Mario Bonsetti and Rico Sanchez incorporated Gnarly Vulcan Gear, Inc. (GVG), to manufacture windsurfing equipment. Bonsetti owned 60 percent and Sanchez owned 40 percent of the corporation’s stock, and both men served on the board of directors. Hula Boards, Inc., owned solely by Mai Jin Li, made a public offer to buy GVG stock. Hula offered 30 percent more than the market price per share for the GVG stock, and Bonsetti and Sanchez each sold 20 percent of their stock to Hula. Jin Li became the third member of the GVG board of directors. An irreconcilable dispute soon arose between Bonsetti and Sanchez over design modifications of their popular Baked Chameleon board. Sanchez and Jin Li voted to merge GVG with Hula Boards under the latter name, despite Bonsetti’s dissent. GVG was dissolved, and production of the Baked Chameleon ceased. Using the information presented in the chapter, answer the following questions. 1. What rights does Bonsetti have (in most states) as a minority shareholder dissenting to the merger of GVG and Hula Boards? 2. Could the parties have used a short-form merger procedure in this situation? Why or why not? 3. What is the term used for Hula’s offer to purchase GVG stock? By what method did Hula acquire control over GVG? 4. Suppose that after the merger, a person who was injured on a Baked Chameleon board sued Hula (the surviving corporation). Can Hula be held liable for an injury? Why or why not?
> Must business owners in all states have to provide the same benefits to employees in a same-sex union as they do to heterosexual couples?
> Review the basic requirements for a valid contract listed at the beginning of this chapter. Now consider the relationship created when a student enrolls in a college or university. (a) One group should analyze and discuss whether a contract has been form
> Should domain name hosting companies be liable for revenge porn?
> From an ethical point of view, is there any difference between managers calling subordinates during off hours for work-related questions and sending e-mails or text messages?
> Can a business manager’s religious beliefs factor into the business’s hiring treatment of same-sex partners? Why or why not?
> If you had to decide whether to allow a U.S. magistrate judge to hear your case, what information might you ask your attorney to provide concerning that individual?
> In our connected world, is there any way a defendant could avoid service of process via social media?
> If you were facing an especially complex legal dispute—one involving many facets and several different types of law—would you consent to allowing a U.S. magistrate judge to decide the case? Why or why not?
> When is the Supreme Court justified in not following the doctrine of stare decisis?
> Why has the U.S. been slow to adopt commercial drone delivery in comparison to other nations?
> The U.S. Department of Transportation (DOT) sometimes hears an appeal from a party whose contract with the DOT has been canceled. An administrative law judge (ALJ) who works for the DOT hears this appeal. What safeguards promote the ALJ’s fairness?
> Peppertree, Inc., hired Robert McClellan, a licensed contractor, to repair a condominium complex that was damaged in an earthquake. McClellan completes the work, but Peppertree fails to pay. McClellan is awarded $181,000 in an arbitration proceeding. Pep
> Bento Cuisine is a lunch-cart business. It occupies a street corner in Texarkana, a city that straddles the border of Arkansas and Texas. Across the street— and across the state line, which runs down the middle of the street—is Rico’s Tacos. The two busi
> Macro Corporation and Micro Company combine, and a new organization, MM, Inc., takes their place. What is the term for this type of combination? What happens to the assets, property, and liabilities of Micro?
> Nico is Omega Corporation’s majority shareholder. He owns enough stock in Omega that if he were to sell it, the sale would be a transfer of control of the firm. Discuss whether Nico owes a duty to Omega or the minority shareholders in selling his shares.
> Northwest Brands, Inc., is a small business incorporated in Minnesota. Its one class of stock is owned by twelve members of a single family. Ordinarily, corporate income is taxed at the corporate and shareholder levels. Is there a way for Northwest Bran
> Anchor Bottling Company and U.S. Beverages, Inc. (USB), enter into a franchise agreement that states the franchise may be terminated at any time “for cause.” Anchor fails to meet USB’s specified sales quota. Does this constitute “cause” for termination?
