Question: William Elias was the former owner of

> When Johnson Hardware Shop borrowed $20,000 from First Bank, it used its inventory as collateral for the loan. First Bank perfected its security interest by filing a financing statement. The inventory was subsequently damaged by fire. Flanders Insurance

> Edward Johnson III, the CEO and principal owner of the world’s largest mutual fund company, Fidelity Investments, Inc., was a longtime tennis buddy of Richard Larson. In 1995, Johnson asked Larson, who had construction experience, to supervise the constr

> A consumer made a purchase on a credit card. The card issuer refused to accept the charge, and an attorney then sued the consumer for the amount due. In the complaint filed in the lawsuit, the attorney wrongly stated that interest was owed at 18 percent

> Richard Grassgreen was executive vice president and then president and chief operating officer of Kinder- Care, Inc., the largest proprietary provider of child care in the country. The company was restructured in 1989 and changed its name to the Enstar G

> The town of Newport obtained a corporate MasterCard that was given to the town clerk for purchasing fuel for the town hall. The town clerk used the card for personal restaurant, hotel, and gift shop debts. The town refused to pay the card charges on the

> In December 2008, Corey and Jamie Baker purchased a TV from Best Buy as well as a four-year service contract for the TV. In November 2010, Best Buy determined that the problems the Bakers were having with the TV could not be fixed, so Best Buy replaced t

> Blubaugh was a district manager of Schlumberger Well Services. Turner was an executive employee of Schlumberger. Blubaugh was told that he would be fired unless he chose to resign. He was also told that if he would resign and release the company and its

> International Yogurt Co. (IYC) developed a unique mix for making frozen yogurt and related products. Morris and his wife purchased a franchise from the company but were not told that a franchise was not a requirement for obtaining the mix — that the comp

> On October 14, 1980, United American Bank of Knoxville made a $1,700,000 loan to Frederic B. Ingram. William F. Earthman, the president of the bank and a beneficiary of the loan, had arranged for the loan and prepared the loan documents. Mr. Ingram and M

> On May 16, 2003, Sari Smith filed a class-action lawsuit in Cook County, Illinois, against J.M. Smucker Co. on behalf of “ [a]ll purchasers in the United States of America of spreadable fruit products labeled ‘ Simply 100% Fruit ’ manufactured, produced,

> Thomas was sent a credit card through the mail by a company that had taken his name and address from the telephone book. Because he never requested the card, Thomas left the card lying on his desk. A thief stole the card and used it to purchase merchandi

> Sharolyn Charles wrote a check for $17.93 to a Poncho ’ s Restaurant on July 4, 1996, as payment for a meal she had there. The check was returned for insufficient funds. Poncho ’ s forwarded the check to Check Rite for collection. On July 19, Check Rite

> Colgate-Palmolive Co. ran a television commercial to show that its shaving cream, Rapid Shave, could soften even the toughness of sandpaper. The commercial showed what was described as the sandpaper test. Actually, what was used was a sheet of Plexiglas

> The San Antonio Retail Merchants Association (SARMA) was a credit reporting agency. It was asked by one of its members to furnish information on William Douglas Thompson III. It supplied information from a file that contained data on William III and on W

> Classify each of the following activities as proper or prohibited under the various consumer statutes you have studied. a. Calling a hospital room to talk to a debtor who is a patient there. b. Calling a hospital room to sell surgical stockings. c. Rol

> Discuss the power of a corporation ’ s president to employ a sales manager and to agree that the man- ager should be paid a stated amount per year plus a percentage of any increase in the dollar volume of sales that might take place.

> A made a contract to construct a house for B. Subsequently, B sued A for breach of contract. A raised the defense that the contract was not binding because it was not sealed. Is this a valid defense? [ Cooper v. G. E. Construction Co., 158 S.E.2d 305 (Ga

> Willingham proposed to obtain an investment property for the Tschiras at a “fair market price,” lease it back from them, and pay the Tschiras a guaranteed return through a management contract. Using a shell corporation, The Wellingham Group bought a comm

> Parente, Randolph, Orlando & Associates (Parente) is an accounting firm that had done auditing work for Sparkomatic for nearly 20 years. On June 14, 1993, Sparkomatic entered into a Memorandum of Intent with Williams Controls to sell Williams assets from

> List three areas in consumer credit cards affected by the CARD Act.

> Alpha University has an arrangement with Axis Credit Card Company to collect 1 percent on all credit card charges made by students who obtain their cards through booths on the Alpha campus. Do any consumer protection statutes apply to this relationship?

