- Ruby’s Ribs is a small barbecue restaurant just off interstate 95 in South Carolina. While Ruby often gets tourist trade from the interstate, most locals prefer more traditional places farther from the noise and commotion, and Ruby’s Ribs has been struggling. As so many small-business owners do, Ruby used her personal credit card to purchase business supplies. In early 2017, she purchased a new rib smoker and accessories from a local restaurant supply store, and charged it on her card. Less than three months later, however, the business folded and Ruby declared bankruptcy. The credit card company has disputed the discharge of the debt for the smoker, arguing that it was a luxury good purchased too close in time to the bankruptcy petition.
a. Should the debt for the smoker be discharged? Explain.
2. Desirae works for Chicken Coop, Inc. and has been tasked with finding suitable property for the company’s expanding chicken breeding division. Desirae and her husband are also looking for land to build a house. Desirae found several acres of land just south of the Maryland/Virginia border that would be an ideal location for either Chicken Coop’s expansion or for a new home for Desirae and her husband.
a. What duties does Desirae owe Chicken Coop? Can she purchase the property for her own home? Explain.
3. Scott and Cathy Thompson have eight children, each of whom participate in social and sports activities. It became much more convenient for the family schedule when the children were old enough to drive themselves and their siblings to practices and events. As soon as each child obtained a driver’s license, Scott made keys to the family cars for that child and presented them on a key chain that held a picture of the family. Scott said this would help the young drivers remember how important safety was to the entire family. The oldest Thompson daughter, Dora, was recently involved in an accident with the family minivan, which is titled in Scott and Cathy’s names.
a. Will they be held liable for Dora’s accident? How does their state of residence impact your analysis?
4. Marjorie was recently hired to drive a deliver van for Pick-em-up Delivery Co. (PDC). Marjorie must provide her own van, which must meet specific size, design, and color requirements of the contract. Each day, PDC gives Marjorie a group of packages to deliver, and she must deliver them all within the specific time ranges that PDC has provided its customers, but the company does not tell her what hours she must work, what route to take, or when she can or must take breaks. PDC does encourage drivers to take the shortest routes, to save gas and money, and similar cost-saving admonitions. Marjorie’s delivery area may be changed by PDC with five days’ notice. She is paid based on a combination of factors, including how many packages are delivered, punctuality, and other performance-based parameters. The contract between Marjorie and PDC is an independent contractor agreement. Is Marjorie an employee-agent or an independent contractor-agent of PDC? Explain.
5. The city of Marshall promotes officers in its police department based in part on the results of a written test. To avoid racial bias, the city hired a highly qualified outside consultant to create, monitor, and score the tests and produce the promotion list. Although the test was properly created, no black officers were high enough on the list to be promoted. The city was concerned that if it promoted only white or Latino officers, the black officers would sue, so the city invalidated the test results. As a result, none of the white or Latino officers at the top of the list were promoted either. Johnson, a white office, and Martinez, a Latino officer, then sued the city. 1. If the black officers had sued, what type of discrimination would they have alleged? Explain. 2. What type of discrimination could Johnson and Martinez allege. Explain. 3. Differentiate between the two types of suits.
6. Jeremy and Rene recently graduated college and started a business to market an app that Rene developed. Both had student debt to repay. Jeremy owns a ten-year-old truck, and Rene uses public transportation. They started the business in Rene’s apartment using computers and smartphones they already own. What form should they use for their new business? Explain your choice, and what steps Jeremy and Rene should take to create the business.
7. Scott recently accepted a position with RST consulting as an agent. Discuss his duties as an agent.
8. Differentiate between express actual authority, implied actual authority and apparent authority.
9. Explain an LLC, and discuss the advantages and disadvantages of its formation.
10. Bart drives a delivery van for a local florist. One afternoon, after his last delivery but before returning the van to the florist shop to pick up his personal vehicle, Bart stopped at Walmart to make a layaway payment on toys he is buying his children for Christmas. Because he expected to be away from the van only a few minutes, he left the van running, but did set the emergency brake. While Bart was in the store, the brake slipped, and the van rolled across the parking lot, pinning a woman between her car and the van, resulting in severe injuries. The injured woman is suing the florist shop for negligence. What would be the result?
