YOU BE THE JUDGE WRITING PROBL

YOU BE THE JUDGE WRITING PROBLEM Linda and Eddie had two children before they were divorced. Under the terms of their divorce, Eddie became the owner of their house. When he died suddenly, their children inherited the property. Linda moved into the house with the children and began paying the mortgage that was in Eddie’s name. She also took out fire insurance. When the house burned down, the insurance company refused to pay the policy because she did not have an insurable interest. Do you agree? Argument for the Insurance Company: Linda did not own the house; therefore, she had no insurable interest. Argument for Linda: She was harmed when the house burned down because she and her children had no place to live. She was paying the mortgage, so she also had a financial interest.

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YOU BE THE JUDGE WRITING PROBLEM Eileen Murphy often cared for her elderly neighbor, Thomas Kenney. He paid her $25 per day for her help and once gave her a bank certificate of deposit worth $25,000. She spent the money.

Murphy alleged that shortly before his death, Kenney gave her a large block of shares in three corporations. He called his broker, intending to instruct him to transfer the shares to Murphy’s name, but the broker was ill and unavailable. So Kenney told Murphy to write her name on the shares and keep them, which she did. Two weeks later, Kenney died. When Murphy presented the shares to Kenney’s broker to transfer ownership to her, the broker refused because Kenney had never endorsed the shares as the law requires—that is, signed them over to Murphy. Was Murphy entitled to the $25,000? To the shares? Argument for Murphy: The purpose of the law is to do what a donor intended, and it is obvious that Kenney intended Murphy to have the $25,000 and the shares. Why else would he have given them to her?

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YOU BE THE JUDGE WRITING PROBLEM Frank Deluca and his son David owned the Sportsman’s Pub on Fountain Street in Providence, Rhode Island. The Delucas applied to the city for a license to employ topless dancers in the pub. Did the city have the power to deny the Delucas’request? Argument for the Delucas: Our pub is perfectly legal. Further, no law in Rhode Island prohibits topless dancing. We are morally and legally entitled to present this entertainment.

The city should not use some phony moralizing to deny customers what they want. Argument for Providence: This section of Providence is zoned to prohibit topless dancing, just as it is zoned to bar manufacturing. There are other parts of town where the Delucas can open one of their sleazy clubs if they want to, but we are entitled to deny a permit in this area

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YOU BE THE JUDGE WRITING PROBLEM Two shareholders of Bruce Co., Harry and Yolanda Gilbert, were fighting management for control of the company. They asked for permission to inspect Bruce’s stockholder list so that they could either solicit support for their slate of directors at the upcoming stockholder meeting, attempt to buy additional stock from other stockholders, or both. Bruce’s board refused to allow the Gilberts to see the shareholder list on the grounds that the Gilberts owned another corporation that competed with Bruce. Do the Gilberts have the right to see Bruce’s shareholder list? Argument for the

Gilberts: If shareholders of a company have a proper purpose, they are entitled to inspect shareholder lists.

Soliciting votes and buying stock are both proper purposes. Argument for Bruce: The Gilberts are simply offering a pretext. They could use this information to compete against the company. No shareholder has the right to cause harm.

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YOU BE THE JUDGE WRITING PROBLEM Asher and Stephen owned and worked for a corporation named “Ampersand” that produced plays. Stephen decided to write Philly’s Beat, focusing on the history of rock and roll in Philadelphia. As the play went into production, however, the two men quarreled. Stephen resigned from Ampersand and formed another corporation to produce the play. Did the opportunity to produce Philly’s Beat belong to Ampersand? Argument for Stephen: Ampersand was formed for the purpose of producing plays, not writing them. When Stephen wrote Philly’s Beat, he was not competing against Ampersand. Furthermore, Ampersand could not afford to produce the play even if it had had the opportunity. Argument for Asher: Ampersand was in the business of producing plays, and it wanted Philly’s Beat. Ampersand was perfectly able to afford the cost of production—until Stephen resigned.

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YOU BE THE JUDGE WRITING PROBLEM Herbert, an artist, entered into an agreement with Randy for the reproduction and distribution of his paintings. Herbert was to receive 50 percent of the gross sales revenues. Randy was responsible for all losses and for management of the business. Before leaving on a trip to Israel, where he feared he might be in some danger, Randy signed a partnership agreement with Herbert stating that they jointly owned the business. Shortly after Randy returned from the trip, the two men terminated their business relationship, and Herbert revoked his authorization for the sale of prints. When Randy continued selling the prints, Herbert filed suit. Randy argued that the two had formed a partnership and that he was authorized to sell assets of the partnership. Were Herbert and Randy partners? Argument for Herbert: A partnership agreement does not create a partnership. Randy alone managed the business. Herbert shared only revenues, not profits or losses. Argument for Randy: Herbert and Randy both provided services to the business: Randy paid for the printing, and Herbert did the artwork. These two men signed a partnership agreement, and they obviously intended to be partners.