> Stevens purchased a pair of softball shoes manufactured by Hyde Athletic Industries. Because of a defect in the shoes, she fell and broke an ankle. She sued Hyde under the state consumer protection act, which provided that “ any person who is injured in

> Charter Bank of Gainesville had in its possession a note containing the following provision: “ This note with interest is secured by a mortgage on real estate, of even date herewith, made by the maker hereof in favor of said payee ... . The terms of said

> Jack Smith was required by his bank to obtain two sureties for his line of credit of $100,000. Ellen Weiss has agreed to act as a surety for $50,000, and Allen Fox has agreed to act as a surety for $75,000. Smith has used the full $100,000 in the line of

> Hugill agreed to deliver shingles to W. I. Carpenter Lumber Co. and furnished a surety bond to secure the faithful performance of the contract on his part. After a breach of the contract by Hugill, the lumber company brought an action to recover its loss

> Ribaldgo Argo Consultores entered into a contract with R. M. Wade & Co. for the purchase of irrigation equipment. Ribaldgo obtained a letter of credit from Banco General, a bank with its principal place of business in Quito, Ecuador. The letter of credit

> UPS Capital Business Credit agreed to loan Ashford International, Inc, an American company based in Atlanta, Georgia, for the sale of computers to the Ministry of Education in Jordan. Ashford was required to obtain a letter of credit from United Californ

> Tri County Truck & Diesel borrowed $165,000 from Security State Bank and pledged its inventory as security for the loan. In addition, Fred and Randelle Burk agreed to act as sureties for the loan. Tri County defaulted on the loan and Security Bank reposs

> Larry G. Snodgrass and Mark Swinnea owned equal interests in two business entities, ERI Consulting Engineers, Inc. (ERI), and Malmeba Company, Ltd., which they operated together for approximately 10 years. ERI manages asbestos abatement projects for cont

> James Fitl purchased a 1952 Mickey Mantle Topps baseball card from baseball card dealer Mark Strek for $17,750 and placed it in a safe deposit box. Two years later, he had the card appraised, and he was told that the card had been refinished and trimmed,

> Crown Corporation has borrowed $16,000,000 from Third Bank. Third Bank required four sureties for the loan. The sureties are as follows: Andover…………$4,000,0000 Busch ……………..$8,000,0000 Chapman…………$2,000,0000 Davidson ………….$2,000,0000 Crown has defaulted

> Fern Schimke ’ s husband, Norbert, was obligated on two promissory notes in favor of Union National Bank. Some time prior to his death, Union National Bank prepared a guaranty contract that was given to Norbert for his wife to sign. She signed the guaran

> Beck was the general manager of Chilkoot Lumber Co. Haines sold fuel to the company. To persuade Haines to sell on credit, Beck signed a paper by which he promised to pay any debt the lumber company owed Haines. He signed this paper with his name followe

> On August 1, 1987, Dori Leeds signed a “ guarantee of credit ” with Sun Control Systems, which guaran- teed “ the prompt payment, when due, of every claim of [Sun Control Systems] against [Dori Leeds dba ‘ Blind Ambitions ’ ]. ” At the time she signed th

> LaBarge Pipe & Steel Company agreed to sell PVF $143,613.40 of 30-inch pipe provided that PVF obtain a letter of credit for $144,000, with the letter of credit entitling LaBarge to payment if PVF did not pay for the pipe within 30 days of invoice. PVF ob

> Abby Novel signed a note with the following on it: “ Glen Gallwitz 1-8-2002 loaned me $5,000 at 6% interest a total of $10,000.00. ” The note did not contain a payment schedule or a time for repayment. Abby used the $10,000 as start-up money for her busi

> First Interstate Bank issued a letter of credit in favor of Comdata Network. Comdata is engaged in money transfer services. It provides money to truckers on the road by way of cash advances through form checks written by truckers. When Comdata enters int

> Industrial Mechanical had a contract with Free Flow Cooling, Ltd., a British company. Free Flow owed Industrial $171,974.44 for work Industrial had per- formed on a construction project in Texas. Free Flow did not pay Industrial, and Industrial filed sui

> First National Bank hired Longdon as a secretary and obtained a surety bond from Belton covering the bank against losses up to $100,000 resulting from Longdon ’ s improper conduct in the performance of his duties. Both Longdon and the bank signed the app

> Paul owed Charles a $1,000 debt due September 1. On August 15, George, for consideration, orally promised Charles to pay the debt if Paul did not. On September 1, Paul did not pay, so Charles demanded $1,000 from George. Is George liable? Why or why not?

