Business Law


Business Law

1.        Pedestrian shoe Company hired Angela, age sixteen, to work during the summer.  Angela was to solicit orders from shoe stores in her home town to buy shoes wholesale from Pedestrian.  Pedestrian agreed to pay Angela $1.00 for each pair of shoes ordered through her.  Angela was so successful that she hired Beth, age 25, to help, and promised to pay Beth $.50 for each pair of shoes order through her.


a.    Is Angela an agent for Pedestrian?


b.    Can Beth properly treat as void her appointment as an agent of Angela and submit her orders directly to Pedestrian for the larger compensation?



2.    Antonia wants to buy a car. The dealer permits her to take an automobile home to show her mother. On the way home, she gets into an accident. Is Antonia an agent for the dealer?



3.        Jon Cady hired Telfair Realty to find a buyer for his home.  On July 8, an offer to purchase was presented to Jon Cady.  This offer was signed “Reta May Johnson by Jared Johnson, son” as purchaser, and was accompanied with a cashier’s check for $5,000 marked “earnest money.”  After studying the offer, Jon Cady accepted it and signed the agreement; closing was scheduled for August 25.  On that date, the purchaser did not appear.  Reta May notified the seller that she did not intend to complete the transaction.  She requested that her earnest money be refunded since she was not bound to the sales contract.  She argued that her son was not authorized in writing to bind her to a real estate sales agreement.  Jon Cady and Telfair Realty sued to recover their respective damages resulting from this alleged breach of contract.  Is Ms. Johnson liable for breach of contract?



4.        New World Fashion provides guidance to persons interested in entering the retail clothing business.  Anderson was hired as a sale representative of New World.  After several month of working for New World, Anderson decided to start a competing business.  However, prior to resigning, Anderson encouraged one of New World’s prospective clients to contract with Anderson personally.  He then provided to this client the type of services typically furnished by New World.  Upon discovery of these facts, New World fired Anderson and sued him to recover lost profits.  Will Anderson be held liable to New World for the financial gain he obtained in the transaction?



5.        Amos was the sales manager for Plenty Company, a turkey-packing company.  As a member of the management group, Amos was consulted on all phases of the business.  He persuaded the company to enter into a contract to buy 20,000 turkeys, but concealed for some time the fact that he was the seller of the turkeys.  Plenty did not carry out the contract, and Amos brought suit.  Can Amos enforce the contract?



6.        Peterson’s Florist Company hired Alex to deliver floral arrangements.  One day while on delivery, Alex fell asleep and hit a telephone pole.  The damage to the delivery van cost $1,600 to repair.  Can Peterson’s Florist Company recover this amount from Alex?

7.    Perry hired the Creditor’s Collection Agency to collect overdue accounts.  Perry informed the agency that Terry owed $500 for merchandise received.  In fact, Terry owed only $400.  However, the agency collected the entire $500 (because Terry was also mistaken about the amount owed), which it then paid to Perry.  Later, Terry discovered the overpayment.

a.    Perry has to repay Terry the overpayment.

b.    Creditor’s Collection Agency has to repay Terry the overpayment.

c.    Both Perry and Creditor’s Collection Agency are responsible to pay Terry                           for the overpayment.

d.    Too bad for Terry.  He doesn’t have a right to get his money back from                      either Perry of Creditor’s Collection.



8.    Patricia listed her home for sale with Rex, a real estate broker, under a listing contract that gave Rex the exclusive right to sell this house for three months.  The listing agreement provided that if Rex brought a customer who was ready, willing, and able to buy the house for a price that Patricia would agree to, she would pay Rex a commission equal to 6% of the sales price. During this time, Patricia sold her house to a friend who did not know Rex.  Patricia refused to pay Rex any commission because Rex was not the procuring cause of the ready, willing and able buyer.  Is Rex entitled to a commission?



9.    Gresham was a property manager, responsible for all aspects of several commercial buildings.  Oxford operates a janitorial service and cleans commercial buildings.  Oxford contracted with Gresham to clean several buildings on a regular basis.  Oxford believed that Gresham owned the buildings and did not realize that Gresham was only an agent hired to manage those buildings.  Gresham failed to make several payments owed to Oxford.  When Oxford sued Gresham for the money owed, Gresham argued that he was not liable since he was merely an agent.  Is Gresham correct?