> Gabriel, Harris, and Ida are members of Jeweled Watches, LLC. What are their options with respect to the management of their firm?
> Rafael dies without having made a will. He is survived by many relatives—a spouse, biological children, adopted children, sisters, brothers, uncles, aunts, cousins, nephews, and nieces. What determines who inherits what?
> Gert buys a notebook computer from EZ Electronics. She pays for it with her credit card. When the computer proves defective, she asks EZ to repair or replace it, but EZ refuses. What can Gert do?
> Mitsui Bank hired Ross Duncan as a branch manager in one of its Southern California locations. At that time, Duncan received an employee handbook informing him that Mitsui would review his performance and salary level annually. In 2016, Mitsui decided to
> What are the consequences in addition to those stated in this feature of failing to make timely payments on federal student loans? Discuss.
> What subjects are likely to be covered in the future regulation of virtual currency? Discuss.
> How do the CISG and other conventions promote international business?
> What is the most significant factor in determining whether fantasy sports games constitute gambling? Explain.
> Quintana Corporation sends important documents to Regal Nursery, Inc., via Speedy Messenger Service. While the documents are in Speedy’s care, a third party causes an accident to Speedy’s delivery vehicle that results in the loss of the documents. Does S
> Most likely, hackers will always exist, attempting to breach computer systems using the most up-to-date technology. What can businesses do to prevent breaches to their systems?
> Many businesses include opt-out provisions in their arbitration clauses but few consumers and employees take advantage of them. Why?
> How might a spouse or ex-spouse overcome the business asset protection devices and techniques discussed in this feature? Explain.
> What are the advantages of fossil fuels? What are the disadvantages? Discuss.
> Is it unethical for a business to include an arbitration clause with a class-action ban in its contracts with customers, employees, and other businesses? Discuss.
> Between 2 and 4 percent of online orders involve fraud. What can an online business do to avoid being the victim?
> Is it ethical to continue to use fossil fuels? Explain.
> To attain success in global commerce, an online business should design its Web site with what in mind?
> Are small businesses ethically obligated to offer their employees’ health insurance? Discuss.
> In addition to the borrowers listed in this feature, who deserves to have their federal student loans forgiven? Why?
> Resource Refining Company’s plant emits smoke and fumes. Resource’s operation includes a short railway system, and trucks enter and exit the grounds continuously. Constant vibrations from the trains and trucks rattle nearby residential neighborhoods. The
> When is the use of virtual currency unethical? Why?
> How does the type of “flexible” ethics proposed in this feature enhance the potential for success in global commerce?
> Is gambling less ethical than trading in securities or funding a start-up? Why?
> What is the extent of a business’s ethical obligation to protect the personal information of its customers and employees? Discuss.
> With respect to the division of property on divorce, should the conduct of the spouses during the marriage be a factor? Why or why not?
> Should the mandate to offer employees health insurance be extended to include small businesses? Or should it be repealed altogether? Explain.