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YOU BE THE JUDGE WRITING PROBLEM Nationwide Insurance Co.

circulated a memorandum asking all employees to lobby in favor of a bill that had been introduced in the Pennsylvania House of Representatives. By limiting the damages that an injured motorist could recover from a person who caused an accident, this bill promised to save Nationwide significant money. Not only did John Novosel refuse to lobby, but he privately criticized the bill for harming consumers. Nationwide was definitely not on his side—it fired him. Novosel filed suit, 45House Report 110-023 Employee Free Choice Act of 2007. Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it alleging that his discharge had violated public policy by infringing his right to free speech. Did Nationwide violate public policy by firing Novosel? Argument for Novosel: The U.S. Constitution and the Pennsylvania Constitution both guarantee the right to free speech. Nationwide has violated an important public policy by firing Novosel for expressing his opinions. Argument for Nationwide: For all the high-flown talk about the Constitution, what we have here is an employee who refused to carry out company policy. If the employee wins in this case, where will it all end? What if an employee for a tobacco company refuses to market cigarettes because he does not approve of smoking? How can businesses operate without loyalty from their employees?

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YOU BE THE JUDGE WRITING PROBLEM Apex gave Marcie an employment handbook stating that (1) she was an at-will employee, (2) the handbook did not create any contractual rights, and (3) employees who were fired had the right to a termination hearing. The company fired Marcie, claiming that she had falsified delivery records. She said that Apex was retaliating against her because she had complained of sexual harassment. Apex refused her request for a termination hearing. Did the employee handbook create a contract guaranteeing Marcie a hearing?

Argument for Apex: The handbook could not have been clearer—it did not create a contract. Marcie is an employee at will and is not entitled to a hearing. Argument for Marcie: Apex intended that employees would rely on the handbook. The company used promises of a hearing to attract and retain good employees. Marcie was entitled to a hearing.

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YOU BE THE JUDGE WRITING PROBLEM Clark Oil agreed to sell Amerada Hess several hundred thousand barrels of oil at $24 each by January 31, with the sulfur content not to exceed 1 percent. On January 26, Clark tendered oil from various ships. Most of the oil met specifications, but a small amount contained excess sulfur. Hess rejected all of the oil. Clark recirculated the oil, meaning that it blended the high-sulfur oil with the rest, and it notified Amerada that it could deliver 100 percent of the oil, as specified, by January 31. Hess did not respond. On January 30, Clark offered to replace the oil with an entirely new shipment, due to arrive February 1. Hess rejected the offer. On February 6, Clark retendered the original oil, all of which met contract terms, and Hess rejected it.

Clark sold the oil elsewhere for $17.75 per barrel and filed suit. Is Clark entitled Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

to damages? Argument for Clark: A seller is entitled to cure any defects. Clark did so in good faith and offered all of the oil by the contract deadline. Clark went even further, offering an entirely new shipment of oil. Hess acted in bad faith, seeking to obtain cheaper oil. Clark is entitled to the difference between the contract price and its resale price. Argument for Hess: Hess was entitled to conforming goods, and Clark failed to deliver. Under the Perfect Tender Rule, that is the end of the discussion. Hess had the right to reject non-conforming goods, and it promptly did so. Hess chose not to deal further with Clark because it had lost confidence in Clark’s ability to perform.

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YOU BE THE JUDGE WRITING PROBLEM Kuhn Farm Machinery, a European company, signed an agreement with Scottsdale Plaza Resort, of Arizona, to use the resort for its North American dealers’ convention during March 1991. Kuhn agreed to rent 190 guest rooms and spend several thousand dollars on food and beverages. Kuhn invited its top 200 independent dealers from the United States and Canada and about 25 of its own employees from the United States, Europe, and Australia, although it never mentioned those plans to Scottsdale. On August 2, 1990, Iraq invaded Kuwait, and on January 16, 1991, the United States and allied forces were at war with Iraq. Saddam Hussein and other Iraqi leaders threatened terrorist acts against the United States and its allies. Kuhn became concerned about the safety of those traveling to Arizona, especially its European employees. By mid-February, 11 of the top 50 dealers with expense paid trips had either canceled their plans to attend or failed to sign up. Kuhn postponed the convention. The resort sued. The trial court discharged the contract under the doctrines of commercial impracticability and frustration of purpose. The resort appealed. Did commercial impracticability or frustration of purpose discharge the contract? Argument for Scottsdale Plaza Resort: The resort had no way of knowing that Kuhn anticipated bringing executives from Europe, and even less reason to expect that if anything interfered with their travel, the entire convention would become pointless. Most of the dealers could have attended the convention, and the resort stood ready to serve them. Argument for Kuhn: The parties never anticipated the threat of terrorism. Kuhn wanted this convention so that its European executives, among others, could meet top North American dealers. That is now impossible. No company would risk employee lives for a meeting. As a result, the contract has no value at all to Kuhn, and its obligations should be discharged by law.

Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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