenge against a former NetworkBank employee, Gwen, who he believed to be responsible for his firing. She
left the bank and was working elsewhere. Using Internet search engines, he found postings that Gwen had made to chat rooms on
various Internet sites. Using this information, Joel contacted PrivateI.com, an Internet based information and investigation
service. He paid thefee required for an investigation on Gwen, and obtained her home and work addresses and telephone
numbers. PrivateI.com did not inquire why Joel wanted the information about Gwen. Joel followed Gwen as she exited her
workplace one night and attacked her, injuring her severely. Joel is now under arrest.
• What remedies do Elle and Pet Products, Inc. have against NetworkBank for the unauthorized fund transfers? What law
applies?
• What is the extent of liability for theconsumers in this scenario? May Gwen hold PrivateI.com liable for her injuries? Why or
why not?
• What preventative actions should thebusinesses mentioned in this scenario have undertaken to prevent what occurred here?
Week 7 Discussions
Rocking theBoat (graded)
• Initial Text:Duchess Cruise Lines, Inc. dry-docked a ship, intending to have maintenance done. Melinda, theship’s supply
manager, decided to purchase some needed supplies from MarineEquipment Services, Inc., on the ship’s behalf while it was in
dry-dock. She charged the supplies to her personal credit card. Thesupplies were delivered and used, but the cruise line refused
to reimburse Melinda for the cost of the supplies because she hadn’t obtained the required approvals before making the purchase.
Melinda takes theposition that doing so would have delayed the purchaseof the materials, because the person who normally
grants approvals was on leave for several weeks. The cruise line takes the position that someone else would have handled the
matter promptly if Melindahad simply followed company procedure. Melinda is threatening to sue to obtain reimbursement.
• Meanwhile, Steve, a member of theship’s maintenance crew, on shore leave for a day, came back to the ship late, after drinking
to excess. Before retiring for thenight, Steve turned several wheels on thedry-dock’s wall, which resulted in a flooding of the
tanks on one side of the dry-dock. The ship listed, slid off the blocks holding it up, then crashed against thedry-dock wall,
ruining much of the dry-dock. The dry-dock owner is suing Duchess Cruise Lines, Inc., for reimbursement of the damages to the
dry-dock.
• Paul was hired by Duchess Cruise Lines, Inc. as an independent project manager to coordinate thedry -dock maintenance
project. He was not an employee of Duchess Cruise Lines, Inc. and was not authorized to make any purchases or enter into any
contracts on the cruise line’s behalf. All of his proposals wereto be submitted to a management team for approval. After Steve
caused theship to slide off the blocks and crash into thedry-dock wall, Paul met on thesite with a crane company owner, Al,
telling Al that he was Duchess’ project manager and requesting a bid from Al’s company to move the ship to a new dry -dock
facility for repair. At the time, Paul was wearing a Duchess Cruise Lines, Inc. jacket and directing various employees on the
dock. Al provided a bid, Paul accepted it, and Paul signed a services contract with Al’s company, signing his name followed by
the words, “Project Manager, Duchess Cruise Lines, Inc.” Duchess Cruise Lines, Inc. did not approvethehiring of Al’s company
and refuses to pay Al’s company on thecontract. Paul claims he has no personal liability because he was acting on Duchess’
behalf in an emergency.
o What agency law issues does this scenario raise?
o How should the courts decide thesedisputes?Why?
o How could all of this have been handled to prevent some of these issues?
o

6. diss 2
A Sweet Business Idea (graded)
Initial Text:Dan and Carla met as employees at a candy company and later married. Carla went on to study accounting and Dan
earned a business degree. After working for various businesses and raising $10,000 to open their own business one day, Dan and
Carla have settled on opening a business that makes custom centerpieces that look like floral arrangements but are made entirely
of chocolates, marzipan, and other candy. They want to call their business “Edible Expressions,” and they have prepared a
business plan. They are now faced with thedecision of what form of business organization makes the most sense: a sole
proprietorship, apartnership of some sort, or incorporating in some form.
Dan and Carla both plan to do design work in the business, while hiring confectionery employees to prepareand assemble the
company’s products. Carla will keep the books, and Dan will do thehiring. Carla and Dan are considering whether it makes more
sense for them to co-own the business, or if one should be theowner and theother an employee. They anticipatehiring just one
other employeein thebeginning, and grow as demand requires. Carla’s brother and sister-in-law also want to invest in the
business, but do not want to be involved in its operations. Dan and Carla also want to give their daughter, Alissa, age 12, some
ownership in the business at some point.
Dan and Carla want to establish their business with a minimum of paperwork and expense, but they also want to avoid high
taxation of their business profits. They want to run the business jointly, without theneed for a Board of Directors or other
advisory group, though they don’t mind the idea of having an annual event to honor family members who have invested in their
business.
Consider the types of business organizations in this week’s reading (sole proprietorship, general partnership, limited partnership,
LLP, and corporation, LLC).
o What are thepros and cons of each as they apply to Dan and Carla’s business goals?
o If Dan and Carla were operating in your state, what form of business organization appears most desirable? Why?
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