> Myrtle Jackson owns several commercial buildings that she leases to businesses, one of which is a restaurant. The lease states that tenants are responsible for securing all necessary insurance policies but the landlord is obligated to keep the buildings
> Provident Insurance, Inc., issued an insurance policy to a company providing an employee, Steve Matlin, with disability insurance. Soon thereafter, Matlin was diagnosed with “panic disorder and phobia of returning to work.” He lost his job and sought dis
> Robert Durbin, a student, borrowed funds from a bank for his education and signed a promissory note for their repayment. The bank lent the funds under a federal program designed to assist students at postsecondary institutions. Under this program, repaym
> In December, Mendoza agreed to buy the broccoli grown on one hundred acres of Willow Glen’s one-thousand-acre broccoli farm. The sales contract specified F.O.B. Willow Glen’s field by Falcon Trucking. The broccoli was to be planted in February and harves
> United Pharmaceuticals, Inc., believes that it has developed a new drug that will be effective in the treatment of patients with AIDS. The drug has had only limited testing, but United wants to make the drug widely available as soon as possible. To marke
> For many years, New York City has had to deal with the vandalism and defacement of public property caused by unauthorized graffiti. In an effort to stop the damage, the city banned the sale of aerosol spray-paint cans and broad-tipped indelible markers t
> The Brown family owns several companies, including the J. H. Stevedoring Company and Penn Warehousing and Distribution, Inc. Many aspects of the companies’ operations and management are intertwined. Dennis Bishop worked for J. H. and Penn for more than t
> Val’s Foods signs a contract to buy 1,500 pounds of basil from Sun Farms, a small organic herb grower, as long as an independent organization inspects the crop and certifies that it contains no pesticide or herbicide residue. Val’s has a contract with se
> Shalene Kolchek bought a Great Lakes spa from Val Porter, a dealer who was selling spas at the state fair. Porter told Kolchek that Great Lakes spas were “top of the line” and “the Cadillac of spas.” He also indicated that the spa she was buying was “ful
> Nancy Mahar was the office manager at Golden Years Nursing Home, Inc. She was given a signature stamp to issue checks to the nursing home’s employees for up to $100 as advances on their pay. The checks were drawn on Golden Years’ account at First Nationa
> In June 2016, Bernard Ramish set up a $48,000 trust fund through West Plains Credit Union to provide tuition for his nephew, Nathan Covacek, to attend Tri-State Polytechnic Institute. The trust was established under Ramish’s control and went into effect
> Evelyn Vollmer orally agreed to loan Danny Lang $150,000 to make an investment in a local nightclub. The loan was to be repaid from the profits received from the investment. Their agreement was never memorialized in writing, however. Eighteen months late
> The doctrine of respond eat superior should be modified to make agents solely liable for their tortious (wrongful) acts committed within the scope of employment.
> Leota Sage saw a local motorcycle dealer’s newspaper advertisement offering a MetroRider EZ electric scooter for $1,699. When she went to the dealership, however, she learned that the EZ model had been sold out. The salesperson told Sage that he still ha
> James Blatt hired Marilyn Scott to sell insurance for the Massachusetts Mutual Life Insurance Company. Their contract stated, “Nothing in this contract shall be construed as creating the relationship of employer and employee.” The contract was terminable
> Tech plate Corporation learns that a federal administrative agency is considering a rule that will have a negative impact on the firm’s ability to do business. Does the firm have any opportunity to express its opinion about the pending rule? Explain.
> David Brock was on the board of directors of Firm Body Fitness, Inc., which owned a string of fitness clubs in New Mexico. Brock owned 15 percent of the Firm Body stock and was also employed as a tanning technician at one of the fitness clubs. After the
> Renee Beaver started racing go-karts competitively in 2016, when she was fourteen. Many of the races required her to sign an exculpatory clause to participate, which she or her parents regularly signed. In 2018, right before her sixteenth birthday, Renee
> Ronald Metzgar placed his fifteen-month-old son, Matthew, awake and healthy, in his playpen. Ronald left the room for five minutes and on his return found Matthew lifeless. A toy block had lodged in the boy’s throat, causing him to choke to death. Ronald
> Assume that the Securities and Exchange Commission (SEC) has a rule that it will enforce statutory provisions prohibiting insider trading only when the insiders make monetary profits for themselves. Then the SEC makes a new rule, declaring that it will n
> John operates a motorcycle repair shop from his home but finds that his business is limited by the small size of his garage. Driving by a neighbor’s property, he notices a for-sale sign on a large, metal-sided garage. John contacts the neighbor and offer
> Air Ruidoso, Ltd., operated a commuter airline and air charter service between Ruidoso, New Mexico, and airports in Albuquerque and El Paso. Executive Aviation Center, Inc., provided services for airlines at the Albuquerque International Airport. Air Rui
> Shane Durbin wanted to have a recording studio custom-built in his home. He sent invitations to a number of local contractors to submit bids on the project. Rory Amstel submitted the lowest bid, which was $20,000 less than any of the other bids Durbin re
> Corporate law should be altered to prohibit incumbent management from using most of the legal methods available for fighting takeovers.
