Name: ______________________Keith LeBlanc kl953314_______________________
Business Law – Homework Assignment 1 (40 Points)
Due June 22, 2015
This assignment is intended to help solidify your understanding of the material that we have covered
during Weeks 1-4. You may use your textbook, PowerPoint slides, Study Guides, quiz results, and
any other resources to complete this assignment. You CANNOT consult any other human
beings except for Professor Fell. This is NOT a group assignment and the work that you submit
must be your own original work. You can type your answers directly into this document or onto a
separate document. Please put your name in the body of the document. Please email this to me by
June 22, 2015 at 11:59PM. The subject line of your email MUST read “Your Name –
Business Law – Homework Assignment 1”. Please let me know if you have any questions!
1. Based on what you have read, do you believe that corporations and businesses should act ethically
and place a great deal of importance on engaging in corporate social responsibility OR do you
believe that should they focus only on maximizing profits and satisfying their shareholders? Based
on what you have read in class, please take a position on this matter and support your
position with evidence from slides, class notes, and the textbook. In order to earn full credit
on this question, you must take a position on the matter and support your position with
specific evidence from class readings and the PowerPoint as well as specific examples of
real-life companies that were discussed on the PowerPoint or in the textbook. (10 points)
Corporations do have an obligation to benefit their shareholders in the long run. The latter
phrase is especially important to any consideration of corporate responsibility. If directors
and executives were under any further pressure to maximize short-run profits, it would
prevent them from taking actions that initially may reduce profitability but could improve
the company’s financial performance in the long run. For example, investing in a major
research and development program or raising wage scales to improve employee quality or
public perception of the firm (as Wal-Mart has just done). Investing in such long-term
initiatives is necessary for companies to be competitive, and is part of the job of corporate
management. Indeed, an undue focus on short-term profits can push directors and
executives toward conduct that is ethically questionable, if not an outright ethical breach
damaging profitability in the short run. It is also important to note that companies are
responsible not only to shareholders, but also to other “stakeholders,” including employees
and residents of the communities where they operate. As documented by opinion surveys,
companies in our society are also expected to demonstrate that they are good corporate
citizens in terms of their stance and actions concerning environmental, social justice,
workplace safety, and other issues. To do otherwise would jeopardize the company’s
reputation and long-term profitability. Thus, directors and executives need to balance the
concerns and interests of other stakeholders with those of shareholders. If decision-makers
appear to give excessive weight to non-shareholder interests, or pursue social responsibility
in ways that are unethical, shareholders may campaign for relief through corporate channels
(shareholder resolutions or negotiations, for example) or pursue litigation if illegal conduct
is involved.
2. Much to the chagrin of sports journalists who are always on the hunt for a good story, Kevin
Love has decided to buy a house in Cleveland because he intends to re-sign with Cleveland after the
season. Kevin decides to look for a house in Cleveland’s trendy Tremont neighborhood. During the
process of househunting, Kevin begins to feel tired and hungry and he stops into Barrio (an
excellent Mexican restaurant) for some guacamole and tacos. Professor Fell and his wife are dining
there on the same evening. When Professor Fell sees Kevin, he immediately runs up to him and asks
for an autograph. As the two are exchanging small talk, Professor Fell learns that he is looking for a
house. Professor Fell responds by saying, “I don’t live in Tremont, but I have a great house in the
Kamm’s Corners neighborhood a bit farther west. I’ll sell it to you in July for $200,000.” Kevin says,
“Let me get back to you on that.” Professor Fell and Kevin exchange phone numbers. Shortly after
Professor Fell sits back down, Kevin is besieged by many other autograph seekers and he flees the
restaurant. Professor Fell returns to his table and tells his wife about his conversation. Outraged at
the prospect of having to move from her dream home, Professor Fell’s wife tells him to call Kevin
right now and to tell him that the house is not for sale. Professor Fell is disappointed but he figures
that keeping the peace at home is more important than pleasing Kevin and he picks up his phone to
call Kevin. When he picks up his phone, Professor Fell observes that he has already received a text
message from Kevin that says, “I can’t imagine living here in Tremont; I’d never get any peace. I
definitely want your house!” Professor Fell responds with a text message that says, “The house is no
longer for sale.” Is Professor Fell’s revocation valid? Will Professor Fell have to sell Kevin the
house? Please be sure to explain your answer in detail. Your answer should contain a
statement of the relevant law and an application of law to facts in addition to an answer to
this question. Essentially, you need to clearly and explicitly explain how you reached your
conclusion. Please do not skip steps in your analysis. Your explanation needs to be an
explanation that can easily be understood by a non-lawyer. (10 Points)
Professor Fell does not have to sell Kevin the house because an offer has not been made.