11. Iowa Corn Co., Mid-Iowa Grains, and Center Cut Feeds all produce and sell cattle feed to beef producers throughout the Midwest. They are concerned that one of their customers, Bob’s Big Beef, is driving down prices. By doing so, Bob’s is forcing other beef producers to lower their prices, and they, in turn, are demanding that the feed suppliers reduce prices as well. The three feed producers have decided to not sell any more feed to Bob’s Big Beef.
Is this antitrust behavior? If so, what type? What standard will a court use to review the feed producers’ actions?
12. What are corporate bylaws, and what do they establish?
|13. Define a corporation and discuss the advantages and disadvantages of the formation.14. Margolis was the vice president of Real Estate, Inc. and recommended that the directors of the corporation purchase a particular piece of property for the company’s new manufacturing plant. Four of the eight directors on the board are also members of a separate LLC that owned the property. This fact was not disclosed to the rest of the board. The directors voted unanimously to purchase the property on the same day Margolis made the recommendation. The price that Real Estate, Inc. paid for the property was 30 percent above the fair market value at the time of the board’s vote. Did this transaction violate the business judgment rule? What issues are raised here?15. Alison and her cousin Alec are both CPAs and have been in business together as partners for ten years. Now that they are successful—with the families and personal assets to prove it—they are concerned about being held personally liable for the partnership’s obligations. How can they address those concerns?
|16. 6. Solar Solutions manufactures and installs solar panels and other “clean energy” products, so the Environmental Protection Agency (EPA) was surprised when a company employee reported to the agency that Solar was dumping toxic chemicals, used in the manufacture of the solar panels, into a nearby underground cavern system. 1. What tools does the agency have to investigate these reports? 2. How will the agency demonstrate it is not overstepping its investigative powers? 3. If the agency finds violations and prosecutes Solar Solutions and its executives, will they have the same Constitutional rights as criminal defendants? Explain.
|17. R. W. Davis Co. and Oyster Bay Inc. are corporations organized under the laws of the Commonwealth of Virginia. R. W. Davis Co. owns large tracts of property along the shores of the Chesapeake Bay in Virginia and Maryland. Davis keeps some of the land for its own use and sells real estate contracts for the rest. Davis sells the land for a uniform price per waterfront foot and conveys title to the purchaser when the full purchase price had been paid. Most purchasers of the land lease it back to Oyster Bay Inc., a service company that will grow oysters in the adjacent waters, and harvest, pool, and market the oysters, providing profits to the purchasers of the land. Oyster Bay holds “full and complete” possession of the land specified in the services contract and leaves the purchasers of the property no right of entry and no right to the oysters that are grown and harvested. In its advertising materials, Davis stresses the experience and superiority of Oyster Bay’s service. Davis markets the land through a resort hotel it owns in Virginia Beach and promises significant profits in its sales pitch to those who express interest in the oyster beds. Most purchasers of the land are not Virginia residents or watermen. Most often, they are business and professional people inexperienced in aquiculture and lacking the skill or equipment to tend to the oyster beds by themselves. Must R.W. Davis Co. and Oyster Bay Inc. register their contracts as securities? Explain.18. George borrowed money from a local lender but has stopped making payments. The lender sold the loan to Collect-It, a debt collection agency. Collect-It called George, but he wasn’t home, so Collect-It discussed the debt with George’s wife Amal. What law covers this situation? Is Collect-It’s discussion with George’s wife permitted?19. Shari and Carlton live outside a small but bustling city in Ohio. They are looking to invest in property just outside of town, hoping to build a housing development on the land to meet the growing needs of the community. There is a 100-acre parcel just beyond the city limits that used to hold a small manufacturing business, but that company declared bankruptcy and shut down about 20 years ago. What environmental concerns should Shari and Carlton have as they consider purchase and development of this property?20. In recent years, the FTC has expanded its guidance regarding deceptive advertising to include ads on social media and mobile devices. Discuss what issues have been included in the updated Dot Com Disclosures, focusing on those issues that are unique to electronic media and devices. How might this limit marketers?