> Because most shareholders never bother to vote for directors, shareholders have no real control over corporations.
> The sole shareholder of an S corporation should never be able to avoid liability for the torts of her or his employees.
> Sheila makes a will leaving her property in equal thirds to Toby and Umeko, her children, and Velda, her niece. Two years later, Sheila is adjudged mentally incompetent, and that same year, she dies. Can Toby and Umeko have Sheila’s will revoked on the g
> Because LLCs are essentially just partnerships with limited liability for members, all partnership laws should apply.
> A partnership should automatically end when one partner disassociates from the firm.
> All franchisors should be required by law to provide complete estimates of the profitability of a prospective franchise based on the experiences of their existing franchisees.
> Members of minority groups and women have made enough economic progress in the last several decades that they no longer need special legislation to protect them.
> The U.S. labor market is highly competitive, so state and federal laws that require overtime pay are unnecessary and should be abolished.
> Whenever an insurance company can prove fraud during the application process, it should never have to pay on the policy.
> Under no circumstances should a local government be able to condemn property in order to sell it later to real estate developers for private use.
> Common carriers should not be able to limit their liability.
> Only the largest publicly held companies should be subject to the Sarbanes-Oxley Act.
> The Internet and the rise of e-commerce have rendered our current antitrust concepts and laws obsolete.
> Brite Images agrees to sell Poster Planet five thousand posters of celebrities, to be delivered on May 1. On April 1, Brite repudiates the contract. Poster Planet informs Brite that it expects delivery. Can Poster Planet sue Brite without waiting until M
> The courts should reject all wetlands cases in which the wetlands in question do not consist of actual bodies of water that exist during the entire year.
> Laws against bait-and-switch advertising should be abolished because no consumer is ever forced to buy anything.
> Because an administrative law judge (ALJ) acts as both judge and jury, there should always be at least three ALJs in each administrative hearing.
> Any changes to existing, fully witnessed wills should also have to be witnessed.
> If a contract specifies a particular carrier, then the shipper must use that carrier or be in break of the contract—no exceptions should ever be allowed.
> A financing statement that does not have the debtor’s exact name should still be effective because creditors should always be protected when debtors default.
> Because writs of attachment are a prejudgment remedy for nonpayment of a debt, they are unfair and should be abolished.
> To reduce fraud, checks that utilize mechanical or electronic signature systems should not be honored.
> Because signature stamps create so many opportunities for embezzlement, they should be banned.
> We should eliminate the status of holder in due course for those who possess negotiable instruments.
> Skye asks Jim to buy a textbook for her at the County Community College campus bookstore. Skye writes a check payable to the bookstore and leaves the amount blank for Jim to fill in the price of the book. The cost of the book is $100. Jim fills in the ch
> Congress should pass a law disallowing all negotiable instruments that are not written on paper.
> The U.S. federal courts are accepting too many lawsuits initiated by foreigners that concern matters not relevant to this country.
> No express warranties should be created by the oral statements made by salespersons about a product.
> Rather than being allowed to file Chapter 7 bankruptcy petitions, individuals and couples should always be forced to make an effort to pay off their debts through Chapter 13.
> All works created by independent contractors should be considered works for hire under copyright law.
> The distinction between shipment and destination contracts for the purpose of deciding who will bear the risk of loss should be eliminated in favor of a rule that requires the buyer to always buy insurance for the goods being shipped.
> The UCC should require the same degree of definiteness of terms, especially with respect to price and quantity, as contract law does.
> Courts should always uphold limitation-of-liability clauses, no matter what are the respective bargaining powers of the two parties to the contract.