Contractual Law states that an offer can only be legally binding under the presence of both
the intent to contract as well as specifically defined terms of the transaction. Professor Fell,
the alleged offeror, has not in fact made a formal offer to Mr. Love because the terms of the
deal have not been discussed beyond a vague statement of the purchase price. A present
intent to contract means exactly that, and one would not sign a contract today for a house
that was not planning on actually changing hands in July. The courts would examine the
phrase “I’ll sell it to you in July for $200,000” and combined with a lack of paperwork
outlining the specific and definite terms of the offer, would most likely determine that the
offeror does not have a serious intention to contract.
3. Peregrin Took becomes suddenly famous after he helps save Middle-Earth from the armies of the evil
wizard Sauron. Peregrin hires The Prancing Pony to cater a “Welcome Home” party that will be held in
his honor when he returns home. Peregrin pays $5,000 for their food and drinks in exchange for a
promise from them stating that they agree to show up and provide food and drinks on the night of the
event. One of Peregrin’s companions, Meriadoc Brandybuck, also will be having his “Welcome Home”
party on the same night. Meriadoc contacts The Prancing Pony and asks them to cater his party. They
tell him that they are busy and that they cannot do so. Meriadoc offers to pay them $10,000 to do so and
they agree. The Prancing Pony then calls up Peregrin and tells them that due to unforeseen
circumstances they will not be able to cater his party. Peregrin tells them that he will sue them under the
theory of anticipatory repudiation. Did an anticipatory repudiation occur? Why or why not? Your
answer should contain a statement of the relevant law and an application of law to facts in
addition to an answer to this question. Essentially, you need to clearly and explicitly explain
how you reached your conclusion. Please do not skip steps in your analysis. Your explanation
needs to be an explanation that can easily be understood by a non-lawyer. (10 Points)
Anticipatory repudiation has occurred because The Prancing Pony has indicated that they will
not be performing a contractual obligation for Mr. Took. Even though the date of the obligation
has actually arrived yet, anticipatory repudiation is still treated as a breach of contract if the
breaching party backs out of a contractual obligation that is to take place in the future. There is
no protection from the law against fluctuating prices of party catering, and if another
opportunity arises to sell their services at a higher price, The Prancing Pony should inform them
that they already have a prior obligation. The Prancing Pony is already under a contractual
obligation. Therefore, Took should have sufficient grounds to sue The Prancing Pony for
breach of contract.
4. Bran Stark is a ten year old boy. He signs a contract with Winterfell Press. The terms of this written
contract state that Bran will write a memoir of his experiences with Hodor in exchange for $25,000. Both
Bran Stark and Winterfell Press sign a copy of the written contract. Winterfell Press falls on hard times
due to mismanagement by Roose Bolton, their new CEO. Mr. Bolton is a very devious man who is
determined to cut costs in any way possible. In an effort to get out of paying Bran Stark the money to
which he is entitled under the contract, Winterfell Press sends Bran Stark a letter saying that the contract
is null and void because Bran Stark is a minor. Bran Stark receives this letter, but he is determined to
earn the money to which he is entitled and proceeds with writing his memoir. Winterfell Press refuses to
pay him, and Bran Stark comes to your office looking for direction. Should you tell him that the
contract is enforceable and that Winterfell Press must pay him the money? Why or why not?