> Aldrich and Co. sold goods to Donovan on credit. The amount owed grew steadily, and finally Aldrich refused to sell any more to Donovan unless Donovan signed a promissory note for the amount due. Donovan did not want to but signed the note because he had

> Christy Pontiac, a corporation, was indicted for theft by swindle and forgery involving a GM cash rebate program. Hesli, a middle-management employee of Christy Pontiac, had forged the cash rebate applications for two cars so that the rebate money was pa

> Donaldson sold plumbing supplies. The St. Paul- Mercury Indemnity Co., as surety for him, executed and delivered a bond to the state of California for the payment of all sales taxes. Donaldson failed to pay, and the surety paid the taxes that he owed and

> In May 1989, Alma Equities Corp., owned by its sole shareholder and president, Lewis Futterman, purchased a hotel and restaurant in Vail, Colorado, from Alien for $3,900,000. Alma paid $600,000 in cash to Alien, and Alien provided a purchase money loan t

> Ann Weldon maintained an account at Trust Company Bank. James Weldon, her son and a garment broker, purchased textile goods from Sportswear Services for resale to another corporation known as Thicket Textiles. Sportswear demanded certified funds from Jam

> Arthur Odgers died, and his widow, Elizabeth Odgers (Elizabeth Salsman by remarriage), retained Breslow as the attorney for her husband ’ s estate. She received a check payable to her drawn on First National City Bank. Breslow told her to deposit it in h

> The Jordan Keys law firm represented the Greater Southeast Community Hospital of Washington, D.C., in a medical malpractice suit against the hospital. The hospital was self-insured for the first $1,000,000 of liability and the St. Paul Insurance Co. prov

> Adam Paul Strege (APS) opened a checking account at U.S. Bank. Just below his signature card for the account, he wrote, “ Call if I bounce a check. ” APS bounced several checks, and each time U.S. Bank covered those checks but it did not notify APS of th

> Harold H. Heidingsfelder signed a credit agreement as vice president of J. O. H. Construction Co. for a line of credit with Pelican Plumbing Co. The credit agreement contained the following language: In consideration of an open account privilege, I hereb

> Hixson paid Galyen Petroleum Co. money he owed by issuing three checks to Galyen. The bank refused to cash the three checks because of insufficient funds in the Hixson account to pay all three. Galyen sued the bank. What was the result? Why? [ Galyen Pet

> James Horne ’ s will provides that his estate is to be distributed to his heirs per capita . Upon his death, two of his three children are surviving and his deceased child left two children (James ’ s grandchildren). His will provides that all his proper

> Scott D. Leibling gave his bank, Mellon Bank, an oral stop payment order. Nineteen months later, the check emerged and Mellon Bank honored it. Lei- bling has filed suit against Mellon Bank for acting unreasonably under the circumstances. Is Mellon Bank l

> Larry Phillips was hired for a two-year period as executive secretary of the Montana Education Association (MEA). Six months later, he was fired. He then sued MEA for breach of contract and sued the directors and some of the other employees of MEA on the

> Norris, who was ill in the hospital, was visited by his sister during his last days. Norris was very fond of his sister and wrote a check to her that she deposited in her bank account. Before the check cleared, Norris died. Could the sister collect on th

> Bogash drew a check on National Safety Bank and Trust Co. payable to the order of Fiss Corp. At the request of Fiss Corp., the bank certified the check. The bank later refused to make payment on the check because of a dispute between Bogash and the corpo

> John G. Vowell and his wife, now deceased, had a checking account and a savings/money-market account with Mercantile Bank of Arkansas. In June 1997, Dr. Vowell and his wife allowed their daughter, Suzan Vowell, now also deceased, and her boy- friend to

> Dean bought a car from Cannon. As payment, Dean gave him a check drawn on South Dorchester Bank of Eastern Shore Trust Co. Cannon cashed the check at the Cambridge Bank of Eastern Shore Trust Co. The drawee bank refused payment when the check was present

> Stock Solution is a “stock photo agency” that leases photographic transparencies produced by professional photographers for use in media advertising. Between October 1, 1994, and May 31, 1995, Stock Solution delivered Axiom 107 color transparencies to be

> Gloria maintains a checking account at First Bank. On the third day of January, the bank sent her a statement of her account for December accompanied by the checks that the bank had paid. One of the checks had her forged signature, which Gloria dis- cove

> Elmore purchased a car from Doenges Brothers Ford. The car had been placed with the dealership by a dealership employee as part of a consignment arrangement. Elmore was unable to obtain title to the car because the Environmental Protection Agency had iss