10.                  Pat, the owner of a grocery store, hires Amy to manage one store.  Pat tells Amy to stock the store.  Imagine three different scenarios; in one, Pat also tells Amy be sure to buy soup; in another, Pat tells Amy to not buy soup; and in a third, Pat says nothing to Amy about soup.  In each situation, Amy then orders 40 cases of soup from Tom, who delivers the soup and sends and invoice for payment.  In which situations, if any, is Pat liable to Tom?


a.    In the first situation only.

b.    In the first and third situation.

c.    In all three situations.

d.    In none of the situations.



11.                   Sam was an employee of Munchie Company.  Sam’s job was to drive an ice cream truck and sell ice cream from the truck.  One day the truck stalled, and Sam asked Ted and his friends to push the truck.  They agreed, and Sam gave each of them a can of whipped cream as compensation for their help.  Ted’s can exploded and injured his eye.  Ted sued Munchie Company, which argued that Sam was acting outside of his employment at the time he gave Ted the can of whipped cream.  Will Ted prevail?



12.  While serving as outside auditors for the consulting firm of Stern, Stewart & Co., KPMG discovered how much money Stern, Stewart was earning from its financial management and incentive compensation consulting practice.  KPMG sent six of its employees to a Stern, Stewart seminar to learn about this consulting practice.  It then hired two of Stern, Stewart’s consultants and started its own competing business.

a.  KPMG violated the duty to keep its clients information confidential.

b.  KPMG violated the duty to not compete with its principals.

c.  KPMG violated its duty to not deal secretly with its principal.

d.  KPMG did not violate any duty owed to its principal.



13.    Kurt asked his car mechanic, Quinn, for help in buying a used car. Quinn recommends a Ford Focus that she has been taking care of its whole life. Quinn was working for the seller, who paid Quinn $100 for helping him sell the Focus. Which of the following statements is true?

(a)  Quinn must pay Kurt the amount of money she received from the Ford’s prior owner.

(b)  After buying the car, Kurt discovers it needs $1000 in repairs.  He may recover that amount from Quinn, but only if Quinn knew about the needed repairs before Kurt bought the car.

(c)  Kurt cannot recover anything because Quinn had no obligation to reveal her relationship with the car’s seller.

(d)  Kurt cannot recover anything because he had not paid Quinn for her  help



14.      Figgins is the dean of a college. He appointed Sue acting dean while he was out of the country and posted an announcement on the college website announcing that she was authorized to act in his place. He also told Sue privately that she did not have the right to make admissions decisions. While Figgins was gone, the admissions committee voted not to admit Wilma, the daughter a very wealthy alumnus.  Sue overruled the committee and sent a letter to the Wilma telling her that she was admitted for the following year. Does the Wilma have the right to attend this college?

(a)  No, because Sue was not authorized to admit her.

(b)  No, because Figgins did not ratify Sue’s decision.

(c)  Yes, because Figgins was a fully disclosed principal.

(d)  Yes, because Sue had apparent authority.



15.                  Gerald came to work, dressed in a new suit that he bought for his first job.  Several employees complimented him on how nice the suit was as he made his way to his desk.  His boss came in to visit with him … but stopped short at the door to his office.  He glared at Gerald’s tie, and then at his own.  The two of them were wearing the identical tie!  His boss became red in the face, and shouted “Out!  Get out!  You’re fired!!!”  Can Gerald successfully pursue a claim against his employer for firing him because he wore the same tie as his boss?



16.                  When Gerald started his next job, he met with the Director of Human Resources who gave him a copy of the company policy manual.  It had provisions in it concerning appropriate attire for work, insurance benefits available to employees, and for time off for vacations.  It also had a clause in it that read as follows:  “Probationary Period.  During the first 90 days of you employment, either you or the company can terminate the employment relationship at any time, for any reason, or for no reason at all.”  After Gerald had worked at the new company for four months, he got a new supervisor.  His new supervisor called him to his office, and noticed that he and Gerald were wearing the same tie.  Yep.  Poor Gerald got fired.  Again.  Can Gerald successfully pursue a claim against his employer for firing him because he wore the same tie as his supervisor?



17.                  Gerald started on his third job.  After working there for two months, he came to work and looked at the company’s announcements, posted on a bulletin board in the kitchen.  The second announcement stated that Gerald was fired because management learned that he was living with his girlfriend.  Can Gerald successfully pursue a claim against his employer for this?



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