Please be sure to explain your answer in detail. Your answer should contain a statement of the
relevant law and an application of law to facts in addition to an answer to this question.
Essentially, you need to clearly and explicitly explain how you reached your conclusion. Please
do not skip steps in your analysis. Your explanation needs to be an explanation that can easily
be understood by a non-lawyer. (5 Points)
Mr. Stark is a minor and does not have the capacity to enter into a legally binding contract.
Because of this reason he can choose to disaffirm if he so desired, or if the contract put him at a
disadvantage of some kind. Generally this would be unenforceable, but in this case the party
that lacks a capacity to contract wants the contract to remain enforced and can choose to do so
under contract law. Winterfell Press had no problem with contracting into a legally binding
contract with a minor even with the risk of using their status as an exit strategy, but only now
that they owe the minor a large sum of money do they attempt to use capacity against an
enforcement of contract. The adult party with capacity must perform their contractual duty.
5. Professor Fell celebrates the end of a great semester with a trip to the Hard Rocksino in Northfield,
OH. Professor Fell has a great run at the blackjack table and winds up winning $100,000. Professor Fell
is given $100,000 in cash in a metal briefcase. He takes the briefcase and places it in the trunk of his car.
Professor Fell decides to celebrate his birthday with a delicious steak dinner at Kosar’s Wood-Fired
Grille, a restaurant which is located within the Rocksino. While he is enjoying a two-pound steak,
Professor Fell’s car is broken into by Ben Tate, a man who lives in Pennsylvania. Mr. Tate hates the
Browns because they benched him during the 2014 season. Mr. Tate wants the restaurant to be renamed
to honor Mike Tomlin, who is the coach of the Pittsburgh Steelers and who signed Mr. Tate to a
contract towards the end of the 2014 season. Mr. Tate takes the briefcase filled with money and
Professor Fell’s Mizuno Wave Inspire 9 running shoes that are worth $55.00. You may assume that the
laws of the city of Northfield and the state of Ohio prohibit theft. Professor Fell wants to punish Mr.
Tate as much as possible, and he wants to file a civil lawsuit against Mr. Tate in federal court so that the
court will require him to return the briefcase, the money, and the shoes. Does a federal court have
jurisdiction over this criminal act? Can this case be heard in federal court? Why or why not?
Please be sure to explain your answer in detail. Your answer should contain a statement of the
relevant law and an application of law to facts in addition to an answer to this question.
Essentially, you need to clearly and explicitly explain how you reached your conclusion. Please
do not skip steps in your analysis. Your explanation needs to be an explanation that can easily
be understood by a non-lawyer. (5 Points)
Chapter Three notes that federal jurisdiction is limited to cases listed in the Constitution
and under statutes enacted by Congress. Those include cases between citizens of different
states (“diversity of citizenship issue”) if the amount in controversy exceeds $75,000. That
would presumably apply here as the alleged theft was of $100,000, plaintiff is a resident of
OH, and the defendant is a resident of another state – PA.
Northfield and Ohio may pursue criminal action against Tate. But this does not prevent
Fell’s decision to pursue civil action to get his assets back.
This does appear to be a case of “concurrent jurisdiction”. Although Fell can ask that this
be tried in federal or Ohio courts, federal courts generally only hear certain cases involving
crimes against federal statutes bankruptcy and copyrights and maritime law. However,
“diversity of citizenship” cases are different and often tried in District Court, and plaintiff
state law (Ohio) would be used as the basis for trial and judgment.
Fell will wisely examine the prospects of getting the most favorable remedy in the District
Court versus the state court – and this involves consideration of historical actions by sitting
judges, jury actions, and related.