> McInnis purchased a tractor and scraper as new equipment of the current model year from Western Tractor & Equipment Co. The written contract stated that the seller disclaimed all warranties and that no warranties existed except those stated in the contra

> Valerie and Flora are the beneficiaries of a trust left to them by their mother upon her death. Their mother named Art Casanelli, a family friend, as the trustee. Flora has seen Art driving a new car and has learned that he just purchased a new and rathe

> Mrs. Kirby purchased a wheelchair from NMC/ Continue Care. The wheelchair was customized for her and her home. When the wheelchair arrived, it was too wide to fit through the doorways in her home. What options does Mrs. Kirby have? [ Kirby v. NMC Continu

> Sonya Kaminski purchased from Billy Cain ’ s Cornelia dealership a truck that was represented to her to be a 1989 Chevrolet Silverado pickup. However, subsequent incidents involving repair of the truck and its parts, as well as a title history, revealed

> In 1996, Congress offered national banks the opportunity to become Subchapter S entities. Amboy Bancorporation was a small, highly profitable New Jersey Bank that was overcapitalized. Amboy ’ s president and CEO utilized Bank Advisory Group, Inc. (BAG),

> Brown Machine Company, a division of Kvaerner U.S., Inc., entered into a contract to supply a machine and tools to Hakim Plast, a food container – producing company based in Cairo, Egypt, to enable Hakim to meet its growing demand for plastic containers.

> U.S. Steel Corp. formed Orinoco Mining Co., a wholly owned corporation, to mine large deposits of iron ore that U.S. Steel had discovered in Venezuela. Orinoco, which was incorporated in Delaware, was subject to Venezuela’s maximum tax of 50 percent on n

> Emily Lieberman and Amy Altomondo were mem- bers of the Alpha Chi Omega (AXO) sorority at Bowling Green State University. They negotiated with Johnathan James Furlong for the purchase of custom-designed sweaters for themselves and their sorority sisters

> Soon after Gast purchased a used auto from a Chevrolet dealer, he experienced a series of mechanical problems with the car. Gast refused to make further payments on the bank note that had financed the purchase. The bank took possession of the automobile

> Firwood Manufacturing Co. had a contract to sell General Tire 55 Model 1225 postcure inflators (PCIs). PCIs are $30,000 machines used by General Tire in its manufacturing process. The contract was entered into in 1989, and by April 1990 General Tire had

> Joseph Perna purchased a 1981 Oldsmobile at a traffic auction conducted by Locascio. The car had been seized pursuant to action taken by the New York City Parking Violation Bureau against Jose Cruz. Perna purchased the car for $1,800 plus tax and towing

> GRAS is a Michigan corporation engaged in the business of buying and selling cars. Between 1997 and 2000, Katrina Stewart was employed as a man- ager by GRAS. During that period, Stewart wrote checks, without authority, on GRAS ’ s corporate account paya

> Cronin, an employee of Epicycle, cashed his final paycheck at Money Mart Check Cashing Center. Epicycle had issued a stop payment order on the check. Money Mart deposited the check through normal banking channels. The check was returned to Money Mart mar

> Stephan ’ s Machine & Tool, Inc., purchased a boring mill from D&H Machinery Consultants. The mill was a specialized type of equipment and was essential to the operation of Stephan ’ s plant. The purchase price was $96,000, and Stephan ’ s had to borrow

> Ramtreat Metal Technology provided for a “double your money back” remedy in its contracts for the sale of its metal drilling assemblies. A buyer filed suit seeking consequential damages and cost of replacement. Ramtreat said that its clause was a limitat

> Wolosin purchased a vegetable and dairy refrigerator case from Evans Manufacturing Corp. When Evans sued Wolosin for the purchase price, Wolosin claimed damages for breach of warranty. The sales contract provided that Evans would replace defective parts

> Shareholders of Bear Stearns sued the directors of the corporation for damages for violation of the directors ’ fiduciary duties in effecting a stock-for-stock merger with J.P. Morgan Chase for an implied value of $10 per share while the company ’ s stoc

> McNeely entered into a contract with Wagner to pay $250,000 as a lump sum for all timber present in a given area that Wagner would remove for McNeely. The contract estimated that the volume in the area would be 780,000 board feet. Wagner also had provisi

> Formetal Engineering submitted to Presto a sample and specifications for precut polyurethane pads to be used in making air-conditioning units. Formetal paid for the goods as soon as they were delivered but subsequently discovered that the pads did not co

> Catherine Joseph, who does business as Metro Classics, sold clothing to Jackson Hole Traders, a corporation owned by David and Elizabeth Speaks. Jackson Hole Traders is located in Jackson, Wyoming, and sells clothing for men and women through a retail

> Marc Rich & Co., A.G., a Swiss commodities trading corporation, refused to comply with a grand jury subpoena requesting certain business records maintained in Switzerland and relating to crude oil transactions and possible violations of U.S. income tax l

> Harry Ulmas made a contract to buy a new car from Acey Oldsmobile. He was allowed to keep his old car until the new car was delivered. The sales contract gave him a trade-in value of $650 on the old car but specified that the car would be reappraised whe

> Trefalcon (a commercial arm of the government of Ghana) entered into a contract with Supply Com- mission as a purchaser of residual fuel oil (RFO). Supply Commission agreed, among other things, to supply Trefalcon with RFO at competitive prices as reserv

> The text of a handwritten note stated simply that “‘ I Robert Harrison owe Peter Jacob $25,000 ... , ’ /s/ Robert Harrison. ” Peter Jacob sought to use the handwritten note as a negotiable promissory note. Can he? [Jacob v. Harrison , 49 U.C.C. Rep. Serv

> Mark Murray and Ian Peck are art dealers who own separate art galleries located in New York. Robert and Jean Weil reside in Montgomery, Alabama, and are art collectors. Murray and Sam Lehr, a business acquaintance of his, traveled to Montgomery to see th

> Compare an implied contract with a quasi-contract.

> National Computers, Inc., a U.S. firm, entered into a joint venture with a Chinese computer manufacturing organization, TEC. A dispute arose over payments due the U.S. firm under the joint venture agreement with TEC. The agreement called for disputes to

> Hornell Brewing Company is a supplier and marketer of alcoholic and nonalcoholic beverages, including the popular iced tea drink, Arizona. In 1992, Stephen A. Spry and Don Vultaggio, Hornell ’ s chairman of the board, made an oral agreement for Spry to b

> Jerry O. Peavy, Jr., who did not have a bank account of his own, received a draft from CNL Insurance America in the amount of $5,323.60. The draft was drawn on CNL ’ s account at Bank South, N.A., and was “ payable to the order of Jerry Peavy and Trust C

> Nuco Plastics, Inc., was developing production molds for Universal Plastics, Inc. During the course of the development of the molds, Universal changed specifications and required the use of different materials. Nuco raised the price from $235 per 1,000 p

> Steel Industries, Inc., ordered steel from Interlink Metals & Chemicals. The steel was to be delivered from a Russian mill. There were political and other issues in Russia, and the mill was shut down. Inter- link did not deliver the steel to Steel Indust

> Westinghouse Electric Corporation entered into uranium supply contracts with 22 electric utilities during the late 1960s. The contract prices ranged from $7 to $10 per pound. The Arab oil embargo and other changes in energy resources caused the price of

> The Home Shopping Club ordered 12,000 Care Bear lamps from Ohio International, Ltd. When the lamps arrived, they had poor painting and staining, elements were improperly glued and could come loose (a danger to the children with the lamps in their rooms),

> Bobby Murray Chevrolet, Inc., submitted a bid to the Alamance County Board of Education to supply 1,200 school bus chassis to the district. Bobby Murray was awarded the contract and contracted with General Motors (GM) to purchase the chassis for the scho

> ABCO (Abbott Development Company) made a note payable to Western State Bank of Midland. The FDIC took over Western State ’ s operations after it failed. ABCO had defaulted on the note, after which the FDIC permitted ABCO Homes to refinance the note, maki

> On January 3, 1991, Central District Alarm (CDA) and Hal-Tuc entered into a written sales agreement providing that CDA would sell and install new security equipment described on an equipment list attached to the contract. This list included a Javelin VCR

> Roland Staemphfli was employed as the chief financial officer of Honeywell Bull, S.A. (HB), a Swiss computer company operating exclusively in Switzer- land. Staemphfli purportedly arranged financing for HB in Switzerland through the issuance of promissor

> In 1992, Donna Smith telephoned Clark, the man- ager of Penbridge Farms, in response to an advertisement Clark had placed in the July issue of the Emu Finder about the availability for sale of proven breeder pairs. Clark told Smith that he had a breeder

> Economy Forms Corp. sold concrete-forming equipment to Kandy. After using the equipment for more than six months, Kandy notified Economy that the equipment was inadequate. Economy Forms alleged that Kandy had accepted the goods. Kandy denied liability. W

> Sara Bostwick hired Christian Oth, Inc., to be her wedding photographer. The parties’ written contract granted ownership of the copyright in all images created to Oth. Oth posted the wedding photos on its Web site. Bostwick e-mailed Oth to remove the pho